Trademark Troubles: Just Don't
Let us start with a silly question: have you ever had an idea? Chances are that you have had several “ideas” which, if focused on and developed further, could be protected as intellectual property. The different types of intellectual property are copyright, patents, trade secrets, and trademarks. This post focuses on trademarks and how successfully registering can preserve a path towards growth for your business, free from competitor interference. But what happens when your competitor is a global organization with an estimated annual revenue of $37.4 billion? How does someone just starting out compete with the legal team for a company of that size, or even an established company with an estimated annual revenue of $99.4 million?
In Fleet Feet, Inc. v. NIKE, Inc., the plaintiff, a national retailer of running apparel and equipment with more than 170 locations across the United States, successfully stopped a marketing campaign orchestrated by NIKE, Inc. and its subsidiaries. Although Fleet Feet’s trademarks “Running Changes Everything” and “Change Everything” were not registered until 2020 and 2015, respectively, the district court found that Fleet Feet had been using one of the marks since 2009. The marketing campaign implemented by NIKE “Sport Changes Everything” was found to be “confusingly similar” to Fleet Feet’s marks, and the district court issued a preliminary injunction. The district court’s order enjoined NIKE from using its “Sport Changes Everything” campaign as well as any other “confusingly similar” variations. What does any fat cat do when the court doesn’t rule in their favor?
You guessed it! They appeal. Specifically, NIKE appealed the injunction, arguing that the district court incorrectly found that Fleet Feet was likely to: (1) prevail on its trademark infringement claims, and (2) suffer irreparable harm if the injunction was not granted. First, NIKE argued that the case had become moot based on its voluntary discontinuance of the marketing campaign and statements that it did not intend to use the “Sport Changes Everything” line after the 2020 Superbowl. Therefore, any relief available to NIKE if the injunction order was reversed was no longer available. However, the district court’s order prohibiting NIKE from using any “confusingly similar” marketing campaigns extends to potential future campaigns, which NIKE also argues is in error.
NIKE’s opposition to the district court’s “confusingly similar” language in the injunction is exactly what it appears to be, a feeble attempt to recover on the $1 million injunction bond Fleet Feet was required to secure. The United States Fourth Circuit Court of Appeals astutely deemed it such by pointing out the parallel interpretations of “confusingly similar” and “colorable imitation” as used in 15 U.S.C. § 1114(1)(a). The Court of Appeals reasoned that such language is “a prohibition on trademark infringement” and NIKE had not presented any other marketing phrases subject to the injunction.
Finally, NIKE’s request for vacatur of the preliminary injunction was denied by the Court of Appeals. The Court of Appeals stated that such relief was improper “because a preliminary injunction ‘has no preclusive effect … on the judge’s decision whether to issue a permanent injunction.’” To put it simply, NIKE is not deprived of appellate review of the district court’s decision on the merits, which would in turn support the issuance of a permanent injunction. Therefore, the Court of Appeals dismissed NIKE’s appeal as moot and remanded the case to the district court where a trial on the merits will likely ensue.