By Jason Rantanen
This morning the Supreme Court granted certiorari in Already, LLC dba Yums v. Nike, Inc., No. 11-982, an appeal carrying the potential for profound implications for patent law. The question presented asks:
Whether a federal district court is divested of Article III jurisdiction over a party’s challenge to the validity of a federally registered trademark if the registrant promises not to assert its mark against the party’s then-existing commercial activities.
The Petition focused on a split between the Second and Ninth Circuit, but similar disagreements have simmered in the Federal Circuit. Under controlling Federal Circuit precedent, it has long been the law that a patent holder can divest a federal court of Article III jurisdiction over the defendant's counterclaim for a declaratory judgment of patent invalidity by promising not to sue. See Super Sack Mfg. Corp. v. Chase Packaging Corp., 57 F.3d 1054, 1059-60 (Fed. Cir. 1995). A subsequent dissent by Judge Dyk, however, urged the abandonment of the Super Sack rule. See Benitec Australia, Ltd. v. Nucleonics, Inc., 497 F.3d 1340, 1350-55 (Fed. Cir. 2007) (Dyk, J., dissenting).
Should the Court agree with Petitioners, it thus would very likely spell the end of the so-called Super Sack covenant, making it harder for patent holders to withdraw their patents once placed into litigation.
Notes:
- Prior PatentlyO commentary on this case: http://www.patentlyo.com/patent/2012/04/supreme-court-looks-to-take-trademark-standing-case-following-covenant-not-to-sue.html
- Counsel for the parties is the same as in KSR v. Teleflex, with James Dabney and John Duffy representing the Petitioner and Tom Goldstein representing Respondent Nike.
- Professor Duffy provided me with copies of the parties briefs:
- The Second Circuit opinion: Nike, Inc. v. Already, LLC, 663 F.3d 89 (2nd Cir. 2011)(Lohier, J.)
