In 1982, Nike began selling the Air Force 1 with its signature “swoosh” design. Almost 30 years later, it sued a small sneaker maker in New York federal district court for trademark infringement. During the litigation, Nike promised not to sue for old designs, mostly because its competitor’s shoes were no longer being widely sold and litigation costs had escalated. It was too late. The scrappy newcomer already had counterclaimed, challenging the validity of Nike’s trademark registration. A battle over the extent of that promise, under the guise of procedure, ensues.
A decade ago, the case might have been an obscure dispute involving a less-than-urgent constitutional question. But last month, the Supreme Court heard oral arguments in a suit that could change the way trademark and possibly patent registration is practiced in the fast-moving, entrepreneur-flooded digital economy.
The case is remarkable for the court’s increased willingness to intercede in questions with far-reaching effects on not only innovation but also big business. After all, it is one of four such disputes to be resolved this term. These matters will take up 8 percent of oral arguments, compared to 6 percent and 5 percent in 2010 and 2011 and just 2 percent 20 years ago, reports SCOTUSblog. The relatively high number of cases underscores the court’s robust entry into copyright, trademark and patent law that was created before the digital era.
The court’s timing is no coincidence. This area of law increasingly is a bulwark for companies who are under competitive siege in an economy that has fewer regulated monopolies, places a bigger value on information, boasts cheaper raw materials and has a lower bar for starting a new business. When an entity can be disrupted with a few clicks, it is significant how intellectual property disputes are resolved and whether holders of certain protections have unfair competitive advantages. The court is well aware that the way these disputes play out affects which ideas make it into the marketplace.
Take the sneaker case. During oral arguments, the bench was not terribly sympathetic to the plight of Nike’s adversary, Already. Justices Anthony Kennedy, Stephen Breyer and John Roberts seemed wary of a company seeking to squelch trademark protection with no evidence of specific plans in place for a new shoe, even if the mark chills business relationships with investors or retailers.