Intellectual Property – End of challenged conduct moots injunction appeal

Where NIKE stopped an advertising campaign after the district court found it infringed on Fleet Feet’s trademarks, NIKE’s cessation of the campaign mooted its appeal of the preliminary injunction.

Background

In 2019, NIKE Inc., NIKE USA Inc. and NIKE Retail Services Inc. launched an advertising campaign with the tagline “Sport Changes Everything.” Fleet Feet Inc. sued NIKE, alleging that the campaign infringed Fleet Feet’s trademarks “Change Everything” and “Running Changes Everything.” It also moved for a preliminary injunction to halt NIKE’s use of the allegedly infringing slogan. The district court granted the motion.

The preliminary injunction order prohibits NIKE from “any use whatsoever of the phrase ‘Sport Changes Everything’ or any other designation confusingly similar to the RUNNING CHANGES EVERYTHING and CHANGE EVERYTHING marks” when advertising or selling its goods and services. The district court set a $1 million injunction bond, which Fleet Feet posted. As required by the injunction, NIKE discontinued the “Sport Changes Everything” campaign two months before its scheduled end.

Analysis

NIKE contends that the district court erred in finding that Fleet Feet would likely succeed on the merits of its trademark infringement case and would likely suffer irreparable injury absent preliminary injunctive relief. But as a threshold matter, the court must consider whether the end of the “Sport Changes Everything” campaign and NIKE’s representations that it didn’t plan to use the term after the campaign render moot NIKE’s appeal of a preliminary injunction designed to interrupt that very campaign.

The end of the 2020 Super Bowl, coupled with NIKE’s representations that it didn’t plan to use the term “Sport Changes Everything” after the campaign, foreclosed any possible relief to NIKE based on the preliminary injunction’s interference with its “Sport Changes Everything” campaign. Undaunted, NIKE insists that two live issues related to the preliminary injunction remain: (1) the “continued restraint on NIKE’s speech” from the order’s prohibition of any designation “confusingly similar” to Fleet Feet’s trademarks and (2) NIKE’s potential recovery on the injunction bond. Neither saves this appeal from being moot.

Addressing first NIKE’s argument that the “confusingly similar” language in the preliminary injunction order continues to present a live controversy, the court thinks that, at best, it presents only a potential controversy, which can’t sustain this appeal. At the outset, the court doubts that the “confusingly similar” language forbids much beyond use of the “Sport Changes Everything” tagline itself. A prohibition on confusingly similar designations is merely a prohibition on trademark infringement, which is by definition the use of a “colorable imitation” of another’s mark that “is likely to cause confusion.”

But even if the court were to assume that the order reaches some category of “potential speech” beyond variations on NIKE’s terminated tagline, NIKE’s argument fails because it hasn’t identified any actual speech threatened by the preliminary injunction. In that regard, NIKE hasn’t engaged in speech barred by the order so far and doesn’t claim that it intends to do so in the future. There simply isn’t any injury for a court to redress.

Next, the court considers NIKE’s contention that the injunction bond is a live issue. Although it agrees that the bond keeps the case as a whole from being moot, it can’t do the same for this appeal. NIKE’s appeal of the injunction became moot after the 2020 Super Bowl. The injunction bond preserved only the question of whether Fleet Feet should compensate NIKE for the enjoined conduct, i.e., the foregone final two months of NIKE’s campaign. The separate issue of the propriety of the preliminary injunction will merge into a final decision by the district court that either finds that Fleet Feet’s claims are meritorious, or that NIKE is entitled to collect on the injunction bond.

Finally, NIKE asks for vacatur of the district court’s preliminary injunction order if the appeal is rendered moot. According to NIKE, leaving the injunction in place would be unjust because NIKE can’t obtain appellate review of the order. Where an appeal of a preliminary injunction order becomes moot but “the case remains alive in the district court, it is [generally] sufficient to dismiss the appeal without directing that the injunction order be vacated.” The court sees no good reason in this case—and NIKE offers none—to depart from that general rule here.

Dismissed and remanded.

Fleet Feet Inc. v. Nike Inc. (Lawyers Weekly No. 001-025-21, 13 pp.) (Albert Diaz, J.) Appeal No. 19-2390. Jan. 26, 2021. From M.D.N.C. (Catherine C. Eagles, J.) Stanley J. Panikowski for Appellants. Corby Anderson for Appellee.