Already, LLC v. Nike, Inc.

(Slip Opinion) OCTOBER TERM, 2012 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader.

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

ALREADY, LLC, DBA YUMS v. NIKE, INC.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE SECOND CIRCUIT

No. 11–982. Argued November 7, 2012—Decided January 9, 2013

Nike filed this suit, alleging that two of Already’s athletic shoes violat-

ed Nike’s Air Force 1 trademark. Already denied the allegations and

filed a counterclaim challenging the validity of Nike’s Air Force 1

trademark. While the suit was pending, Nike issued a “Covenant

Not to Sue,” promising not to raise any trademark or unfair competi-

tion claims against Already or any affiliated entity based on Al-

ready’s existing footwear designs, or any future Already designs that

constituted a “colorable imitation” of Already’s current products.

Nike then moved to dismiss its claims with prejudice, and to dismiss

Already’s counterclaim without prejudice on the ground that the cov-

enant had extinguished the case or controversy. Already opposed

dismissal of its counterclaim, contending that Nike had not estab-

lished that its covenant had mooted the case. In support, Already

presented an affidavit from its president, stating that Already

planned to introduce new versions of its lines into the market; affida-

vits from three potential investors, asserting that they would not

consider investing in Already until Nike’s trademark was invalidat-

ed; and an affidavit from an Already executive, stating that Nike had

intimidated retailers into refusing to carry Already’s shoes. The Dis-

trict Court dismissed Already’s counterclaim, concluding that there

was no longer a justiciable controversy. The Second Circuit affirmed.

It explained that the covenant was broadly drafted; that the court

could not conceive of a shoe that would infringe Nike’s trademark yet

not fall within the covenant; and that Already had not asserted any

intent to market such a shoe.

Held: This case is moot. Pp. 3–15.

(a) A case becomes moot—and therefore no longer a “Case” or “Con-

troversy” for Article III purposes—“when the issues presented are no

2 ALREADY, LLC v. NIKE, INC.

Syllabus

longer ‘live’ or the parties lack a legally cognizable interest in the

outcome.” Murphy v. Hunt, 455 U. S. 478, 481. A defendant cannot,

however, automatically moot a case simply by ending its unlawful

conduct once sued. City of Mesquite v. Aladdin’s Castle, Inc., 455

U. S. 283, 289. Instead, “a defendant claiming that its voluntary

compliance moots a case bears the formidable burden of showing that

it is absolutely clear the allegedly wrongful behavior could not rea-

sonably be expected to recur.” Friends of the Earth, Inc. v. Laidlaw

Environmental Services (TOC), Inc., 528 U. S. 167, 190. Pp. 3–4.

(b) Nike has the burden to show that it “could not reasonably be

expected” to resume its enforcement efforts against Already. The

voluntary cessation doctrine was not disavowed in Deakins v. Mona-

ghan, 484 U. S. 193. There, the Court employed precisely the analy-

sis the test requires, finding a case moot because the challenged ac-

tion—pursuing a claim in court—could not be resumed in “this or any

subsequent action” and because it was entirely “ ‘speculative’ ” that

any similar claim would arise in the future. Id., at 201, n. 4. Pp. 5–6.

(c) Application of the voluntary cessation doctrine shows that this

case is moot. Pp. 6–14.

(1) The breadth of the covenant suffices to meet the burden im-

posed by the doctrine. The covenant is unconditional and irrevocable.

It prohibits Nike from filing suit or making any claim or demand;

protects both Already and Already’s distributors and customers; and

covers not just current or previous designs, but also colorable imita-

tions. Once Nike demonstrated that the covenant encompasses all of

Already’s allegedly unlawful conduct, it became incumbent on Al-

ready to indicate that it engages in or has sufficiently concrete plans

to engage in activities that would arguably infringe Nike’s trademark

yet not be covered by the covenant. But Already failed to do so in the

courts below or in this Court. The case is thus moot because the chal-

lenged conduct cannot reasonably be expected to recur. Cardinal

Chemical Co. v. Morton Int’l, Inc., 508 U. S. 83, and Altvater v. Free-

man, 319 U. S. 359, distinguished. Pp. 6–9.

(2) Already’s alternative theories of Article III injuries do not

save the case from mootness, because none of those injuries suffices

to support Article III standing in the first place. Already argues that

as long as Nike is free to assert its trademark, investors will hesitate

to invest in Already. But once it is “absolutely clear” that challenged

conduct cannot “reasonably be expected to recur,” Friends of the

Earth, supra, at 190, the fact that some individuals may base deci-

sions on conjectural or hypothetical speculation does not give rise to

the sort of concrete and actual injury necessary to establish Article

III standing, Lujan v. Defenders of Wildlife, 504 U. S. 555, 560. Al-

ready worries about its retailers, but even if a plaintiff may bring an

Cite as: 568 U. S. ____ (2013) 3

Syllabus

invalidity claim based on a reasonable expectation that a trademark

holder will take action against the plaintiff ’s retailers, the covenant

here extends protection to Already’s distributors and customers. Al-

ready also complains that Nike’s decision to sue in the first place has

led Already to fear another suit. But, since Nike has met its burden

to demonstrate that there is no reasonable risk of such a suit, this

concern is unfounded. Already falls back on the sweeping argument

that, as one of Nike’s competitors, it inherently has standing because

no covenant can eradicate the effects of a registered but invalid

trademark. The logical conclusion of this theory seems to be that a

market participant is injured for Article III purposes whenever a

competitor benefits from something allegedly unlawful—e.g., a

trademark or the awarding of a contract—but this Court has never

accepted such a boundless theory of standing.

Already’s policy objection that dismissing this case allows Nike to

bully small innovators does not support adoption of this broad theory.

Granting covenants not to sue may be a risky long-term strategy for a

trademark holder. And while accepting Already’s theory may benefit

the small competitor in this case, it also lowers the gates for larger

companies with more resources, who may challenge the intellectual

property portfolios of more humble rivals simply because they are

competitors in the same market. This would further encourage par-

ties to employ litigation as a weapon against their competitors rather

than as a last resort for settling disputes. Pp. 9–14.

(d) No purpose would be served by remanding the case. Already

has had every opportunity and incentive to submit evidence in the

proceedings below. It has refused, at every stage of the proceedings,

to suggest that it has any plans to design a shoe that violates the Air

Force 1 trademark yet falls outside the covenant. And while the

courts below did not expressly invoke the voluntary cessation stand-

ard, their analysis addressed the same questions this Court address-

es here under that standard. Pp. 14–15.

663 F. 3d 89, affirmed.

ROBERTS, C. J., delivered the opinion for a unanimous Court. KEN-

NEDY,J., filed a concurring opinion, in which THOMAS, ALITO, and SO-

TOMAYOR, JJ., joined.

Cite as: 568 U. S. ____ (2013) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Wash-

ington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

_________________

No. 11–982

_________________

ALREADY, LLC, DBA YUMS, PETITIONER v. NIKE,

INC.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE SECOND CIRCUIT

[January 9, 2013]

CHIEF JUSTICE ROBERTS delivered the opinion of the

Court.

The question is whether a covenant not to enforce a

trademark against a competitor’s existing products and

any future “colorable imitations” moots the competitor’s

action to have the trademark declared invalid.

I

Respondent Nike designs, manufactures, and sells ath-

letic footwear, including a line of shoes known as Air

Force 1s. Petitioner Already also designs and markets

athletic footwear, including shoe lines known as “Sugars”

and “Soulja Boys.” Nike, alleging that the Soulja Boys in-

fringed and diluted the Air Force 1 trademark, demanded

that Already cease and desist its sale of those shoes.

When Already refused, Nike filed suit in federal court

alleging that the Soulja Boys as well as the Sugars in-

fringed and diluted its Air Force 1 trademark. Already

denied these allegations and filed a counterclaim contend-

ing that the Air Force 1 trademark is invalid.

In March 2010, eight months after Nike filed its com-

plaint, and four months after Already counterclaimed,

2 ALREADY, LLC v. NIKE, INC.

Opinion of the Court

Nike issued a “Covenant Not to Sue.” Its preamble stated

that “Already’s actions . . . no longer infringe or dilute

the NIKE Mark at a level sufficient to warrant the substan-

tial time and expense of continued litigation.” App. 96a.

The covenant promised that Nike would not raise against

Already or any affiliated entity any trademark or unfair

competition claim based on any of Already’s existing foot-

wear designs, or any future Already designs that consti-

tuted a “colorable imitation” of Already’s current products.

Id., at 96a–97a.

After issuing this covenant, Nike moved to dismiss its

claims with prejudice, and to dismiss Already’s invalid-

ity counterclaim without prejudice on the ground that the

covenant had extinguished the case or controversy. Al-

ready opposed dismissal of its counterclaim, arguing that

Nike had not established that its voluntary cessation had

mooted the case. In support, Already presented an affi-

davit from its president, stating that Already had plans to

introduce new versions of its shoe lines into the market;

affidavits from three potential investors, asserting that

they would not consider investing in Already until Nike’s

trademark was invalidated; and an affidavit from one of

Already’s executives, stating that Nike had intimidated

retailers into refusing to carry Already’s shoes.

The District Court dismissed Already’s counterclaim,

stating that because Already sought “to invoke the Court’s

declaratory judgment jurisdiction, it bears the burden of

demonstrating that the Court has subject matter jurisdic-

tion over its counterclaim[ ].” Civ. No. 09–6366 (SDNY,

Jan. 20, 2011), App. to Pet. for Cert. 25a. The Court

read the covenant “broad[ly],” concluding that “any of [Al-

ready’s] future products that arguably infringed the Nike

Mark would be ‘colorable imitations’ ” of Already’s current

footwear and therefore protected by the covenant. Id., at

29a, n. 2. Finding no evidence that Already sought to

develop any shoes not covered by the covenant, the Court

Cite as: 568 U. S. ____ (2013) 3

Opinion of the Court

held there was no longer “a substantial controversy . . . of

sufficient immediacy and reality to warrant the issuance

of a declaratory judgment.” Id., at 34a (quoting Med-

Immune, Inc. v. Genentech, Inc., 549 U. S. 118, 127 (2007)

(internal quotation marks omitted)).

The Second Circuit affirmed. It held that in determin-

ing whether a covenant not to sue “eliminates a justiciable

case or controversy,” courts should look to the totality

of the circumstances, including “(1) the language of the

covenant, (2) whether the covenant covers future, as well

as past, activity and products, and (3) evidence of inten-

tion . . . on the part of the party asserting jurisdiction” to

engage in conduct not covered by the covenant. 663 F. 3d

89, 96 (2011) (footnote omitted). Noting that the covenant

covers “both past sales and future sales of both existing

products and colorable imitations,” the Second Circuit

found it hard to conceive of a shoe that would infringe the

Air Force 1 trademark yet not fall within the covenant.

Id., at 97. Given that Already “ha[d] not asserted any

intention to market any such shoe,” the court concluded

that Already could not show any continuing injury, and

that therefore no justiciable controversy remained. Ibid.

We granted certiorari. 567 U. S. ___ (2012).

II

Article III of the Constitution grants the Judicial

Branch authority to adjudicate “Cases” and “Controver-

sies.” In our system of government, courts have “no busi-

ness” deciding legal disputes or expounding on law in the

absence of such a case or controversy. DaimlerChrysler

Corp. v. Cuno, 547 U. S. 332, 341 (2006). That limitation

requires those who invoke the power of a federal court to

demonstrate standing—a “personal injury fairly traceable

to the defendant’s allegedly unlawful conduct and likely to

be redressed by the requested relief.” Allen v. Wright, 468

U. S. 737, 751 (1984). We have repeatedly held that an

4 ALREADY, LLC v. NIKE, INC.

Opinion of the Court

“actual controversy” must exist not only “at the time the

complaint is filed,” but through “all stages” of the litiga-

tion. Alvarez v. Smith, 558 U. S. 87, 92 (2009) (internal

quotation marks omitted); Arizonans for Official English

v. Arizona, 520 U. S. 43, 67 (1997) (“To qualify as a case

fit for federal-court adjudication, ‘an actual controversy

must be extant at all stages of review, not merely at the

time the complaint is filed’” (quoting Preiser v. Newkirk, 422

U. S. 395, 401 (1975))).

A case becomes moot—and therefore no longer a “Case”

or “Controversy” for purposes of Article III—“when the

issues presented are no longer ‘live’ or the parties lack

a legally cognizable interest in the outcome.” Murphy v.

Hunt, 455 U. S. 478, 481 (1982) (per curiam) (some in-

ternal quotation marks omitted). No matter how vehe-

mently the parties continue to dispute the lawfulness of the

conduct that precipitated the lawsuit, the case is moot if

the dispute “is no longer embedded in any actual contro-

versy about the plaintiffs’ particular legal rights.” Alva-

rez, supra, at 93.

We have recognized, however, that a defendant cannot

automatically moot a case simply by ending its unlawful

conduct once sued. City of Mesquite v. Aladdin’s Castle,

Inc., 455 U. S. 283, 289 (1982). Otherwise, a defendant

could engage in unlawful conduct, stop when sued to have

the case declared moot, then pick up where he left off,

repeating this cycle until he achieves all his unlawful

ends. Given this concern, our cases have explained that

“a defendant claiming that its voluntary compliance moots

a case bears the formidable burden of showing that it is

absolutely clear the allegedly wrongful behavior could not

reasonably be expected to recur.” Friends of the Earth,

Inc. v. Laidlaw Environmental Services (TOC), Inc., 528

U. S. 167, 190 (2000).

Cite as: 568 U. S. ____ (2013) 5

Opinion of the Court

III

At the outset of this litigation, both parties had standing

to pursue their competing claims in court. Nike had

standing to sue because Already’s activity was allegedly

infringing its rights under trademark law. Already had

standing to file its counterclaim because Nike was alleg-

edly pressing an invalid trademark to halt Already’s le-

gitimate business activity. See MedImmune, supra, at

126–137 (a genuine threat of enforcement of intellectual prop-

erty rights that inhibits commercial activity may support

standing). But then Nike dismissed its claims with preju-

dice and issued its covenant, calling into question the

existence of any continuing case or controversy.

Under our precedents, it was Nike’s burden to show

that it “could not reasonably be expected” to resume its

enforcement efforts against Already. Friends of the Earth,

supra, at 190. Nike makes a halfhearted effort to avoid

this test. Relying on Deakins v. Monaghan, 484 U. S. 193

(1988), it argues that “when a defendant makes a judicially

enforceable commitment to avoid the conduct that forms

the basis for an Article III controversy, there is no reason

to apply a special rule premised on the defendant’s unfet-

tered ability to ‘return to [its] old ways.’ ” Brief for Re-

spondent 42.

Nike’s reliance on Deakins is misplaced. In Deakins, the

Court did not disavow the voluntary cessation doctrine;

the Court employed precisely the analysis required by that

test. It found the case was moot because the challenged

action—pursuing a claim in court—could not be resumed

in “this or any subsequent action” and because it was

entirely “speculative” that any similar claim would arise

in the future. 484 U. S., at 201, n. 4 (internal quotation

marks omitted). It distinguished that situation from one

in which a defendant is “free to return to his old ways.”

Ibid. (internal quotation marks omitted). That is the

question the voluntary cessation doctrine poses: Could the

6 ALREADY, LLC v. NIKE, INC.

Opinion of the Court

allegedly wrongful behavior reasonably be expected to re-

cur? Nike cannot avoid its “formidable burden” by as-

suming the answer to that question. Friends of the Earth,

supra, at 190.

IV

A

Having determined that the voluntary cessation doc-

trine applies, we begin our analysis with the terms of the

covenant:

“[Nike] unconditionally and irrevocably covenants to

refrain from making any claim(s) or demand(s) . . .

against Already or any of its . . . related business enti-

ties . . . [including] distributors . . . and employees of

such entities and all customers . . . on account of any

possible cause of action based on or involving trade-

mark infringement, unfair competition, or dilution,

under state or federal law . . . relating to the NIKE

Mark based on the appearance of any of Already’s cur-

rent and/or previous footwear product designs, and any

colorable imitations thereof, regardless of whether

that footwear is produced . . . or otherwise used in

commerce before or after the Effective Date of this

Covenant.” App. 96a–97a (emphasis added).

The breadth of this covenant suffices to meet the burden

imposed by the voluntary cessation test. The covenant is

unconditional and irrevocable. Beyond simply prohibiting

Nike from filing suit, it prohibits Nike from making any

claim or any demand. It reaches beyond Already to pro-

tect Already’s distributors and customers. And it covers

not just current or previous designs, but any colorable

imitations.

In addition, Nike originally argued that the Sugars and

Soulja Boys infringed its trademark; in other words, Nike

believed those shoes were “colorable imitations” of the Air

Cite as: 568 U. S. ____ (2013) 7

Opinion of the Court

Force 1s. See Trademark Act of 1946 (Lanham Act), §32,

60 Stat. 437, as amended, 15 U. S. C. §1114. Nike’s cov-

enant now allows Already to produce all of its existing

footwear designs—including the Sugar and Soulja Boy—

and any “colorable imitation” of those designs. We agree

with the Court of Appeals that “it is hard to imagine a

scenario that would potentially infringe [Nike’s trade-

mark] and yet not fall under the Covenant.”* 663 F. 3d, at

97. Nike, having taken the position in court that there

is no prospect of such a shoe, would be hard pressed to as-

sert the contrary down the road. See New Hampshire v.

Maine, 532 U. S. 742, 749 (2001) (“ ‘[W]here a party as-

sumes a certain position in a legal proceeding, and suc-

ceeds in maintaining that position, he may not thereafter,

simply because his interests have changed, assume a

contrary position, especially if it be to the prejudice of the

party who has acquiesced in the position formerly taken

by him’ ” (quoting Davis v. Wakelee, 156 U. S. 680, 689

(1895))). If such a shoe exists, the parties have not pointed

to it, there is no evidence that Already has dreamt of it,

and we cannot conceive of it. It sits, as far as we can tell,

on a shelf between Dorothy’s ruby slippers and Perseus’s

winged sandals.

Given Nike’s demonstration that the covenant encom-

passes all of its allegedly unlawful conduct, it was incum-

——————

* Nike has “acknowledged that if [Already] were to manufacture an

exact copy of the Air Force 1 shoe . . . Nike could claim that the Cov-

enant permits an infringement suit on the ground that a counterfeit

differs from a colorable imitation under the Lanham Act.” 663 F. 3d, at

97, n. 5. Already, however, has never asserted any intent to make

counterfeit Air Force 1s. Ibid. Moreover, because a counterfeit would

presumably include Nike’s swoosh, an independently registered trade-

mark not at issue here, invalidating the Air Force 1 trademark may

not be sufficient to allow Already to proceed to make counterfeits. See

15 U. S. C. §1127 (defining a counterfeit as a “spurious mark which is

identical with, or substantially indistinguishable from, a registered

mark”).

8 ALREADY, LLC v. NIKE, INC.

Opinion of the Court

bent on Already to indicate that it engages in or has suffi-

ciently concrete plans to engage in activities not covered

by the covenant. After all, information about Already’s

business activities and plans is uniquely within its posses-

sion. The case is moot if the court, considering the cove-

nant’s language and the plaintiff ’s anticipated future

activities, is satisfied that it is “absolutely clear” that the

allegedly unlawful activity cannot reasonably be expected

to recur.

But when given the opportunity before the District

Court, Already did not assert any intent to design or

market a shoe that would expose it to any prospect of in-

fringement liability. See App. to Pet. for Cert. 31a (find-

ing that there was “no indication” of any such intent);

663 F. 3d, at 97, n. 5 (noting the “absence of record evi-

dence that [Already] intends to make any arguably in-

fringing shoe that is not unambiguously covered by the

Covenant”). The only affidavit it submitted to the District

Court on that question was from its president, saying little

more than that Already currently has plans to introduce

new shoe lines and make modifications to existing shoe

lines. It never stated that these shoes would arguably

infringe Nike’s trademark yet fall outside the scope of the

covenant. Nor did it do so on appeal to the Second Circuit.

And again, it failed to do so here, even when counsel for

Already was asked at oral argument whether his client

had any intention to design or market a shoe that would

even arguably fall outside the covenant. Tr. of Oral Arg.

6–8. Given the covenant’s broad language, and given that

Already has asserted no concrete plans to engage in con-

duct not covered by the covenant, we can conclude the case

is moot because the challenged conduct cannot reasonably

be expected to recur.

The authorities on which Already relies are not on point.

In Cardinal Chemical Co. v. Morton Int’l, Inc., we affirmed

the unremarkable proposition that a court’s “decision to

Cite as: 568 U. S. ____ (2013) 9

Opinion of the Court

rely on one of two possible alternative grounds (nonin-

fringement rather than invalidity) did not strip it of power

to decide the second question, particularly when its decree

was subject to review by this Court.” 508 U. S. 83, 98

(1993). In essence, when a court has jurisdiction to review

a case, and decides the issue on two independent grounds,

the first half of its opinion does not moot the second half,

or vice versa. Here the issue is whether the District Court

had jurisdiction to consider the claim in the first place.

This case is also unlike Altvater v. Freeman, 319 U. S.

359 (1943). There, patent holders brought suit against

licensees for specific performance of a license. The licen-

sees counterclaimed, seeking a declaratory judgment that

the patents were invalid. The Court of Appeals, after

finding that the license was no longer in force and the

devices at issue did not infringe, dismissed the licensees’

counterclaim as moot. We reversed, finding the contro-

versy still live because the licensees continued to “manu-

factur[e] and sell[ ] additional articles claimed to fall under

the patents,” and the patent holders continued to “de-

mand[ ] . . . royalties” for those products. Id., at 364–365.

Here of course the whole point is that Already is free to

sell its shoes without any fear of a trademark claim.

B

Already argues, however, that there are alternative

theories of Article III injuries that save the case from

mootness. First, it argues that so long as Nike remains

free to assert its trademark, investors will be apprehen-

sive about investing in Already. Second, it argues that

given Nike’s decision to sue in the first place, Nike’s

trademarks will now hang over Already’s operations like a

Damoclean sword. Finally, and relatedly, Already argues

that, as one of Nike’s competitors, it inherently has stand-

ing to challenge Nike’s intellectual property.

The problem for Already is that none of these injuries

10 ALREADY, LLC v. NIKE, INC.

Opinion of the Court

suffices to support Article III standing. Although the

voluntary cessation standard requires the defendant to

show that the challenged behavior cannot reasonably be

expected to recur, we have never held that the doctrine—

by imposing this burden on the defendant—allows the

plaintiff to rely on theories of Article III injury that would

fail to establish standing in the first place.

We begin with Already’s argument that Nike’s trade-

mark registration “gives false color to state and federal

trademark claims which expose [Already’s] business to

substantial and unpredictable risks,” deterring investors.

Brief for Petitioner 31. To demonstrate this, Already

presented affidavits from potential investors stating that

Nike’s lawsuit dissuaded them from investing in Already

or prompted them to withdraw prior investments, and

that they would “consider” investing in Already only if

Nike’s trademark were struck down. App. to Pet. for Cert.

33a. Already argues that like the plaintiffs in Village

of Euclid v. Ambler Realty Co., 272 U. S. 365 (1926)—

who had standing to challenge an ordinance because it re-

duced their property value—Already should have standing to

challenge the trademark because its mere existence ham-

pers its ability to attract capital.

But once it is “absolutely clear” that challenged conduct

cannot “reasonably be expected to recur,” Friends of the

Earth, 528 U. S., at 190, the fact that some individuals

may base decisions on “conjectural or hypothetical” specu-

lation does not give rise to the sort of “concrete” and “ac-

tual” injury necessary to establish Article III standing,

Lujan v. Defenders of Wildlife, 504 U. S. 555, 560 (1992)

(internal quotation marks omitted). In Euclid, we rea-

soned that, assuming the merits of plaintiff ’s claim, “the

ordinance, in effect, constitutes a present invasion of

[plaintiff ’s] property rights.” 272 U. S., at 386. Here

there is no such present invasion; in fact there is a cove-

nant promising no invasion. In addition, unlike the plain-

Cite as: 568 U. S. ____ (2013) 11

Opinion of the Court

tiffs in Euclid, Already does not claim that Nike’s Air

Force 1 infringes any of its property rights.

Already has also pointed to an affidavit from a vice

president stating that Nike has “suggested” to Already’s

retailers that they refrain from carrying Already’s shoes,

lest “Nike . . . cancel its account or take other actions

against the retailer, e.g., delay shipment of the retailer’s

Nike order or ‘lose’ the retailer’s Nike order.” App. 177a.

Even if a plaintiff may bring an invalidity claim based

on a reasonable expectation that a trademark holder will

take action against the plaintiff ’s retailers, the covenant

here extends protection to Already’s distributors and

customers. And even if Nike were engaging in harass-

ment or unfair trade practices, Already has not explained

how invalidating Nike’s trademark would do anything to

stop it.

Already also complains that it can no longer “just blithely

go about its shoe business as if there were no risk of

being sued again.” Reply Brief 14. As counsel told us at

oral argument: “once bitten, twice shy.” Tr. of Oral Arg. 8.

But we have never held that a plaintiff has standing to

pursue declaratory relief merely on the basis of being

“once bitten.” Quite the opposite. See, e.g., Los Angeles v.

Lyons, 461 U. S. 95, 109 (1983) (holding there is no justici-

able controversy where plaintiff had once been subjected

to a chokehold). Given our conclusion that Nike has met

its burden of demonstrating there is no reasonable risk

that Already will be sued again, there is no reason for

Already to be so shy. It is the only one of Nike’s competi-

tors with a judicially enforceable covenant protecting it

from litigation relating to the Air Force 1 trademark.

Insofar as the injury is a threat of Air Force 1 trademark

litigation, Already is Nike’s least injured competitor.

Already falls back on a sweeping argument: In the

context of registered trademarks, “[n]o covenant, no mat-

ter how broad, can eradicate the effects” of a registered

12 ALREADY, LLC v. NIKE, INC.

Opinion of the Court

but invalid trademark. Brief for Petitioner 33–34. Ac-

cording to Already, allowing Nike to unilaterally moot the

case “subverts” the important role federal courts play in

the administration of federal patent and trademark law.

Id., at 40. It allows companies like Nike to register and

brandish invalid trademarks to intimidate smaller com-

petitors, avoiding judicial review by issuing covenants in

the rare case where the little guy fights back. Already and

its amici thus contend that Already, “[a]s a company

engaged in the business of designing and marketing ath-

letic shoes,” has standing to challenge Nike’s trademark.

See id., at 21; see also Brief for Intellectual Property Pro-

fessors as Amici Curiae 3 (suggesting that standing ex-

tends to all “participants in that field”); Brief for Public

Patent Foundation as Amici Curiae 12 (“[T]he public has

standing to challenge the validity of any issued patent or

registered trademark in court”).

Under this approach, Nike need not even have threat-

ened to sue first. Already, even with no plans to make

anything resembling the Air Force 1, could sue to invali-

date the trademark simply because Already and Nike both

compete in the athletic footwear market. Taken to its

logical conclusion, the theory seems to be that a market

participant is injured for Article III purposes whenever a

competitor benefits from something allegedly unlawful—

whether a trademark, the awarding of a contract, a landlord-

tenant arrangement, or so on. We have never accepted

such a boundless theory of standing. The cases Already

cites for this remarkable proposition stand for no such

thing. In each of those cases, standing was based on

an injury more particularized and more concrete than

the mere assertion that something unlawful benefited the

plaintiff ’s competitor. Northeastern Fla. Chapter, Associ-

ated Gen. Contractors of America v. Jacksonville, 508 U. S.

656 (1993); Super Tire Engineering Co. v. McCorkle, 416

U. S. 115 (1974).

Cite as: 568 U. S. ____ (2013) 13

Opinion of the Court

Already’s arguments boil down to a basic policy objec-

tion that dismissing this case allows Nike to bully small

innovators lawfully operating in the public domain. This

concern cannot compel us to adopt Already’s broad theory

of standing.

First of all, granting covenants not to sue may be a

risky long-term strategy for a trademark holder. See, e.g.,

3 J. McCarthy, Trademarks & Unfair Competition

§18:48, p. 18–112 (4th ed. 2012) (“[U]ncontrolled and ‘naked’

licensing can result in such a loss of significance of a

trademark that a federal registration should be can-

celled”); Sun Banks of Fla., Inc. v. Sun Fed. Sav. & Loan

Assn., 651 F. 2d 311, 316 (CA5 1981) (finding that “exten-

sive third-party use of the [mark was] impressive evidence

that there would be no likelihood of confusion”). In addi-

tion, the Lanham Act provides some check on abusive

litigation practices by providing for an award of attorney’s

fees in “exceptional cases.” 15 U. S. C. §1117(a); cf., e.g.,

Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Founda-

tion, Inc., 484 U. S. 49, 67, n. 6 (1987) (explaining that an

award of litigation costs can protect “from the suddenly

repentant defendant”).

Accepting Already’s theory may benefit the small com-

petitor in this case. But lowering the gates for one party

lowers the gates for all. As a result, larger companies with

more resources will have standing to challenge the intel-

lectual property portfolios of their more humble rivals—

not because they are threatened by any particular patent

or trademark, but simply because they are competitors in

the same market. This would further encourage parties to

employ litigation as a weapon against their competitors

rather than as a last resort for settling disputes.

Already’s only legally cognizable injury—the fact that

Nike took steps to enforce its trademark—is now gone

and, given the breadth of the covenant, cannot reasonably

be expected to recur. There being no other basis on which

14 ALREADY, LLC v. NIKE, INC.

Opinion of the Court

to find a live controversy, the case is clearly moot.

V

The Solicitor General asks us to “remand the case for

further proceedings in which the parties can develop the

record on both the scope of the covenant and petitioner’s

business activities, and the courts below can apply the

proper standard to the record.” Brief for United States as

Amicus Curiae 28.

Such a remand would serve no purpose. The scope of

the covenant is clear. Already’s argument is not that the

covenant could be drafted more broadly, but instead that

no covenant would ever do. See Tr. of Oral Arg. 12–13.

As for business activities, it is plain that Already has

said all it has to say. The District Court held a hearing

on whether the case was mooted by the covenant. There,

and at every stage of the proceedings thereafter, Already

steadfastly refused to suggest that it has any plans to

create any arguably infringing shoe that does not unam-

biguously fall within the scope of the covenant—this de-

spite every incentive, opportunity, and invitation to do so.

As noted, the District Court expressly found “no indica-

tion” that Already had any such plans, App. to Pet. for

Cert. 31a, and Already never challenged this finding. It

did not challenge that finding on appeal to the Second

Circuit, even though its significance was clear. The Court

of Appeals expressly found that Already “has not asserted

any intention to market any such shoe.” 663 F. 3d, at 97.

Already declined to challenge these conclusions before us,

despite questions from the bench addressing that particu-

lar issue. Tr. of Oral Arg. 7–8.

The courts below did not expressly invoke the voluntary

cessation standard, as articulated in our cases. But the

analysis in their opinions addressed the same questions

we have addressed today under that standard. In deter-

mining the case was moot, they relied, as we have, on the

Cite as: 568 U. S. ____ (2013) 15

Opinion of the Court

breadth of the covenant and the absence of any indication

that Already would produce an infringing shoe. The Dis-

trict Court explained that “[w]hether a covenant not to sue

will divest the trial court of jurisdiction depends on what

is covered by the covenant.” App. to Pet. for Cert. 29a

(internal quotation marks omitted). It read the covenant

“broadly,” id., at 34a, and found “no indication that any of

[Already’s] forthcoming models would extend beyond this

broad language,” id., at 31a. It even concluded that from

Already’s perspective, there was “little difference” between

invalidating the trademark and the scope of protection al-

ready afforded by the covenant. Id., at 34a.

Likewise, the Court of Appeals asked “whether the

covenant covers future, as well as past, activity and prod-

ucts,” and inquired into “evidence of intention or lack of

intention, on the part of the party asserting jurisdiction,

to engage in new activity or to develop new potentially

infringing products that arguably are not covered by the

covenant.” 663 F. 3d, at 96. It concluded that “[t]he

breadth of the Covenant renders the threat of litigation

remote or nonexistent” because it could not envision a

shoe that would be within Nike’s trademark yet not pro-

tected by the covenant, noting that Already “has not as-

serted any intention to market any such shoe.” Id., at 97.

Under such circumstances, a remand would serve no

purpose. Cf., e.g., Global-Tech Appliances, Inc. v. SEB

S. A., 563 U. S. ___, ___ (2011) (slip op., at 13–16) (announc-

ing new standard and directly applying standard to affirm

the jury verdict); Thornburg v. Gingles, 478 U. S. 30 (1986)

(announcing and applying new standard). The uncon-

tested findings made by the District Court, and confirmed

by the Second Circuit, make it “absolutely clear” this case

is moot.

The judgment of the Court of Appeals is affirmed.

It is so ordered.

Cite as: 568 U. S. ____ (2013) 1

KENNEDY, J., concurring

SUPREME COURT OF THE UNITED STATES

_________________

No. 11–982

_________________

ALREADY, LLC, DBA YUMS, PETITIONER v. NIKE,

INC.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE SECOND CIRCUIT

[January 9, 2013]

JUSTICE KENNEDY, with whom JUSTICE THOMAS,

JUSTICE ALITO, and JUSTICE SOTOMAYOR join, concurring.

As the Court now holds and as the precedents instruct,

when respondent Nike invoked the covenant not to sue to

show the case is moot, it had the burden to establish that

proposition. The burden was not on Already to show

that a justiciable controversy remains. Under the volun-

tary cessation doctrine, Nike bears the “formidable burden

of showing that it is absolutely clear the allegedly wrong-

ful behavior could not reasonably be expected to recur.”

Friends of the Earth, Inc. v. Laidlaw Environmental Ser-

vices (TOC), Inc., 528 U. S. 167, 190 (2000). In the cir-

cumstances here, then, Nike must demonstrate that the

covenant not to sue is of sufficient breadth and force that

Already can have no reasonable anticipation of a future

trademark infringement claim from Nike.

Both the District Court and the Court of Appeals issued

their rulings on the erroneous premise that it was for

Already to make the relevant showing. When a court has

imposed the burden to establish a certain proposition on

the wrong party, remand from a reviewing court is often

appropriate to determine whether the outcome would have

been different had the proper rule been applied. Here,

however, the Court concludes the case must be deemed

moot in all events, based on the terms and scope of the

2 ALREADY, LLC v. NIKE, INC.

KENNEDY, J., concurring

covenant and on Already’s seeming insistence that no

matter how it might be worded, a covenant drawn by the

trademark holder cannot moot the case. Brief for Peti-

tioner 33–34; Tr. of Oral Arg. 10–13. For reasons the

Court states, this goes too far. Already appears also to dis-

claim any need to determine whether there is a real like-

lihood it will produce a new product that, first, is not a

colorable imitation of its existing product line, and, sec-

ond, might be thought to infringe Nike’s trademark.

This brief, separate concurrence is written to underscore

that covenants like the one Nike filed here ought not to

be taken as an automatic means for the party who first

charged a competitor with trademark infringement sud-

denly to abandon the suit without incurring the risk of

an ensuing adverse adjudication. Courts should be well

aware that charges of trademark infringement can be

disruptive to the good business relations between the

manufacturer alleged to have been an infringer and its dis-

tributors, retailers, and investors. The mere pendency of

litigation can mean that other actors in the marketplace

may be reluctant to have future dealings with the alleged

infringer. Nike appears to have been well aware of that

dynamic in this case. In referring to Already it stated at

one point: “[O]ver the past eight months, Nike has cleared

out the worst offending infringers. Now Already remains

as one of the last few companies that was identified on

that top ten list of infringers.” App. 114a.

Any demonstrated reluctance by investors, distributors,

and retailers to maintain good relations with the alleged

infringer might, in an appropriate case, be an indication

that the market itself anticipates that a new line of prod-

ucts could be outside the covenant not to sue yet still

within a zone of alleged infringement. And, as noted at

the outset, it is the trademark holder who has the burden

to show that this is not the case. It is not the burden of

the alleged infringer to prove that the covenant not to sue

Cite as: 568 U. S. ____ (2013) 3

KENNEDY, J., concurring

is inadequate to protect its current and future products

from a trademark enforcement action.

In later cases careful consideration must be given to the

consequences of using a covenant not to sue as the basis

for a motion to dismiss as moot. If the holder of an alleged

trademark can commence suit against a competitor; in

midcourse file a covenant not to sue; and then require

the competitor and its business network to engage in costly,

satellite proceedings to demonstrate that future produc-

tion or sales might still be compromised, it would seem

that the trademark holder’s burden to show the case is

moot may fall well short of being formidable. The very

suit the trademark holder initiated and later seeks to de-

clare moot may still cause disruption and costs to the

competition. The formidable burden to show the case is

moot ought to require the trademark holder, at the outset,

to make a substantial showing that the business of the

competitor and its supply network will not be disrupted or

weakened by satellite litigation over mootness or by any

threat latent in the terms of the covenant itself. It would

be most unfair to allow the party who commences the suit

to use its delivery of a covenant not to sue as an op-

portunity to force a competitor to expose its future business

plans or to otherwise disadvantage the competitor and its

business network, all in aid of deeming moot a suit the

trademark holder itself chose to initiate.

There are relatively few cases that have discussed the

meaning and effect of covenants not to sue in the context

of ongoing litigation. See, e.g., Revolution Eyewear, Inc. v.

Aspex Eyewear, Inc., 556 F. 3d 1294 (CA Fed. 2009); Car-

aco Pharmaceutical Labs., Ltd. v. Forest Labs., Inc., 527

F. 3d 1278 (CA Fed. 2008). Courts should proceed with

caution before ruling that they can be used to terminate

litigation. An insistence on the proper allocation of the

formidable burden on the party asserting mootness is

one way to ensure that covenants are not automatic mech-

4 ALREADY, LLC v. NIKE, INC.

KENNEDY, J., concurring

anisms for trademark holders to use courts to intimi-

date competitors without, at the same time, assuming

the risk that their trademark will be found invalid and

unenforceable.

While there still may be some doubts that Nike’s show-

ing below would suffice in other circumstances, here Al-

ready’s litigation stance does seem to have made further

proceedings on the mootness issue unnecessary. In addi-

tion, as the Court notes, in any future trademark proceed-

ing Nike will be bound by the lower courts’ broad reading

of this particular covenant, thus barring suit against

Already for any shoe that is not an exact copy or counter-

feit version of the Air Force 1 shoe. See ante, at 7, and n.

(citing New Hampshire v. Maine, 532 U. S. 742, 749

(2001)).

With these observations, I join the opinion and judg-

ment of the Court.