Supreme Court Holds Covenant Not to Sue Moots Trademark Cancellation Claim

Summary: A trademark owner can avoid a declaratory judgment challenge to the validity of its mark by executing a broadly worded “covenant not to sue.” So held a unanimous Supreme Court in Already, LLC v. Nike, Inc., No. 11-982, 2013 WL 85300, 2013 U.S. LEXIS 602 (Jan. 9, 2013). The Court’s decision provides trademark owners with a potential low-cost alternative to defending an invalidity counterclaim, but presents some risks to trademark owners with respect to future enforcement efforts.