The US Court of Appeals for the Fourth Circuit dismissed a preliminary injunction as moot where the enjoined party had discontinued the use complained of and had no future plan to restart it. Fleet Feet, Inc. v. Nike, Inc., Case No. 19-2390 (4th Cir. Jan. 26, 2021) (Diaz, J.) The Court denied the enjoined party’s request that it vacate the district court’s order granting the preliminary injunction despite mootness due to an ongoing litigation.
Fleet Feet is a retailer selling products related to running, including Nike merchandise. It is also a Nike competitor since Nike sells its own products. Fleet Feet obtained two trademark registrations, having already used both for years: “Running Changes Everything” in 2020, and “Change Everything” in 2015. In July 2019, Nike launched an advertising campaign with the tagline “Sport Changes Everything” scheduled to end at the February 2020 Super Bowl. Fleet Feet sued Nike for trademark infringement. The district court granted a preliminary injunction against Nike and set a $1 million injunction bond. The preliminary injunction order prohibited Nike from any use of the phrase “Sport Changes Everything” or any other designation confusingly similar to the Fleet Feet’s marks when advertising or selling goods and services. Nike discontinued its campaign two months before the scheduled end and appealed the preliminary injunction order.
Nike argued that the district court erred in its preliminary injunction factor analyses. But on appeal, the Fourth Circuit decided as a threshold matter that the end of Nike’s “Sport Changes Everything” campaign and its representation that there were no plans to use the term after the campaign rendered Nike’s appeal of the preliminary injunction “designed to interrupt that very campaign” moot. A case becomes “moot” when the “issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome.” The Court found that Nike’s appeal of the preliminary injunction was nonjusticiable since there had been an event during the pendency of the appeal that made it impossible to grant effective relief to a prevailing party. Because of the conclusion of the 2020 Super Bowl and Nike’s representations that it did not plan to use the term afterwards, there was no possible relief to Nike based on the preliminary injunction’s interference with the campaign.
The Fourth Circuit disagreed with Nike that two issues remained live. First, Nike argued that the continued restraint on Nike’s speech due to the order’s prohibition of any confusingly similar designation to Fleet Feet continued to be a live issue. The Court explained that this was only a potential controversy, not a live controversy. Because Nike had not engaged in the speech barred by the order, had represented that it did not intend to do so in the future, and had not introduced any new slogans confusingly similar to Fleet Feet’s marks, no actual speech was threatened by the preliminary injunction.
Second, Nike argued that the potential recovery on the injunction bond was a live issue. Referring to the Supreme Court case Univ. of Tex. v. Camenisch, the Fourth Circuit explained that as a general rule, “when the injunctive aspects of a case become moot on appeal of a preliminary injunction, any issue preserved by an injunction bond can’t be resolved on appeal but must instead be resolved in a trial on the merits.” The injunction bond preserved only the question of whether Fleet Feet should compensate Nike for the foregone final two months of Nike’s campaign, the enjoined conduct. The district court through its final decision will find either that Fleet Feet’s claims are meritorious or that Nike is entitled to collect on the injunction bond.