In a recent case, the US Court of Appeals for the Fifth Circuit disrupted the calm seas of trademark law. They reversed a district court’s trademark invalidity finding due to lack of subject-matter jurisdiction. This jurisdictional question arose because a covenant not to sue (CNS) issued by the trademark owner successfully deflected any potential future injury that the supposed infringer might suffer. The case in question is Nursery Decals & More, Inc. v. Neat Print, Inc., Case No. 22-10065 (5th Cir. Aug. 1, 2023) and presided over by Haynes, Engelhardt, JJ.; deGravelles, Dist. J., sitting by designation in a per curiam decision.
At the core of this case is the principle of CNS, a common tool in litigation. A CNS is essentially a promise issued by a party that asserts that they will not bring a particular claim against the other party in the future. Its function is to alleviate any concerns about potential legal action in the future, promoting business and legal certainty.
The dispute centered around trademark use, which subsequently brought to light the effects of a CNS issued by a trademark owner. In this case, the use of a CNS effectively sidelined any expected future injuries the alleged infringer might experience. In overruling the district court’s decision, the Appeals Court underscored the power of a CNS and its ability to guide the jurisdictional course of a case.
A tangible takeaway from this case is the importance of carefully considering the use of a CNS in managing present and future litigation risks. It serves as a reminder that yesterday’s problems, if appropriately managed, do not necessarily need to taint today’s CNS. Given its power of jurisdictional direction, a thoughtfully crafted and timely issued CNS can ensure smooth sailing in dealing with potential trademark disputes.
For more detailed legal insights regarding the case, Nursery Decals & More, Inc. v. Neat Print, Inc., and the wider implications for trademark law and practice, follow this link. The analysis offered is provided by McDermott Will & Emery, a law firm renowned for its profound understanding and experience in intellectual property law, among other areas.