01-1897, 01-2039 Chattanoga Mfg. Inc. v. Nike Inc.

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“Chattanoga contends that Nike’s Michael Jordan-endorsed products progressively encroached into the women’s apparel market, culminating with the establishment of the Jordan Brands Division in 1997, and thus, any delay in bringing suit before 1997 should be excused. While we agree with Chattanoga that ‘[t]he doctrine of progressive encroachment is relevant in assessing whether laches applies to bar a trademark claim,’ id., we conclude that the district court correctly found it inapplicable here. Chattanoga presents no evidence that over time Nike has directed its Michael Jordan-endorsed products’ marketing or manufacturing efforts to compete more directly with Chattanoga’s women’s apparel, and therefore, there is no progressive encroachment at this time.

“Chattanoga next contends that its delay was reasonable because ‘taking enforcement action at th[at] time would not have been successful.’ However, Chattanoga had a provable claim against Nike in 1985 or 1990 given, among other things, the similarity between Chattanoga’s JORDAN mark and Nike’s Jordan marks and the strength of Nike’s marks. Chattanoga should have known they had a provable claim for infringement as early as 1985 and no later than 1990, and therefore, we agree with the district court that any delay by Chattanoga was inexcusable.

“For over 15 years, Nike has spent millions of dollars annually promoting its Michael Jordan-endorsed products and has acquired a position as a market leader. Had Chattanoga challenged Nike’s use of the term Jordan in a timely manner and prevailed, Nike could have promoted its products in a number of different ways.

Accordingly, given the length of the unreasonable delay by Chattanoga and the vast amount of money spent by Nike, we conclude that the district court did not err in concluding that Nike was prejudiced by this delay.”

Affirmed as modified.

Appeals from the United States District Court for the Northern District of Illinois, Castillo, J., Kanne, J.