A federal court in Pennsylvania has ordered Nike to pay Lontex Corporation millions in attorney’s fees for its “reckless infringement” of the company’s trademark.
Lontex Corporation, a small Pennsylvania business, holds a registered trademark for “Cool Compression,” which is used in its athletic compression apparel. Lontex sued Nike, Inc., for trademark infringement after discovering that Nike used the phrase in its product names and marketing materials. Nike had rebranded a line of its athletic clothing as “Nike Pro” and used the phrase “Cool Compression” in product names on its website and catalogs. Lontex sent a cease-and-desist letter to Nike in 2016, but Nike continued using the phrase for some time.
In March 2022, a United States District Court judge for the Eastern District of Pennsylvania awarded Lontex $142,000 in compensatory damages and $365,000 in punitive damages. The District Court also trebled the compensatory damages to $426,000. After the judge concluded that Nike had been especially contentious, it awarded Lontex nearly $5 million in attorney’s fees that it incurred in litigating an infringement case over its “Cool Compression” trademark. The Court also found that the company’s conduct rose to be “exceptional” under the Lanham Act. Nike appealed the decision, while Lontex cross-appealed the dismissal of its counterfeiting claim and the denial of profit disgorgement.
The debate over attorneys’ fees was remanded to the District Court after a ruling called for clearer justification. The Court found that Nike’s behavior warranted the fees, citing unreasonable delays and a particularly aggressive litigation strategy, which included threats to “kill” Lontex’s business through costly legal battles.
Lontex now has the option to file additional claims for fees incurred during the appeal process, potentially increasing Nike’s financial liability in the case.
Image courtesy Lontex
