The US Supreme Court has declined to come to a decision on the Nike v Kasky case, which had been expected to help clarify the free speech rights of companies.
Both sides in the now-celebrated dispute were hoping the court would rule on whether a California state court was right to decide Nike could be prosecuted for making allegedly false public statements in support of its record on supplier factory conditions.
But the Supreme Court decided it would not now judge the issue until the case, brought by environmental campaigner Marc Kasky, has been heard in California. Two of the six justices dissented.
As a result of the Supreme Court decision, uncertainty over the outcome - seen by Nike as a key test of a company's right of reply on social and environmental issues - is likely to continue.
Nike, which has suspended publication of its annual CSR report as a result of the lawsuit, claimed the Supreme Court's stance suggested it was worried about the implications. 'The Supreme Court was clearly troubled by the decision of the California judges and the chilling effect that the decision will have on [free] speech,' the company said.
Jeff Milchen, director of Reclaim Democracy, a US pressure group supporting Kasky, said: 'This allows the case go to trial in the California state court, where Nike's claims will be exposed to scrutiny'.