In the current Adidas war on stripes, a Kansas shoe company were fined by a federal jury for trademark violation of the adidas three-stripe design. Adidas AG earlier this week won a $305 million award from a federal jury in Oregon for trademark violation of its three-stripe design by the company that operates the Payless and Stride Rite shoe-store chains. The verdict is unusually high for a trademark case, lawyers say.
"It is very satisfying for the three stripes to be recognized as a strong trademark after the court heard detailed evidence over more than three weeks," an Adidas spokeswoman said in an email. The German company is the world's second-largest sporting-goods maker by sales after Nike Inc.
Collective Brands Inc., Topeka, Kan., which operates Payless and Stride Rite, called the award "excessive and unjustified" and said it "intends to take all necessary steps to overturn it." The company's shares tumbled 15 percent, or $1.85, to $10.46, on the news on Tuesday, and on Wednesday slipped 13 cents, or 1.2%, to $10.33 in 4 p.m. New York Stock Exchange.
A lawyer for Adidas, Charlie Henn, said the company alleged that Payless bought multiple versions of the three-stripe Adidas sneakers, sent them to China to be manufactured with either two or four stripes, and then sold approximately 30 million pairs of the infringing shoes, or about $400 million worth.
The actual damages -- for trademark and trade dress infringement, trademark and trade dress dilution, and unfair and deceptive trade practices -- amounted to about $31 million. With a finding of willfulness, the jury also ordered Payless to disgorge profits, which amounted to about $137 million. The punitive damages mirrored the disgorged profits, bringing total damages to about $305 million.
Mr. Henn said it was possible the award could be reduced, but he said he also thought it was possible it could be increased. Upon a finding of willful infringement, said Mr. Henn, the judge can award the plaintiff attorneys' fees and can also triple the actual damages portion of the verdict.