Jury Awards Adidas America $304.6M In Trademark Case
 |
Jury Orders Payless To Pay adidas
$304.6M For Trademark Infringement |
A U.S. District Court jury in Portland Monday ordered Payless Shoesource Inc. to pay $304.6M for "infringing on Adidas America Inc.'s three-stripe trademark and shoe styles," according to Brent Hunsberger of the Portland OREGONIAN. The jury, after a 14-day trial and two days of deliberation, awarded adidas AG's U.S. subsidiary $30.6M in actual damages, $137M in punitive damages and $137M in Payless profits. adidas attorney Stephen Feldman said that the jury found in adidas' favor on "all seven claims it was asked to consider, including trademark infringement, trade-dress infringement and unlawful and deceptive trade practices." Feldman added that the jury "found 267 different styles and colors of Payless shoes resembled Adidas' trademarks." Kansas-based Collective Brands Inc. (CB), which operates the Payless chain, called the award "excessive and unjustified." CB in a statement added that it "plans to ask the court to set the verdict aside or 'take all necessary steps to overturn it.'" Trademark attorneys "believe it to be the largest award ever in a trademark-infringement case," and experts said that if the decision stands, it could have "implications for retailers beyond the shoe business." Portland-based attorney and Univ. of Oregon adjunct law professor Michael Ratoza said that the verdict "could have an impact on retailers who sell discount products that resemble well-known items." Ratoza: "Any retailer has to be very cautious about the sources of their products." adidas for the trial paid more than $500,000 over five years to Gerald Ford, an expert who "gauged consumer confusion." Ford conducted 4,246 interviews and "concluded that two- and four-striped shoes probably lead consumers to think they were Adidas-sanctioned products" (Portland OREGONIAN, 5/7). CB Dir of Investor Relations James Grant said the jury's decision was "too outrageous." Grant: "No one thought it could be this big" (K.C. STAR, 5/7). CB's shares yesterday dropped 13% to close at $10.74 (AP, 5/6).
STRIPES EARNING: The WALL STREET JOURNAL's Julia Mengewein reported adidas AG yesterday posted a $261.7M (all figures U.S.) FY Q1 profit, a 32% increase over $198.9M in the year-ago period, due in part to "growth in the adidas and TaylorMade-adidas Golf brands." Revenue for the quarter rose 3.3%, and overall sales for Q1 "rose 10% if currency fluctuations are excluded." adidas Chair & CEO Herbert Hainer in a statement said, "Adidas and TaylorMade-adidas Golf were our growth engines." But Reebok's "first-quarter backlog, which analysts look at to gauge future operational strength, fell a steep 13%." adidas said that this drop was "largely due to strategic initiatives to revamp the brand in the U.S., U.K. and Japan" and said that it "expects backlogs to recover over the course of the year" (WSJ.com, 5/6).
|
