The Kmart division of Sears Holding may have had second thoughts about going to trial in its fight with adidas AG over trademark infringement charges stemming from the sale of multi-striped footwear. Last week adidas received a $304.6 million award when a Portland, OR jury ruled in its favor in a case against Collective Brands Inc., parent to Payless ShoeSource.
The nine-person jury deliberated two days before awarding adidas America U.S. subsidiary $30.6 million in actual damages, $137 million in punitive damages and $137 million in Payless profits, according to a transcript of the proceeding. According to Kilpatrick Stockton, the law firm representing adidas in the case, the award was the largest ever by a jury in a trademark case, with the previous largest award less than one-half the size. Payless issued a release declaring the award “excessive and unjustified.”
Two days later adidas reached a settlement in a suit against Kmart that was set to go to trial in July.
The Payless verdict stems from a 2001 lawsuit in which adidas sued Payless Shoes, now called Collective Brands Inc., over its trademark three-stripes logo. The stripes in the footwear for sale by Payless bore “confusingly similar imitations” of adidas three-stripe trademark, the original filing stated. Of the nearly 270 models cited in the case, the jury found that only one did not infringe on adidas three stripe mark.
Collective Brands will ask the court to set aside the verdict. If that request is not granted, the company said it in a statement it “intends to take all necessary steps to overturn it.”
Next in the wings for adidas is a Wal-Mart suit that is set for trial in October, and the worlds largest retailer maintains it will go forward in that action.
>>> K-Swiss has its own suit pending against Payless in a similar action. Will they settle now or push harder?
