Another day, another 9-digit punishment for the loser of an intellectual property lawsuit. Adidas told a jury that not only do they own their own three stripes brand, but anyone who makes shoes with multiple parallel stripes is guilty of trademark infringement.
Last week, adidas won a mammoth $305 million verdict that the loser, the parent company of Payless Shoes, is now begging to get out of. In court papers, Payless lawyers say that adidas' expert fed the jury bogus numbers, telling them that the illegally striped shoes accounted for 1.7 percent of Payless sales revenues but for more than 21 percent of profits over nine years—that would be triple the profit margin Payless earned on all other products.
How do companies win cases like this? Surveys that try to establish consumer confusion. But even if consumers were confused, what were they confused about? Unless the shoes actually had fake "adidas" tags, it's hard for me to believe anyone was confused about the source of the product. And that's what trademarks are supposed to do—make sure consumers have reliable information about the source of a product or service.
Collective Brands points out that none of the survey data proves that adidas lost even a single cent. Not only that, the massive verdict adds up to more than 15 times the profits that Collective Brands made on all the "infringing" shoes.
The adidas "we-own-stripes" litigation campaign isn't limited to shoes; the German company has also sued companies like Nike, Ralph Lauren, and Abercrombie & Fitch, who have all dared to use stripes in their clothing.
Citizens, you've been warned! If you want to use parallel stripes, call Adidas' trademark lawyers first.