adidas v. Payless: 3 Stripes, You're Out
Why put on athletic shoes and go for a run when simply reading about adidas' latest victory can raise your heart rate?
In a lawsuit claiming that Payless had engaged in unsportsmanlike conduct with respect to adidas' ubiquitous 3 stripes, an Oregon jury awarded the German athletic wear company USD $305 million, reportedly a record for a trademark infringement case. And yes, that's over $100m per stripe. Kansas-based Collective Brands, which owns Payless, intends to challenge the verdict.
The win for adidas comes on the heels of another victory in the European Court of Justice, which recently ruled that a Dutch court could not take into account others' desire to maintain access to a design element as basic as 3 stripes. The decision was based on the already established link in the public mind between adidas and the 3-stripe design, when used as a trademark (as opposed to a general design element).
Of course, the adidas stripes weren't always treated as a trademark. For years, the International Olympic Committee allowed 3-stripe patterns much larger than the usual 20-centimeter limit on athletes' clothing, treating the stripes as simply part of the design. In response to competitors' objections and in recognition of adidas' worldwide trademark registrations, the IOC changed its position prior to the 2006 Winter Games.
Interestingly, the verdict sheet in adidas v. Payless shows that the jury found infringement in the case of 2- and 4-stripe models as well. In fact, among 250+ styles, the jury only disagreed with adidas in one case -- a model that appears to have only 1.5 stripes. Presumably 5 stripes, the longtime territory of K-Swiss, would be off-limits to Payless as well.
But hey, Payless can always base its next collection on lawyers' pinstripes.