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Out-Law News 1 min. read

Adidas wins $300 million stripe payout

Adidas has won a $300 million trade mark case against a rival shoe maker over its three stripe logo. The sportswear giant alleged that the rival's two- and four-striped shoes violated its trade mark rights.

Adidas has fought many trade mark battles in Europe and the US over its stripes because many retailers and clothing manufacturers have argued that stripes on clothes are not distinctive enough to be trade marked.

The latest battle was against Collective Brands, which sold shoes under the Payless and Stride Rite brands. It sold shoes with two and four stripe designs, claiming that the difference in the number of stripes made them distinctive from Adidas's shoes.

A nine-person federal jury in Kansas has now ruled that the shoes do violate Adidas's trade marks and has ordered Collective Brands to pay Adidas $305 million.

"The three-stripes are paramount to the Adidas brand, and a very strong and popular brand symbol globally," said an Adidas spokeswoman, according to news agency The Associated Press. "It is very satisfying for the three stripes to be recognised as a strong trademark after the court heard detailed evidence over more than three weeks."

Collective Brands said that it would ask the court to set aside the ruling and that it would take further steps to overturn it if it did not, said AP. A company statement called the ruling "excessive and unjustified".

In a Dutch court battle over similar issues the European Court of Justice (ECJ) came down recently on Adidas's side. Questions in Adidas's case against retailer H&M were referred to the ECJ, which backed Adidas.

H&M had argued in its case that such a generic and non-distinctive sign as three stripes should not be protected as a trade mark.

Last month, though, the ECJ said that courts must take into account whether consumers would be confused by a sign into thinking that an item belonged to a different company. Though stripes as decorative elements must be available to all, it said, a court must bear in mind that this does not restrict the normal rights of a trade mark holder.

"The national court must determine whether the average consumer may be mistaken as to the origin of sports and leisure garments featuring stripe motifs in the same places and with the same characteristics as the stripes motif of adidas, except for the fact that they consist of two rather than three stripes," said an ECJ statement.

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