Adidas AG Strikes Again

NEW YORK — Adidas AG is prepping to battle Wal-Mart Stores Inc. in the same Portland, Ore., court that last month awarded it $305 million in a trademark infringement suit against Payless ShoeSource.

“Obviously, they won a huge award with the court, so maybe they think they can catch lightening twice,” said Matt Powell, an analyst at SportsOneSource.

Susquehanna Financial Group analyst John Shanley agreed. “There is a better-than-even chance that Adidas will also win its suit against Wal-Mart, just as it had against Payless,” he said. “The venue of the suit, in Portland, gives Adidas a decided advantage. [But I’m] not sure if the size of the potential award will approach what the jury awarded Adidas from the Payless litigation.”

Attorneys for Adidas said last Wednesday there will be a mid-July hearing on summary judgement motions — used in civil cases to promptly dispose of a case without a trial — in the suit against Wal-Mart, which was initially filed in August 2005 over the use of two- and four-striped designs on its sneakers. If there is not a summary judgment award, or another type of pre-trial dismissal later this summer, the suit would likely go to trial in late October.

Adidas’ attorney, Charles Henn, would not disclose the amount of damages Adidas stands to gain if it wins the case, although Harley Lewin, a trademark attorney at Greenberg Traurig LLP, said that Adidas could garner more in damages from Wal-Mart than it did with Payless last month, based on footwear volume.

“I don’t know what the volume at issue is in Wal-Mart’s case, but I’m imagining it’s fairly significant,” said Lewin. (Lewin is doing post-trial defense work on behalf of Payless in its case with Adidas.)

Wal-Mart did not return calls seeking comment by press time, but according to court documents filed over the past month, it has yet to disclose the exact volume amounts of its stripe-design footwear.

Wal-Mart reiterated in documents filed in May that it agreed in 2002 not to use a “confusingly similar imitation” of the Adidas three-stripe mark, but noted that agreement “cannot be read to forbid” Wal-Mart’s sale of four-striped footwear.

According to Adidas, since 1995 it has pursued more than 120 separate patent infringement matters involving footwear, filed more than 35 infringement suits over its three-stripe design and entered into more than 45 agreements with footwear companies over use of the stripe design. Adidas has now sued Wal-Mart three times — and settlements have been reached in cases filed in 1995 and 2002.

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