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Trademark Infringement Verdict ? Over $300 Million in Damages

By Stephanie Robinson

Companies concerned about trademark issues should take note of a recent federal court verdict in an infringement case. On May 7, 2008, a jury in Oregon awarded Adidas $305 million in damages for trademark infringement by Payless Shoes, which is owned by Kansas-based Collective Brands. The jury?s award is believed to be the largest trademark verdict ever. Adidas alleged that Payless purchased multiple versions of Adidas?s three-stripe sneakers, sent them to China where copies were manufactured with either two or four stripes, then sold approximately 30 million pairs of the copies in its stores. Sales for the shoes totaled approximately $400 million. The verdict form in the case included pictures of more than 200 shoe styles that Adidas alleged infringed its trademarks. The jury awarded $30 million in actual damages for trademark and trade dress infringement, trademark and trade dress dilution, and unfair and deceptive trade practices. The jury also found that Payless acted willfully and ordered it to disgorge its profits from the infringing shoes, approximately $137 million. The jury also awarded approximately $137 million in punitive damages. Based on the willfulness finding, the court may also award attorney?s fees and has the option of trebling the actual damages award. Payless has indicated that it will ask the court to set the verdict aside and pursue an appeal if necessary. The verdict form itself may be accessed here: http://s.wsj.net/public/resources/documents/WSJ_JuryVerdict_No861.pdf

Full post as published by Business and Technology Law on May 14, 2008 (boomark / email).