The Adidas and Payless Infringement Case

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Trademark infringement cases are becoming more and more common as the internet provides a global marketplace for businesses of all sizes. But before the internet was a big deal, there were the usual trademark infringement cases that covered the products and logos of certain companies.

Let’s go back to 2008, when the time was simpler, since the internet was growing, and people were more worried about what they saw in products than what they saw on the internet. It was also the time when Adidas sued Payless for trademark infringement. So if you’ve been asking yourself how much the coveted three-stripes logo of Adidas is, look no further, you’ll know by the end of this article.

Before anything else, let’s review each company’s identity, starting with Adidas.

Adidas

Adidas is one of the biggest shoe companies in the world, with a long and successful history. It was founded in Germany in 1949 by Adolf Dassler, and the company has been making shoes ever since. Adidas is known for its iconic three-stripes logo, as well as for its quality products.

Adidas’ logo has been around almost as long as the company itself. The three stripes that make up the logo were initially meant to represent the three main types of fabric that Dassler used in his shoes: kangaroo leather, cotton, and linen. However, the logo’s meaning has changed over time, and today it is simply a symbol of the brand.

Adidas’ products are used by athletes worldwide, from professional basketball players to weekend warriors. The company makes shoes for all sports, including running, soccer, and tennis. Adidas also makes clothing and accessories for athletes, such as bags and hats. It has a net worth of $16 billion in 2020, making it one of the largest apparel brands in the world.

Lawyers settling on case with gavel and weighing scales

Payless

In 1956, brothers Louis and Shaol Pozner founded Payless Drug Stores to make quality drugs available at a fair price. They started with a single store in Topeka, Kansas, and soon grew to a chain of more than 1,200 stores across the country. In the 1970s, Payless expanded beyond drugstores into other retail sectors, such as clothing and automotive parts. As a result, the company was renamed Payless ShoeSource in 1979.

Throughout its history, Payless has been known for its low prices and wide selection of shoes and other merchandise. The company has also been lauded for its customer service, often praised as being friendly and helpful. In recent years, however, Payless has faced challenges as more and more consumers shift their spending to online retailers. As a result, the company filed for bankruptcy in February 2017 and announced plans to close 400 stores.

Payless emerged from bankruptcy in August 2017 and has since closed an additional 800 stores. The company currently operates more than 2,500 stores in the United States and employs more than 22,000 people.

Now that we’ve reviewed the companies let’s look at the case itself.

The Infringement Case

On February 6, 2008, Adidas filed a lawsuit against Payless, alleging that the company had infringed on its three-stripes trademark. In addition, Adidas claimed that Payless’ use of a similar logo on its products was likely to confuse consumers. In particular, Adidas argued that Payless’s use of the logo on shoes was likely to cause consumers to believe that the two companies were affiliated.

Adidas also accused Payless of trademark dilution, alleging that the company’s use of the logo had diminished the value of the Adidas brand.

Adidas filed the lawsuit in federal court in Portland, Oregon, where Adidas is headquartered. It sought unspecified damages and an injunction against Payless’ logo use.

The two companies eventually settled the case out of court. Under the settlement terms, Payless agreed to stop using the logo in question and pay Adidas an undisclosed sum of money, but it’s argued to be around $300 million, which was later reduced to $65 million.

What Can Your Company Learn From This?

Infringement cases are becoming more common today, and that’s why it’s good to have someone protect your product and brand. Your brand can be used by other companies for their gains, even if it’s just the logo. Hiring a reputable IP firm can reduce the chances of this happening. Who knows, you might even win a million-dollar case that you can use to expand your own company, the same way Adidas did.

It’s essential always to protect your brand regardless of how big or small your company might be. Many people will refer to it in the future, and by protecting your brand, you’ll have other companies respect you.

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