Payless Must Pay Adidas $304M in Trademark Case

A federal jury in Portland, Ore., has ordered retailer Payless ShoeSource to pay $304 million in damages for infringing Adidas' trademarks for its famous three-stripe design.

The award may be the largest ever in a trademark infringement case.

"I've been trying trademark cases for 40 years and I don't know of another verdict this large," according to Adidas' attorney, Jerre B. Swann of Kilpatrick Stockton in Atlanta.

Adidas lead counsel Stephen M. Feldman of Perkins Coie in Portland echoed this sentiment, saying he was not aware of any larger verdict.

In a statement Payless holding company Collective Brands Inc. called the verdict "excessive and unjustified."

"The company will ask the court to set aside the verdict and, if it is not granted, intends to take all necessary steps to overturn it," the statement said.

The actual damages award was $30 million but the jury ordered Payless to pay an additional $137 million in punitive damages and the same amount in profits.

Adidas alleged that Payless infringed its three-stripe trademarks and its "Superstar" trade dress for athletic footwear and apparel.

The trial lasted 14 days, and the jury deliberated for two, Swann said.

In 2001 Adidas initiated trademark infringement suits against several retailers, including Payless, Kmart and Wal-Mart.

Most of the cases have settled, and the Payless case is the only one to go to trial thus far, according to Swann and Feldman.

The Wal-Mart case is scheduled to go to trial in October, they said.

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