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Adidas in Suit Against Wal-Mart

Adidas AG, the second-largest sporting goods firm in the world, is taking the world's number-one retailer, Wal-Mart Stores Inc., to court.

PARIS — Adidas AG, the second-largest sporting goods firm in the world, is taking the world’s number-one retailer, Wal-Mart Stores Inc., to court.

This story first appeared in the June 19, 2008 issue of WWD.  Subscribe Today.

The German activewear giant has filed a lawsuit against Wal-Mart for the use of two- and four-stripe motifs on its sneakers, which it claims are similar to the brand’s trademarked three stripes. The case will be heard in the federal court of Portland, Ore., in October. A spokeswoman for Adidas on Wednesday confirmed that legal proceedings have begun against Wal-Mart but declined further comment.

A Wal-Mart spokeswoman said the retail giant has been aware of the lawsuit for some time, but declined to comment on pending litigation.

This is the latest of dozens of copyright battles by the German sporting goods firm to defend its three-stripe design, which it began using in 1952 and trademarked in 1994.

In the same Portland court, Adidas was last month awarded $305 million in a lawsuit against Payless ShoeSource over its use of parallel stripes, a sum Adidas’ lawyer declared the largest ever in a trademark case.

Pointing to disputes between Adidas and Wal-Mart in 1995 and 2002, when Wal-Mart agreed not to sell products deemed confusingly similar to Adidas, legal experts warned of hefty damages if the court rules in Adidas’ favor. “This not only deals with trademark infringement, but also whether Wal-Mart has broken those previous agreements,” said Fiona McBride, a trademark attorney at British intellectual property firm Withers & Rogers, which is not involved in the case. “Wal-Mart may find if the case goes against them, the fines or damages would be higher than normal,” she continued, “because it would also be a flagrant breach of agreements already in place with Adidas.”

Analysts welcomed the news.

“It’s a good move to protect brand equity,” said Erwan Rambourg, a London-based luxury and sporting goods analyst for HSBC, adding that it could set an example to help Adidas ensure it is less copied in emerging markets such as China.

“Clearly [Nike’s] swoosh has been easier to defend than the three stripes,” he continued. “It’s very important for Adidas to protect its future.”