Tuesday, May 6, 2008

Shoe Company Discovers That Infringement Can Be Expensive

A discount shoe company lost some big money because of their use of what a Portland court determined to be a protected mark this week.

As soccer players and fans of old school rap already knew, Adidas uses three more or less vertical stripes to represent their products. Collective Brands, Inc., makers of Payless and Stride Rite learned that the hard ($305 million) way.

Read more about the case here.

Companies sue each other all the time, but it's interesting to me that these three lines cost Collective Brands so many millions of dollars. How can somebody register something as simple as a geographic figure?

Trademark law covers much more than words and pictures. Essentially, anything that helps consumers identify a specific service or product is protected. Stephen Elias talks about it in his excellent Trademark: Legal Care for Your Business & Product Name (available at SFPL):

"...[I]t's not just a clever business or product name that pulls in the customers. Equally important in the vast U.S. consumer marketplace are the logos, packaging, innovative product shapes, cartoon characters, website address names (domain names), and unique product characteristics that businesses are using to hawk their wares."

Something as simple as a big yellow "M," a big brown truck, or pink fiberglass insulation can qualify. A mark, unlike a patent or a copyright, doesn't have to be unique to the world; it simply has to be unique as a marketing device for a particular product or service.

I'm going to assume that Collective Brands, Inc., didn't innocently use the vertical stripes, that it never occurred to their designers that the design resembled Adidas'. Trademarks exist so that consumers can reliably identify goods and services from certain providers, so it seems like a legit ruling to me. Anybody else?

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