Adidas Sues Aldo Over Claim It Copied Three-Stripe Design

Adidas AG, the world’s second- largest sporting-goods maker, sued Aldo Group Inc. over claims the Canadian footwear retailer copied a three-stripe design in violation of two earlier settlement agreements.

Aldo, a closely held operator of more than 840 stores worldwide, infringed Adidas trademarks for three-stripe patterns by selling shoes with two-stripe "imitations," according to a complaint filed Jan. 14 in federal court in Portland, Oregon.

"Aldo intentionally designed and manufactured its footwear to mislead and deceive consumers into believing the footwear was manufactured, sold, authorized or licensed by Adidas," the company, based in Herzogenaurach, Germany, said in the complaint.

Adidas has sued about three dozen retailers since 1999 in the U.S. and Europe to keep what it considers knockoffs of its shoes and clothing from diluting the brand. The campaign paid off last year when a jury in Portland, where its North American unit is based, ordered Collective Brands Inc.’s Payless ShoeSource to pay $304.6 million for violating the same trademarks. The award was later reduced by a judge to $64.4 million.

Adidas claims Aldo, based in Saint-Laurent, Quebec, also breached two out-of-court settlements between the companies in 2004 and 2006. Aldo agreed in both accords to stop making or selling shoes bearing two-stripe or four-stripe designs or "confusingly similar" patterns of any kind, according to the complaint.

Famous Mark

Aldo’s use of the designs is "eroding the public’s exclusive identification of this famous mark with Adidas, tarnishing and degrading the positive associations and prestigious connotations of the mark," Adidas said in the complaint.

Adidas in September reached a confidential settlement of a similar lawsuit against Wal-Mart Stores Inc., the world’s largest retailer. Wal-Mart had also settled two earlier suits by Adidas over striped sneakers and was accused of violating those accords.

In May, two days after the Payless verdict, Adidas settled another trademark lawsuit against Sears Holdings Corp.’s Kmart unit. The German shoemaker has also sued Steven Madden Ltd., Polo Ralph Lauren Corp., Target Corp. and Nordstrom Inc. Those cases were all settled before going to trial.

Adidas is seeking unspecified money damages. A telephone message left for Aldo’s corporate lawyer after business hours wasn’t immediately returned.

The case is Adidas America Inc. v. Aldo Group Inc., 3:09- cv-00056, U.S. District Court, District of Oregon (Portland).

(Published by Bloomberg - January 17, 2009)