By Jonathan Stempel
(Reuters) - A U.S. appeals court on Thursday said Adidas AG can protect its famous Stan Smith tennis shoe against an alleged Skechers USA Inc knockoff, but that Skechers could sell another shoe mimicking Adidas' familiar "three-stripe" design.
The 9th U.S. Circuit Court of Appeals upheld a preliminary injunction barring Skechers from selling its Onix shoe, which Adidas said looked too much like its white Stan Smith shoe, its all-time best-seller with more than 40 million pairs sold.
The court, which sat in Portland, Oregon, also reversed a similar injunction barring Skechers from selling its Cross Court shoe, which has three stripes on its side, finding no proof Adidas would suffer irreparable harm.
Neither company immediately responded to requests for comment.
The lawsuit is one of many by footwear makers seeking to protect their patent and trademark rights.
Many are filed by companies such as Adidas against companies such as Skechers whose products sell for lower prices.
Adidas has sued Skechers several times in the last two decades for alleged infringement of its three-stripe trademark.
Writing for a 3-0 panel, Circuit Judge Jacqueline Nguyen said the Stan Smith, named for the early 1970s American tennis star, has enjoyed "tremendous commercial success and market recognition," and Adidas might face irreparable harm if similar shoes flooded the market.
She also said evidence suggested that Skechers intended to confuse consumers by creating the "nearly identical" Onix, and then directing consumers who searched online for "adidas stan smith" to the Onix website.
By a 2-1 vote, however, the same panel said Adidas failed to show that consumers would associate it with Skechers' Cross Court, and dilute Adidas' reputation as a "premium" brand.
"Adidas did not set forth evidence probative of Skechers' allegedly less favorable reputation," Nguyen wrote.
Circuit Judge Richard Clifton would have upheld the entire injunction, which was issued in February 2016 by U.S. District Judge Marco Hernandez in Portland. The appeals court returned the case to Hernandez for further proceedings.
The case is Adidas America Inc et al v Skechers USA Inc, 9th U.S. Circuit Court of Appeals, No. 16-35204.
(Reporting by Jonathan Stempel in New York; Editing by David Gregorio)
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Updated Date: May 11, 2018 00:07 AM