Adidas has finally agreed to an out-of-court settlement in a recent trademark lawsuit with clothing retailer Forever21, which arose from the brands’ long-term dispute with the retailer regarding Adidas’ allegations that Forever21 has been wrongfully using their registered “three stripe” trademark. The terms of the settlement were not initially disclosed.
This dispute escalated in March of 2017, when Adidas America, the American branch of the Herzogenaurach, Germany-based multinational athletic shoe corporation, sued Forever 21, Inc., the Los Angeles, California-based clothing and accessories retailer, as well as a group of its suppliers in Oregon, for allegedly using Adidas’ registered “three stripe” trademark on their clothing.
Adidas’ complaint alleged that Forever21 committed trademark infringement, unfair competition, trademark dilution, and deceptive trade practices. Adidas petitioned the court to order Forever 21, via an injunction, to stop selling the product(s) at issue and requested damages which included lost profits, in addition to punitive damages, which interestingly enough, is a type of remedy not actually authorized by the Lanham Act for willful trademark infringement, but can be requested if brought in a state court.
The complaint was initially undisclosed in order to protect the company’s trade secrets. However, in July of 2017, the court unsealed the complaint and it was then revealed that Adidas also alleged that Forever 21 was selling counterfeit products, specifically mentioning track pants and shorts that had the three stripe mark that were being sold by the clothing retailer.
Adidas stated that, “[t]he infringing apparel and footwear and counterfeit apparel imitates Adidas’s three-stripe mark… in a manner that is likely to cause consumer confusion and deceive the public regarding their source, sponsorship, or affiliation.”
Adidas and Forever 21 have a decade-long history of fighting over striped clothing. In a document submitted to the court, Forever 21 claimed that “[s]ince 2006, Adidas has commenced a pattern of complaining about striped apparel sold by Forever 21, and it has steadfastly increased its threats to encompass virtually any item of clothing with decorative stripes.” Forever 21 filed a subsequent lawsuit against Adidas in the U.S. District Court for the Central District of California in March of 2017.
Adidas is well known for aggressively enforcing its perceived trademark rights against all others, suing and threatening to file lawsuits generally against retailers and footwear and clothing manufacturers who use three stripes in any manner that Adidas believes is likely to cause confusion. Such aggressive trademark enforcement is a type of strategy that intellectual property holders regularly employ to protect their IP rights in the U.S. Adidas has already previously sued Ecco, Marc Jacobs, Skechers, and Tesla for claims of infringing on its registered thee stripe trademark.