Adidas Legal

Nike further claimed that the designers began planning their departure in April 2013 by submitting their studio plan (which Nike says is just a decoupling from its existing design studio, the Innovation Kitchen) to adidas and then providing adidas with information about Nike`s plans for the next few years related to its racing departments, sportswear and football. Adidas would have liked the idea of the studio so much that its executives offered designers lucrative employment contracts to jump out of Nike. At the trial, Nike spokesman Vada Manager told reporters: “SHOX has been the next evolution of our shoe technology since Nike Air`s debut in 1979, so it`s an important core technology for us. Despite Nike`s patent protection, adidas has built shoes that use Nike`s technology. Eric Spunk, global vice president of footwear at Nike, also released a statement saying, “It`s deeply frustrating and inappropriate for companies to borrow or rethink these technologies like their own without making similar investments.” A year later, in 2006, Nike filed a lawsuit against adidas in the U.S. District Court for the Eastern District of Texas for patent infringement in connection with a patent for shoes with a side stabilizer sole (read: elements of Nike`s SHOX damping technology). According to Nike`s complaint, the development of the SHOX technology took 16 years, as well as a significant financial investment to bring it to market, and is protected by at least 19 separate patents. Not surprisingly, this trial was settled in court in June 2015 “by a confidential settlement” and Marc Dolce, Denis Dekovic and Mark Miner began their tenure at adidas in March 2016. Although the lawsuit was not filed directly against adidas, the German sportswear giant reportedly promised to pay the legal fees of the three designers if Nike was sued, and so it was heavily involved. Nike claimed that adidas was aware of the non-compete clauses and promised to pay for all legal consequences. While this seemed quite favorable to Nike, given that the court had issued Nike`s injunction, the case initially seemed quite favorable to Nike, the court eventually ruled in favor of adidas on the grounds that the technology involved in making the shoe`s knitted upper has existed since the 1940s (thus not meeting the novelty element required for patentability).

As a result, the injunction was set aside, Nike`s patent was declared invalid, and adidas is free to make shoes with the knitted elements. But that`s not all, of course. Adidas` debut was quickly followed by a patent infringement action brought by Nike in a Nuremberg District Court, in which Nike sought to permanently prohibit adidas from manufacturing and selling Primeknit in Germany for the duration of the dispute and, depending on the outcome of the case. (Nike spokeswoman Mary Remuzzi said the case was filed and restricted in Germany because it was the only place adidas made and distributed Primeknit at the time.) Since then, Nike and adidas have started selling their respective knitted shoes in the United States, and adidas challenged the validity of Nike`s patent in late 2012 to prevent Nike from taking legal action to prevent adidas from selling the shoe. Adidas argues that Nike`s patent is invalid on the basis of another party`s 1991 patent application revealing a process of manufacturing tops cut from a textile mesh, then shaped and joined to a sole – making Nike`s patent obvious (non-obviousness is a necessary element, to achieve patentability). This case is still ongoing. More recently, in April 2016, adidas filed a series of inter partes applications (a procedure for invalidating an already granted patent) with the U.S. Patent Trial and Appeal Board. Zak Kurtz, a legal services provider for sneakers and streetwear known on Instagram as Sneaker Legal, agreed that it is likely that Adidas owns the intellectual property related to these Yeezy designs. In September 2015, GQ`s Matthew Shaer wrote the biggest sportswear rivals on the market.

Now, exactly two years later, adidas has surpassed Nike`s Jordan brand as the second most popular sneaker company, based on sales in the United States. With such a step in mind, it seems that the time has come to revisit the legal history between the two sportswear giants. While all signs suggest that West has few lawsuits against Adidas, the company can likely claim a breach of contract by West due to a breach of confidentiality, as well as an insult to the company and its executives. While details of West`s contract are unknown, legal experts say some conclusions can be drawn about the partnership. “For decades, it seemed like no company could ever topple Nike, the $86 billion global sneaker behemoth. But on the other side of the city, from Nike`s top-secret headquarters in Oregon, adidas suddenly launched a full-scale arms race, debauched designers, signed superstar endorsements, and unveiled space-age technology to dethrone the king. Let`s start with the $10 million lawsuit that almost everyone knows: the one Nike conducted in late 2014 against its three high-profile designers who jumped to adidas and allegedly took a “treasure trove” of confidential information. Meanwhile, Nike and adidas were on trial in a number of other cases. And that`s not all.

There`s the 2005 case Nike filed against adidas in a federal court in Oregon to get a court ruling that the use of two stripes in clothing designs does not violate or dilute adidas` three-band brand. (This type of action is called a declaratory judgment.) It turned out that Nike was prompted to take this legal action after adidas filed lawsuits against Nike in Germany and the Netherlands in connection with Nike`s use of two stripes on clothing. On January 20, 2005, a German court ruled in favor of adidas and ruled that the two-band garments sold by Nike in Germany infringed adidas` three-band brand. In addition, Nike claims that the three men stole millions of dollars in confidential information (think: confidential design and business documents, including never-before-seen shoe designs made for one of the Nike-sponsored athletes) when they had their work computers copied and brought that information to adidas, where they were allegedly recruited to create an imitator of the Nike design studio. For example, there is the ongoing legal drama around the knitted shoe designs of both brands. In the run-up to the London Olympics in 2012, Nike and adidas launched their first knitted running shoes: the Flyknit for Nike and the Primeknit for adidas. Nike announced the debut of its shoe in February 2012, and Adidas unveiled its knitted shoes the following July, praising the product as “the first running shoe of its kind.” Meanwhile, legal media have highlighted the importance of the growing legal rivalry between the two sportswear giants, writing: Nike`s decision “signals that intellectual property will play an important role in the growing battle of companies for market share in the rapidly consolidating industry.” That action was dismissed in 2007. In August 2012, the court granted Nike`s injunction and ordered adidas to stop selling and producing its knitted sneakers. In return, adidas challenged the validity of Nike`s European patent a few months later. Nike Inc and Adidas AG, the world`s two largest sneaker brands, have a series of U.S. patent litigation over the technology used in their sneakers, according to court records.

If that were the case, West would have little support for claims he has made in the past, like Adidas copying his designs to create the Adilette 22 slide, calling it “a fake Yeezy” in June. As Goldstein explained, “They can`t steal anything they own.” A drop in profits is not the only source of concern for Adidas. As Kurtz pointed out, although West is listed as the inventor of the Yeezy Slide design patent, another shoe he claimed Adidas had copied could have acquired that patent. Adidas filed its own lawsuit in East Texas in June, arguing that Nike`s Adapt shoe customization technology, the Run Club and Training Club training apps, as well as the SNKRS app for selling limited-edition shoes, infringe all of its patents. “Adidas kind of tumbled down until the Yeezys came out,” Kurtz said. “If Adidas loses Kanye, I think it could definitely be a big success for them.” In a 2019 interview with Forbes, West claimed that he still owns 100% of Yeezy. However, as Goldstein pointed out, while West may still own Yeezy`s name and likeness, actual shoe designs likely fall under the purview of the company holding the intellectual property, which is likely Adidas. This could potentially give Adidas the ability to republish designs from the archives or restart the designs in new color variations.

In recent weeks, West posted a fake front-page headline on his Instagram account that read, “Kasper Rørsted is also dead at 60,” referring to the Adidas CEO who will step down next year. He also shared a number of messages aimed at Adidas` executive vice president and chief executive officer, Daniel Cherry III, who joined the company in January, and also posted head photos of the company`s board members. Other images posted included a photo of West and Cherry facing each other, with the words “Adidas Civil War” between them, reminiscent of the Marvel Studios movie poster “Captain America: Civil War.” Adidas reported a 28 percent drop in operating profit to $398.4 million in the second quarter due to the suspension of operations in Russia, pandemic-related lockdowns in China and Vietnam, and rising supply chain costs.