Payless sold two-stripe and four-stripe shoes — the jury said $305m

The three stripes had been on adidas shoes since 1952 and were registered as a US trademark in 1994. Payless ShoeSource — the Topeka, Kansas discount chain owned by Collective Brands — sold low-priced athletic shoes carrying two parallel stripes, or four. Around the end of 2001, adidas sued Payless in federal court in Portland, Oregon, where its American business is based: trademark infringement and dilution over the stripe designs.

Payless's defence was arithmetic: its shoes carried two stripes or four, never three, so there was no infringement of the three-stripe mark. After six and a half years of litigation, the Portland jury disagreed. On May 7, 2008, it awarded adidas nearly $305 million — roughly $30 million in actual damages, $137 million of the profits Payless had made on the infringing shoes, and $137 million more in punitive damages.

Adidas trial lawyer Charlie Henn of Kilpatrick Stockton said the jury had 'sent a very clear message to companies that are engaged in the practice of selling knockoffs,' and called the award likely the largest in US trademark history. Collective Brands called the verdict 'excessive and unjustified' and promised to take 'all necessary steps to overturn it.' On the Frankfurt exchange, adidas shares closed up 5.7 per cent the day the news landed.