By Jenna Herr
Last May, the Ninth Circuit Court of Appeals successfully ended the lengthy battle between sportswear rivals Adidas AG (hereinafter “adidas”) and Skechers USA Inc. (“Skechers”), but the court failed to answer a major question in the law: exactly how do you measure “irreparable harm” in order to win a preliminary injunction?[1]
In a legal battle that started almost three years ago, adidas alleged that two Skechers shoes displayed designs similar to its own “three stripe” logo, infringing its trademarks.[2] adidas secured a win in the lower court, earning a preliminary injunction preventing Skechers from manufacturing, distributing, advertising, selling, or offering the sale of any shoe confusingly similar to adidas’ trademarks.[3] The Ninth Circuit heard arguments on appeal this past May, reversing the injunction for one of Skechers’ shoes, due to adidas’ failure to provide concrete evidence in support of a finding of irreparable harm.[4] Based on testimony from its own employees, adidas set forth a narrow argument of consumer post-sale confusion between the two sportwear giants’ shoes, resulting in a loss of brand control.[5] This argument rested on the theory that, once the sale is made, onlookers viewing Skechers’ shoe from afar may mistake it for an adidas shoe.[6] Despite finding a likelihood of success on the merits, the court ultimately found adidas’ argument for irreparable harm less than compelling, emphasizing the end of the decades long presumption.[7]
In order to be granted injunctive relief, a plaintiff must show that it will suffer a likelihood of irreparable harm in the absence of an injunction. Until 2006, federal courts applied a presumption of irreparable harm upon showing that infringement is likely.[8] However, the Ninth Circuit has since made clear that this presumption should no longer be applied.[9] In the trademark infringement case Herb Reed Enterprises v. Florida Entertainment Management,[10] the court reversed a preliminary injunction, stating “[g]one are the days when ‘it is ordinarily presumed that the plaintiff will suffer irreparable harm if injunctive relief does not issue.’”[11] While the court underscored that actual harm must be demonstrated with concrete evidence, it left open questions of what would qualify as such.[12]
Some have argued that successfully proving infringement inherently means successfully proving consumer confusion, posing the question: what else is there to show?[13] This has been a long-anticipated answer that, yet again, the Ninth Circuit had the opportunity to deliver earlier this year. Ultimately, the adidas decision failed to provide guidance on the evidentiary standard that trademark attorneys have been waiting years to receive.[14] The phrase “concrete evidence” has been provided, yet, what that term entails remains unclear.[15] The case provided some clarity on this in the courts’ refusal to accept testimony from adidas’ own employees as sufficient concrete evidence.[16] Additional evidence such as industry experts, consumer surveys, or media comments, could have been beneficial for adidas’ argument that Skechers was a lesser quality “value” brand.[17] Some continue to criticize the departure from the presumption of irreparable harm, arguing it was a long-recognized evidentiary rule in Lanham Act cases, and bad public policy permitting continued sales of products that have already been shown to be infringing.[18] However, the decision highlighted that the presumption will remain a thing of the past, and with that, parties seeking injunctive relief are now burdened with an extra hurdle to jump over. As to guidance on clearing that hurdle, the wait for answers will continue.
[1] See Bill Donahue, Adidas v. Skechers Trademark Ruling Leaves Plenty Unclear, Law 360 (May 18, 2018, 5:51 PM), https://www.law360.com/articles/1045298/adidas-v-skechers-trademark-ruling-leaves-plenty-unclear.
[2] Adidas Am., Inc. v. Skechers USA, Inc., 890 F.3d 747 (9th Cir. 2018).
[3] Adidas Am., Inc., v. Skechers USA, Inc., 149 F. Supp. 3d 1222, 1229 (D. Or. 2016).
[4] Adidas Am., Inc., 890 F.3d at 761 (2018).
[5] Id. at 759.
[6] Milton Springut, ‘Adidas’ Case Informs Importance of Building a Strong Case of Irreparable Harm in Trademark Cases, N.Y. L. J. (June 5, 2018), https://www.law.com/newyorklawjournal/2018/06/05/adidas-case-informs-importance-of-building-a-strong-case-of-irreparable-harm-in-trademark-cases/.
[7] Adidas Am., Inc., 890 F.3d at 760-61 (2018).
[8] Id.
[9] See Herb Reed Enter. v. Fla. Entm’t Mgmt., 736 F.3d 1239 (9th Cir. 2013).
[10] 736 F.3d 1239 (9th Cir. 2013).
[11] Id. at 1250–51 (quoting Rodeo Collection, Ltd. v. W. Seventh, 812 F.2d 1215, 1220 (9th Cir. 1987)).
[12] Id. at 1250.
[13] See, e.g., Donahue, supra note 1 (providing arguments from several trademark litigation attorneys in support of the presumption of irreparable harm).
[14] See Crystal Nwaneri, Non-Marking Sole? Lessons from adidas v. Skechers, JDSupra (July 12, 2018), https://www.jdsupra.com/legalnews/non-marking-sole-lessons-from-adidas-v-72399/.
[15] Adidas Am., Inc. v. Skechers USA, Inc., 890 F.3d 747, 761 (9th Cir. 2018).
[16] Id.
[17] Springut, supra note 10.
[18] See Donahue, supra note 1; see also Adidas Am., Inc., 890 F.3d at 761-68 (2018) (Clifton, J., dissenting).
