Adidas Vs. Payless

Adidas is a shoe company that was founded in 1924 with the idea of exclusively making shoes to be worn to play sports. As the brand grew more popularity, it became known for innovation and quality – and was easily identifiable with their three-stripes trademark. Payless ShoeSource is a retail chain that provides customers with “current fashions at modest prices”. As the case mentioned, Payless draws inspiration from others companies to build its own product line. In 1994, Adidas first took Payless to court for selling athletic shoes that were “confusingly similar” to Adidas three-stripes trademark. Payless ultimately agreed not to sell athletic shoes with two, three, or four stripes. In 2001, Adidas filed a second action against Payless accusing them of willfully infringing the Adidas three-stripes trademark and diluting their brand. In this case study, we will examine what images consumers associate with Adidas and Payless and evaluate if Payless was likely to dilute the brand by tarnishing and blurring it.

From its start, Adidas has been marketing its products with high visibility athletes and celebrities. Jesse Owens, won four gold medals wearing Adidas. Mohammed Ali praised his Adidas shoes as his secret weapon of making him so light on his feet. Dick Fosbury won a gold medal with his 2.24 meter jump in his Adidas shoes. Not only have athletes endorsed Adidas, but celebrities as well. In 1985, Run DMC promoted the brand into the hip-hop community and today the swagger continues with Kanye West promoting and designing a collection for the brand. Needless to say, the Adidas brand plays an integral part in the sports community as well consumer purchase decisions. When a consumer thinks of the Adidas brand they think of style, quality, and innovation. The three-stripes trademark of Adidas is the foundation for which the brand has been built. The trademark is easily identifiable and an icon in the athletic shoe industry.

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