Adidas’ Counterfeit Claims Land Federal Court I.P. Review

Adidas is suing 83 websites that the footwear and apparel giant accuses of selling counterfeit and infringing versions of Adidas products. It is the latest example of a major brand turning to the law to stop the proliferation of fake products that damage the brand’s name and goodwill.

The complaint, Adidas AG et al v. et al, was filed in a Fort Lauderdale federal court on Dec. 6 by attorney Stephen Gaffigan. Adidas says the defendants operate through domain names that are registered in “multiple countries” and rely on aliases, including through fake contact information when registering domain names. They allegedly contribute to an “ongoing scheme to create and maintain illegal marketplace enterprise” that both “confuses consumers” as to the actual source of items they buy online and “expands the marketplace” for the sale of illegal and counterfeit products. Adidas suffers not only lost potential sales but also the “erosion and destruction” of consumers’ impressions of the Adidas brand and its associated trademarks.

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The websites named in the complaint attempt to give the appearance of being legitimate Adidas websites. One repeatedly uses the Adidas logo and offers company statements, such as a note that “The adidas brand has a long history and deep-rooted connection with sport … and [has] become recognized, credible, and iconic brands both on and off the field of play.” At the same time, the websites market what they contend are Adidas footwear but at heavily discounted prices. For example, one website sells counterfeit Kaptir Super Shoes for $22.50;  at they sell for $90.

Adidas also points out that counterfeit sales negatively impact its endorsers and partners. The complaint references the company’s “long-term relationships” with universities as well as with celebrity athletes such as James Harden, Trae Young, Patrick Mahomes, Aaron Rodgers, David Beckman, Lionel Messi and P.K. Subban. The impact is apparent when canvassing the defendants’ websites. One sells a counterfeit Harden Vol. 5 Futurenatural sneaker for $45.50 while the real one retails for $130.

The complaint contains claims for trademark counterfeiting and infringement, cybersquatting and unfair competition. Adidas demands an injunction barring these websites and their associated businesses from selling counterfeit and infringing goods and that each pays its profits and accompanying damages to Adidas for each counterfeit trademark used and product type sold. It also demands the domain registry for each of the websites suspend the domains and that search engines permanently disable, de-index or delist all the associated URLs.

The case is before Judge Raag Singhal. The defendants will have an opportunity to answer the complaint and deny the accusations.

Adidas’ use of federal courts to enforce its intellectual property rights follows a ruling in August by the U.S. Court of Appeals for the Seventh Circuit in favor of the licensing arms of the NBA, MLB, NHL and NFL, as well as Collegiate Licensing Company (the trademark licensing and enforcement agent for numerous colleges). In NBA Properties v. Hanwjh, the court held that an overseas company can be tried in American court when it is accused of selling counterfeit and infringing goods to American consumers. The Adidas case furthers that principle by trying to hold accountable businesses that are similarly based abroad and attempting to generate sales in the U.S.

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