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A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.
Plaintiffs Adidas America Inc. was the leading manufacturer of athletic apparel and footwear. Defendant Skechers USA Inc. was a footwear company that competed with plaintiff in the active footwear and apparel market. The Stan Smith had become one of the plaintiff’s most successful shoes in terms of sales and influence since its release in the 1970s. It had also frequently appeared on lists of the most important or influential sneakers of all time and earned industry accolades such as Footwear News's 2014 "Shoe of the Year." That same year, plaintiff announced that it had become its top-selling shoe of all time. Plaintiff was likewise known for its Three-Stripe mark, as part of its branding strategy and for which it owned federal trademark registrations. Plaintiff advertised the Three-Stripe mark in print publications, on television, and in digital media and promoted it through celebrity endorsements, sporting events sponsorships, and athletic partnerships. The parties had a history of trademark litigation that previously resulted in defendant acknowledging that it was plaintiff who was the exclusive owner of the Three-Stripe mark. Defendant agreed not to use it or any other protected mark confusingly similar thereto. Despite the agreement, plaintiff sued defendant several times in the last twenty years for infringement of its trademark. Plaintiffs Adidas America Inc., Adidas AG, and Adidas International Marketing B.V. filed this present lawsuit against defendant alleging that its Onix shoe infringed on and diluted the unregistered trade dress of plaintiff’s Stan Smith shoe. Plaintiff further alleged that defendant’s Relaxed Fit Cross Court TR infringed and diluted plaintiff’s Three-Stripe trademark, in violation of 15 U.S.C. § 1125(a), (c). Plaintiff then filed a motion for preliminary injunction to prohibit defendant from manufacturing, distributing, advertising, selling, or offering for sale those shoes at issue. The district court granted plaintiff’s motion and issued the preliminary injunction. Defendant appealed.
Did the district court err in granting plaintiffs' motion for preliminary injunction?
The court held that the district court did not abuse its discretion in issuing the preliminary injunction as to plaintiff’s claim that defendant’s shoe infringed on the former’s unregistered trade dress of its Stan Smith shoe. The court ruled that the district court did not clearly err in concluding that plaintiff was likely to succeed in its claim because there was a likelihood of consumer confusion given the extensive similarities and closely related nature of the shoes. Likewise, the court held that the district court's finding of irreparable harm was not clearly erroneous because there was evidence that plaintiff had built a specific reputation around the shoe at issue and customer surveys demonstrated that those intangible benefits would be harmed if the defendant’s shoe stayed on the market. Moreover, the court held that the district court did not clearly err in finding that plaintiff had demonstrated a likelihood of success on its trademark infringement claim under 15 U.S.C.S. § 1125(a) because of the strength of the mark and the defendant's strong similar mark. However, the court found that the district court erred in issuing a preliminary injunction as to plaintiff’s claim that defendant’s Cross Court shoe infringed on and diluted its Three-Stripe mark. The court found no evidence that there was a likelihood of irreparable harm. Accordingly, the decision appealed was affirmed in part and reversed in part.