ADIDAS AMERICA, INC., a Delaware corporation; ADIDAS AG; ADIDAS INTERNATIONAL MARKETING B.V., a foreign entity, Plaintiffs-Appellees
and Submitted October 7, 2016 Portland, Oregon
from the United States District Court for the District of
Oregon Marco A. Hernandez, District Judge, Presiding D.C. No.
Jonathan Hacker (argued), O'Melveny & Myers LLP,
Washington, D.C.; Jordan Raphael, Jeffrey A. Barker, Mark A.
Samuels, and Daniel M. Petrocelli, O'Melveny & Myers
LLP, Los Angeles, California; for Defendant-Appellant.
Richard Charles Henn Jr. (argued) and Charles H. Hooker III,
Kilpatrick Townsend & Stockton LLP, Atlanta, Georgia;
Adam H. Charnes, Kilpatrick Townsend & Stockton LLP,
Dallas, Texas; for Plaintiffs-Appellees.
Before: Diarmuid F. O'Scannlain, Richard R. Clifton, and
Jacqueline H. Nguyen, Circuit Judges.
Act / Preliminary Injunction
panel affirmed in part and reversed in part the district
court's preliminary injunction prohibiting Skechers USA,
Inc., from selling shoes that allegedly infringe and dilute
adidas America, Inc.'s Stan Smith trade dress and
in part, the panel held that the district court did not abuse
its discretion in issuing the preliminary injunction as to
adidas's claim the Skechers's Onix shoe infringed on
adidas's unregistered trade dress of its Stan Smith shoe.
The panel concluded that adidas was likely to succeed on the
merits of this claim because the trade dress was
nonfunctional, the trade dress had acquired secondary
meaning, and there was a substantial likelihood of confusion
between the parties' products. In addition, the district
court did not clearly err in finding a likelihood of
irreparable harm to the Stan Smith.
in part, the panel held that the district court erred in
issuing a preliminary injunction as to adidas's claim
that Skechers's Cross Court shoe infringed and diluted
its Three-Stripe mark. The panel held that the district court
did not err in finding that adidas showed a likelihood of
success on its trademark infringement and trademark dilution
claims. Nonetheless, the district court abused its discretion
in issuing the preliminary injunction because adidas did not
show that it would be irreparably harmed from sale of the
in part and dissenting in part, Judge Clifton wrote that the
preliminary injunction should be affirmed in full. Judge
Clifton disagreed with the majority's reversal of the
preliminary injunction as to the Cross Court shoe on the
ground that there was not evidence to support the district
court's determination that adidas was likely to suffer
NGUYEN, Circuit Judge:
USA, Inc. appeals the district court's issuance of a
preliminary injunction prohibiting it from selling shoes that
allegedly infringe and dilute adidas America, Inc.'s Stan
Smith trade dress and Three-Stripe trademark. We hold that
the district court did not abuse its discretion in issuing
the preliminary injunction as to adidas's claim that
Skechers's Onix shoe infringes on adidas's
unregistered trade dress of its Stan Smith shoe. We conclude,
however, that the district court erred in issuing a
preliminary injunction as to adidas's claim that
Skechers's Cross Court shoe infringes and dilutes its
Three-Stripe mark. Accordingly, we affirm in part and reverse
is a leading manufacturer of athletic apparel and footwear.
Skechers is a footwear company that competes with adidas in
the active footwear and apparel market. Skechers has grown to
become the second largest footwear company in the United
States, ahead of adidas and behind only Nike.
Stan Smith has become one of adidas's most successful
shoes in terms of sales and influence since its release in
the 1970s. Deemed "[t]he favorite shoe of [fashion
industry] insiders like designer Raf Simons and Marc
Jacobs" by The Wall Street Journal and the
"ultimate fashion shoe" by i-D magazine,
the Stan Smith has received extensive media coverage and been
featured in such print and online publications as
Time, Elle, InStyle, and
Vogue. The Stan Smith also has frequently appeared
on lists of the most important or influential sneakers of all
time and has earned industry accolades such as Footwear
News's 2014 "Shoe of the Year." That same
year, adidas announced that the Stan Smith had become its
top-selling shoe of all time, selling more than 40 million
is also known for its Three-Stripe mark, which has been
featured on its products for many years as part of its
branding strategy and for which it owns federal trademark
registrations. adidas claims to earn several hundred million
dollars in annual domestic sales of products bearing the
Three-Stripe mark. adidas advertises the Three-Stripe mark in
print publications, on television, and in digital media and
promotes it through celebrity endorsements, sporting events
sponsorships, and athletic partnerships.
parties have a history of trademark litigation that has
previously resulted in Skechers acknowledging that
"adidas is the exclusive owner" of the Three-Stripe
mark and agreeing not to use it or any other protected mark
"confusingly similar thereto." Despite the
agreement, adidas has sued Skechers several times in the last
twenty years for infringement of its Three-Stripe
filed the present lawsuit against Skechers on September 14,
2015, alleging, among other things, that Skechers's Onix
shoe infringes on and dilutes the unregistered trade dress of
adidas's Stan Smith shoe (both pictured below). adidas
further alleges that Skechers's Relaxed Fit Cross Court
TR (pictured below) infringes and dilutes adidas's
Three-Stripe trademark, in violation of 15 U.S.C. §
filed a motion for preliminary injunction to prohibit
Skechers from manufacturing, distributing, advertising,
selling, or offering for sale the Onix and Cross Court. The
district court granted adidas's motion and issued the
preliminary injunction, finding that adidas established all
the Winter factors. See Winter v. Nat. Res. Def.
Council, Inc., 555 U.S. 7, 20 (2008) ("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.").
review the district court's issuance of a preliminary
injunction for an abuse of discretion. See Marlyn
Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571
F.3d 873, 876 (9th Cir. 2009). "A district court abuses
its discretion in issuing a preliminary injunction if its
decision is based on either an erroneous legal standard or
clearly erroneous factual findings . . . ." Negrete
v. Allianz Life Ins. Co. of N.A., 523 F.3d 1091, 1096
(9th Cir. 2008). "The legal issues underlying the
injunction are reviewed de novo because a district court
would necessarily abuse its discretion if it based its ruling
on an erroneous view of law." GoTo.com, Inc. v. Walt
Disney Co., 202 F.3d 1199, 1204 (9th Cir. 2000)
(internal quotation marks omitted). By contrast, the district
court's factual findings are reviewed for clear error.
See Lahoti v. VeriCheck, Inc., 586 F.3d 1190,
1195-96 (9th Cir. 2009).
contests only two of the factors under Winter,
specifically, the district court's findings that adidas
showed a likelihood of success on the merits and irreparable
harm. Because the analysis for Skechers's Onix and Cross
Court shoes differ, we take them each in turn.
Skechers's Onix and adidas's Stan Smith
Likelihood of Success on the Merits
challenges the district court's finding that adidas
demonstrated a likelihood of success on its claim that
Skechers's Onix shoe infringes on and dilutes
adidas's unregistered Stan Smith trade dress.
dress protection applies to 'a combination of any
elements in which a product is presented to a buyer, '
including the shape and design of a product." Art
Attacks Ink, LLC v. MGA Entm't Inc., 581 F.3d 1138,
1145 (9th Cir. 2009) (quoting 1 J. Thomas McCarthy,
McCarthy on Trademarks and Unfair Competition §
8:1 (4th ed. 2008)).To prove infringement of an unregistered
trade dress, "a plaintiff must demonstrate that (1) the
trade dress is nonfunctional, (2) the trade dress has
acquired secondary meaning, and (3) there is a substantial
likelihood of confusion between the plaintiff's and
defendant's products." Id. Skechers
contests only the latter two elements.
dress has acquired secondary meaning when consumers associate
the design features with a particular producer. Fleischer
Studios, Inc. v. A.V.E.L.A., Inc., 654 F.3d 958, 967
(9th Cir. 2011) (citation omitted). "Secondary meaning
and likelihood of buyer confusion are separate but related
determinations . . . ." Levi Strauss & Co. v.
Blue Bell, Inc., 632 F.2d 817, 821 (9th Cir. 1980). Some
of the relevant factors for determining secondary meaning
include the exclusivity, manner, and length of use of the
trade dress, the amount and manner of advertising, the amount
of sales, and proof of intentional copying by the defendant.
Art Attacks, 581 F.3d at 1145.
district court's finding that the Stan Smith has likely
acquired secondary meaning is supported by ample evidence in
the record. The evidence showed that adidas has used the Stan
Smith trade dress exclusively since the early 1970s, expended
considerable capital and human resources to promote the shoe,
and reaped significant but difficult-to-quantify value from
placing the Stan Smith with celebrities, musicians, athletes,
and other "influencers" to drive consumer hype and
recognition of the trade dress-which, in 2014, became
adidas's top selling shoe of all time with the 40
millionth pair sold. See Transgo, Inc. v. Ajac
Transmission Parts Corp., 768 F.2d 1001, 1016 (9th Cir.
1985) (finding evidence of sales, promotional efforts, and
duration of exclusive use indicative of secondary meaning).
Also indicative of secondary meaning is the considerable
amount of unsolicited media coverage praising the Stan
Smith's influence and iconic status as one of the most
famous sneakers of all time. See Golden Door, Inc. v.
Odisho, 646 F.2d 347, 350-51 (9th Cir. 1980) ("The
district court's finding that a secondary meaning has
attached is supported by evidence of the extensive media
coverage . . . .").
own conduct also supports the district court's finding.
"[P]roof of copying strongly supports an inference of
secondary meaning." Vision Sports, Inc. v. Melville
Corp., 888 F.2d 609, 615 (9th Cir. 1989). Skechers
placed metadata tags on its website that directed consumers
who searched for "adidas Stan Smith" to the page
for the Onix shoe. "Using another's trademark in
one's metatags is much like posting a sign with
another's trademark in front of one's store."
Brookfield Commc'ns, Inc. v. W. Coast Entm't
Corp., 174 F.3d 1036, 1064 (9th Cir. 1999). We agree
with the district court that "the only reason
'adidas Stan Smith' is a useful search term is that
consumers associate the term with a distinctive and
recognizable shoe made by adidas." Therefore, the
district court did not clearly err by finding that the Stan
Smith had acquired secondary meaning.
next to the likelihood of confusion between the shoes. This
factor turns on whether a reasonably prudent consumer would
be confused about the source of the goods bearing the marks.
Dreamwerks Prod. Grp., Inc. v. SKG Studio, 142 F.3d
1127, 1129 (9th Cir. 1998). "Likelihood of confusion in
the trade dress context is evaluated by reference to the same
factors used in the ordinary trademark context[:] strength of
the trade dress, similarity between plaintiff's and
defendant's trade dress, evidence of actual confusion,
marketing channels used, type of goods and likely degree of
purchaser care, and the defendant's intent in selecting
its trade dress." Vision Sports, 888 F.2d at
616 (internal citation omitted) (citing AMF Inc. v.
Sleekcraft Boats, 599 F.2d 341, ...