Friday, February 17, 2006

Nike Sues Rival Adidas Over Patent for Cushioned Shoe

Feb. 16 (Bloomberg) -- Nike Inc., the world's biggest maker of athletic shoes, accused rival Adidas-Salomon AG of infringing its patented method for cushioning soles and using it in its running, basketball and tennis footwear lines.

Nike filed a lawsuit in federal court in Lufkin, Texas, saying Adidas infringed Nike's ``Shox'' cushioning technology, which is protected by 19 patents and took 16 years to develop, Nike said in a statement.

Nike said Adidas' $250 Adidas 1 running shoe, the German company's most expensive men's shoe, and its $150 Kevin Garnett basketball shoes have cushioning systems that infringe the patents. Adidas, which purchased Reebok International Ltd. last month for $3.8 billion to better compete with Nike, has 28 percent of the $18 billion global athletic-shoe market. Nike has 31 percent.

``It is deeply frustrating and inappropriate when companies borrow or refashion such technologies as their own without making similar investments,'' said Eric Sprunk, vice president of global footwear at Nike, in a statement.

The suit seeks to halt the sales of the shoes that infringe the patents, as well as unspecified damages. Calls to Adidas offices in Herzogenaurach, Germany, and Portland, Oregon, weren't answered after business hours.

Shox System
Nike began offering the Shox cushioning system in 2000 and received patents for it in 2002, said Vada Manager, a spokesman for Nike, in an interview. The cushioning is used across several lines of athletic shoes, including running, basketball, tennis and cross-training footwear, he said.

Manager said the lawsuit was filed in Texas because some of the shoes in question were sold there and the court in Lufkin has expertise in intellectual-property cases. Nike sued two other companies last week, claiming infringement of footwear design patents, the company said.

Nike's profit rose 15 percent in the second quarter, the company reported Dec. 20. Global orders of shoes and clothing for delivery between December and April, a gauge of future sales, rose 2.5 percent, less then the 7 percent estimated by some analysts.

Adidas bought Canton, Massachusetts-based Reebok to gain more of the $110 billion sneaker and sports-equipment market, boost its influence when negotiating for athlete sponsorships and endorsements and get better deals from retailers such as Foot Locker Inc.

Adidas has about 20 percent of the U.S. market after the Reebok purchase, compared with Nike's 40 percent.

The shares of Beaverton, Oregon-based Nike rose 49 cents to $84.76 in New York Stock Exchange composite trading today.

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