SKECHERS Scores Major Victories in Patent Dispute with adidas

-Court Denies adidas’ Motion for a Preliminary Injunction

-Court Dismisses adidas’ Claim for Willful Infringement Against Skechers

MANHATTAN BEACH, Calif.--()--SKECHERS USA, INC. (NYSE: SKX), a global lifestyle and performance footwear brand, today announced that in two separate rulings the United States District Court for the District of Oregon denied adidas’ motion for a preliminary injunction seeking to prevent Skechers from selling its Mega-Blade series of children’s shoes, and dismissed adidas’ claim against Skechers for willful infringement of two patents allegedly covering adidas’ Springblade shoes.

In July 2016, adidas sued Skechers in U.S. District Court of Oregon alleging that Skechers’ Mega-Blade series of children’s shoes infringed two separate adidas patents covering the “leaf spring” sole for its Springblade shoe style. adidas’ complaint also alleged that Skechers intentionally and willfully infringed both patents and sought enhanced damages. adidas also moved for a preliminary injunction that same month seeking to prohibit Skechers, among other things, from selling the Mega-Blade shoes.

In denying adidas’ motion for a preliminary injunction, the Court found that adidas was unable to show that it is likely to win the case at trial, referring to a ruling in a related proceeding before the U.S. Patent Trial and Appeal Board (“PTAB”) where Skechers produced evidence that adidas’ patents were invalid and convinced the PTAB to institute an inter partes review of the patents. The Court stated that adidas “cannot, at this time, show a likelihood of success on the merits” because “81 percent of [PTAB review proceedings] result in invalidation of at least some of the challenged claims, and 65 percent invalidated all of the challenged claims.”

adidas also argued that the sale of the Mega-Blade shoes causes adidas irreparable harm by having an adverse effect on the reputation, sales, pricing and market share of the adidas Springblade model. The Court disagreed with adidas, citing the complete absence of any evidence and stating, that “adidas’ evidence of irreparable injury is too conclusory and speculative to meet adidas’ burden for a preliminary injunction.”

In a separate ruling the same day, the Court dismissed adidas’ claim for willful and intentional infringement against Skechers, stating that adidas failed to plead any “facts from which the Court may draw the reasonable inference that [Skechers] knew of the patents-in-suit either when they issued or any time before [adidas] filed this lawsuit. Thus, [adidas’] allegations are insufficient to state a claim for willful infringement based on [Skechers’ conduct] before the lawsuit was filed.”

“The Court’s ruling inherently recognizes the weak and speculative nature of adidas’ allegations against Skechers,” stated Michael Greenberg, president of Skechers. “As owners of a vast worldwide portfolio of trademarks, patents and copyrights, Skechers respects the intellectual property rights of other companies and has invested tremendous resources into building a brand identity by developing its own distinctive designs, not by copying others. We are pleased with both of the Court’s rulings.”

Skechers is represented in the matter by Daniel Petrocelli, Mark Samuels, Jeffrey Barker and Brian Berliner of O'Melveny & Myers LLP.

About Skechers USA, Inc.

Skechers USA, Inc., based in Manhattan Beach, California, designs, develops and markets a diverse range of lifestyle footwear for men, women and children, as well as performance footwear for men and women. Skechers footwear is available in the United States and over 160 countries and territories worldwide via department and specialty stores, more than 2,055 Skechers Company-owned and third-party-owned retail stores, and the Company’s e-commerce websites. The Company manages its international business through a network of global distributors, joint venture partners in Asia and the Middle East, and wholly-owned subsidiaries in Canada, Japan, throughout Europe and Latin America. For more information, please visit skechers.com and follow us on Facebook (facebook.com/SKECHERS) and Twitter (twitter.com/SKECHERSUSA).

This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, the Company’s future domestic and international growth, financial results and operations including expected net sales and earnings, its development of new products, future demand for its products, its planned domestic and international expansion, opening of new stores and additional expenditures, and advertising and marketing initiatives. Forward-looking statements can be identified by the use of forward-looking language such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will be,” “will continue,” “will result,” “could,” “may,” “might,” or any variations of such words with similar meanings. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include international economic, political and market conditions including the uncertainty of sustained recovery in Europe; sustaining, managing and forecasting costs and proper inventory levels; losing any significant customers; decreased demand by industry retailers and cancellation of order commitments due to the lack of popularity of particular designs and/or categories of products; maintaining brand image and intense competition among sellers of footwear for consumers, especially in the highly competitive performance footwear market; anticipating, identifying, interpreting or forecasting changes in fashion trends, consumer demand for the products and the various market factors described above; sales levels during the spring, back-to-school and holiday selling seasons; and other factors referenced or incorporated by reference in the Company’s annual report on Form 10-K for the year ended December 31, 2016 and its quarterly report on Form 10-Q for the three months ended March 31, 2017. The risks included here are not exhaustive. The Company operates in a very competitive and rapidly changing environment. New risks emerge from time to time and the companies cannot predict all such risk factors, nor can the companies assess the impact of all such risk factors on their respective businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. Moreover, reported results should not be considered an indication of future performance.

Contacts

SKECHERS USA
Jennifer Clay, 310-937-1326
jennc@skechers.com

Release Summary

SKECHERS SCORES MAJOR VICTORIES IN PATENT DISPUTE WITH ADIDAS

Contacts

SKECHERS USA
Jennifer Clay, 310-937-1326
jennc@skechers.com