A court in Düsseldorf has rejected an attempt by Adidas to prohibit the sale of running footwear by Puma with a lightweight and bouncy sole that has some of the same characteristics as the Boost soles of the Adidas brand.
Adidas filed for an injunction to halt sales of Puma's NRGY running footwear with expanded thermoplastic polyurethane (ETPU) soles last July. The judgment issued in October was in Puma's favor, and the regional high court of Düsseldorf again disagreed with Adidas on April 19. If Adidas wants to take the matter any further it would have to file for full proceedings, which could take several years to come to a conclusion.
Both companies have been working on ETPU soles with BASF but the German chemicals firm ended up sealing an exclusive deal for such soles with Adidas, leading to the launch of Boost products in 2013. So Puma searched for another partner and in 2014 it teamed up with Huntsman Corp, a U.S. chemicals group, to start marketing the NRGY range with ETPU soles last year.
Puma said that, due to the case, it refrained from spreading the NRGY technology too widely, but that may well change on the back of the verdict. Adidas said it disagreed with the decision of the Düsseldorf court, adding that it has yet to decide on the next steps but that it will continue to vigorously defend its rights.
The legal imbroglio around the sole started with a separate claim filed by Puma in Frankfurt in October 2013, focusing on design patents for ETPU midsoles. Puma says it registered six patents in July 2011 relating to the design of these soles, which have a styrofoam-like appearance. Its claim is that several of the Adidas ranges using Boost midsoles infringe on those patents.
Puma said it started working on ETPU soles with BASF in 2009 and made its first prototype of a shoe with such a sole in September 2010. A crucial aspect of this prototyping is that it required the development of a specific mold. But in March 2011, Puma said, it was informed by BASF that it should stop investing in ETPU development, because the chemicals firm was about to sign an exclusive deal for a similar technology with a competitor. This turned out to be Adidas.
Adidas said that it has been working on the development of its ETPU soles with BASF “in parallel” with Puma and it has various pieces of evidence to prove this.
Neil Narriman, head of intellectual property at Puma, who is also vice president of the Federation of the European Sporting Goods Industry, envisaged filing for a preliminary injunction based on alleged patent infringement immediately upon the launch of Boost footwear, in March 2013. However, Puma's management was then in some disarray, with the pending departure of Franz Koch, its chief executive. It was announced in December 2012 that Koch would be leaving the company in March 2013.
Narriman picked up the file again after the arrival of Bjørn Gulden, who formally started as chief executive in July 2013. A former executive at Adidas, and a former client of the company as an executive of Deichmann, the German shoe retailer, Gulden apparently telephoned several times to try and settle the matter with Adidas directly.
When this approach failed, Puma turned to the high court of Frankfurt. Puma's claim based on the design patents was denied in June 2015, on the grounds that the design of the Boost midsoles was dictated by the technology (Adidas therefore did not have any choice). Puma has appealed the decision and proceedings should start in October.
Puma interprets its win in Düsseldorf as a broader endorsement of its standpoint. The higher regional court “followed Puma's point of view and thus confirmed that Puma is the first sporting goods company which developed this sole technology,” Puma stated.
BASF declined to comment. Puma is eager to maintain a productive relationship with BASF, which remains its partner for projects such as Ignite footwear, a key development in the brand's turnaround plans.
The Boost technology has been an important growth driver for the Adidas brand. It sold 12 million pairs with Boost soles last year alone – most of them retailing comfortably above €100. Most of the shoes using Boost technology are in the running category, but Adidas has been broadening its use to basketball, tennis and other sports.
The case marks a return of legal animosity between Adidas and Puma. They were famously at loggerheads for several decades after their post-war launch by rival brothers in the small Franconian town of Herzogenaurach, but the relationship somewhat normalized once both sides of the family sold out. Incidentally, the general counsel at the Adidas group (and president of the World Federation of the Sporting Goods Industry) is Frank Dassler, son of Armin Dassler and grandson of Rudolf Dassler, who established Puma.
Tensions started to flare again when Adidas applied for a preliminary injunction against Puma in a court in Munich regarding its Bioweb shoes, in September 2013. These shoes use a special design in which the Puma “Formstripe” is split into three curves. The space between the three parts of the Formstripe is narrow and they take the usual curvy design of Puma's Formstripe, yet Adidas claimed that the design was too similar to its three stripes.
Puma, which describes the Bioweb design as merely a variation of the Formstripe, won in the first instance with a preliminary injunction in Munich in January 2014, but Adidas won the appeal in August that year. Puma then went on to file main court proceedings and won in the first instance in April 2015 but the Munich court decided yesterday (April 28) that Puma should not be allowed to sell its Bioweb shoes in the European Union.
Puma said that it would file an appeal at the German Supreme Court - although it initially has to file for such an appeal to be admissible. The company's stance is that the case is a matter of principle, to define the scope of protection of the Three Stripes against Puma's Formstripe in general, and to evaluate the protection of what it calls a “position trademark” such as the Three Stripes against the Bioweb version of the Formstripe.
Another move that has been irking Puma is that Adidas approached the local authorities in Herzogenaurach with objections to the planned enlargement of the Puma head office. Puma wants to construct a new building of 13,700 square meters intended for 500 office employees, across the street from its existing head office and brand center.
The Adidas Group, which then owned an adjacent plot with a residential area, complained as part of the consultation process that the building would form a nuisance for the neighborhood due to extra noise. It further claimed that the plans weren't well thought-out in terms of traffic, which could be a nuisance for the Adidas group on the same side of town. Adidas says that other parties intervened on the same grounds and that it would have raised the objection regardless of the builder's identity.
Puma's construction plans were cleared in February, but the objections were resented by some at the company as an absurd move. A representative of the local authorities said that the construction permit was published last week and that further objections are allowed to be raised in court for one month, provided the complainant is directly affected by the construction. Adidas says it has yet to decide on any further steps in this case. Puma is planning a ground-breaking ceremony in May.
The Adidas Group's fierce protection of its Three Stripes has been underlined by several cases in recent months. The latest is a federal lawsuit filed in the U.S. district court of Oregon against Ecco, the Danish footwear company, for alleged infringement through three and four-stripe designs on its shoes. Ecco says it has no interest in being confused with the Adidas brand but will respond more specifically if and when the complaint is served.
