This is an easy goober question for any Law-Minded humans:
Nike is suing Sketchers for making their shoes look identical, citing design patent infringement. Given that Samsung copied Apple (for one example) and gets to keep on doing it, I’m guessing this is no big deal.
But what happens if the courts rule in Nike’s favor? Would that also be a non-event?
So to those invested in SKX: how big a deal is this in your investing mind’s eye? Or will Sketchers be fine one way or another, at least as far as the law goes?
Thanks in advance for calming my Monkey Mind,
Monkey
Long SKX
Nike is suing Sketchers for making their shoes look identical, citing design patent infringement…I’m guessing this is no big deal…But what happens if the courts rule in Nike’s favor?
Hi Monkey,
I don’t think you have to worry too much. The judge just threw out another Nike lawsuit against Skechers two months ago. Maybe Nike is starting to get worried about Skechers.
Saul
SKECHERS Wins Favorable Ruling in Nike Lawsuit
The Chief Administrative Law Judge of the International Trade Commission Ruled that Skechers’ Famous Twinkle Toes and BOBS Product Lines Do Not Infringe Converse’s Chuck Taylor Design
MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–Nov. 19, 2015-- SKECHERS USA, Inc. (NYSE:SKX), a global footwear leader and the second largest athletic footwear brand in the United States, today announced that it has won an important ruling over Nike, Inc.’s wholly-owned subsidiary Converse Inc. relating to the Converse Chuck Taylor shoe.
In October 2014, Converse sued Skechers in federal district court and before the International Trade Commission (“ITC”) alleging that the Company’s famous Twinkle Toes and BOBS product lines infringed its Chuck Taylor midsole common law and registered trademarks. The case went to trial before the ITC in August 2015.
In a November 17, 2015 opinion, the Chief Administrative Law Judge of the ITC, the Honorable Charles E. Bullock, ruled that Skechers’ Twinkle Toes and BOBS product lines do not infringe Converse’s registered trademark for the Chuck Taylor midsole. In making his ruling, the Judge noted that both of the Skechers product lines feature prominent branding and that the Twinkle Toes line contains design features that “create enough differences that the shoes bearing them cannot be said to be similar to [the Chuck Taylor].” The Judge also stated that the survey evidence concluded that there was no likelihood that consumers would confuse the Skechers designs with those of Converse’s Chuck Taylor designs.
6 Likes
Samsung was ordered to pay hundreds of millions of dollars [original trial had it at more than a billion], so yes, I think it is potentially worrisome.
I’d look at the patent and then the design of Sketchers and see whether it is really all that similar.
Samsung was ordered to pay hundreds of millions of dollars [original trial had it at more than a billion], so yes, I think it is potentially worrisome.
Hi Rbuckyfuller,
I’m no patent lawyer but Samsung has over $150 billion in Revenue, so this was a slap on the wrist for them, maybe one three-hundreth of one years revenue, and a tiny, tiny fraction of the revenue they got by copying Apple’s design. Skechers’ revenues are a fiftieth of Samsungs, and their chances of being fined hundreds of millions of dollars are way, WAY LESS THAN ZERO! A comparable fine for them (1/300 of their annual revenue) would be about $10 million out of revenue of $3 billion. Remember that Skechers has hundreds of lines of shoes that aren’t being accused of copying anything.
Saul
8 Likes
Earlier today,opened a position with SKX.
Frank 
Earlier today,opened a position with SKX.
You must have bought a lot, it is the only company up in my portfolio up today!
Thanks,
Brian
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Yeah, thanks that must have done the trick!
wish I had some cash, the goat ate it all!
Saul
Although I may come to a similar conclusion to you on the issue, your logic is a bit off.
Pedantically, the chances of anything are never less than zero. The chances of a case being heard, judgement being made and sticking may be small, but it is a quantifiable positive probability.
More significantly, in cases centered on Intellectual Property, it is the (lost) revenue of the infringed party that is relevant for assessing damages, not that of the thieving bastards who pirated something.
Cham
3 Likes
Pedantically, the chances of anything are never less than zero. The chances of a case being heard, judgement being made and sticking may be small, but it is a quantifiable positive probability.
Hi cham, I know. I was just over-emphasizing an obvious point.
Saul