SKECHERS Wins Major Victory in Asics Lawsuit

Apr 30, 2007 • 6:20 pm EDT

U.S. District Court Denies Asics' Motion for a Preliminary Injunction Against Skechers Court Finds "Substantial" Differences Between Asics Trademark and Skechers Designs


SKECHERS USA, Inc. (NYSE:SKX), a global leader in lifestyle footwear, announced today that it won a major victory in a trademark lawsuit filed against Skechers by Asics Corporation and Asics America Corporation (collectively "Asics"). The U.S. District Court for the Central District of California denied Asics' motion for a preliminary injunction against Skechers, expressly finding that there are "substantial" differences between Asics' trademark and Skechers' stripe designs.

Asics sued the company for trademark infringement, unfair competition, trademark dilution and false advertising, claiming that the stripe design on four Skechers shoe styles infringes Asics' stripe trademark. Asics sought a preliminary injunction against Skechers to prevent Skechers from making and selling the four shoe styles. After hearing oral argument, the court denied Asics' motion. In a 21-page opinion dated April 25, 2007, the court found that Asics had not shown that it is likely to succeed in its trademark infringement case against Skechers. The District Court's opinion states: "the designs are quite different and in the marketplace the shoes appear highly dissimilar." The court also found that the Asics trademark and Skechers stripes were not similar enough to infer that Skechers copied its designs from Asics.

"We feel vindicated by the court's opinion that there are 'substantial' differences between the Skechers stripe designs and the Asics' trademark," stated Philip G. Paccione, General Counsel of Skechers. "As we have said all along, the Asics suit is nothing more than an attempt to monopolize the use of common design elements, undermine legitimate competition and intimidate retailers. Skechers is hip, cutting edge and original in its shoe designs, and does not attempt to trade on the brand image and identity of any company other than Skechers."

The District Court also declined to grant Asics injunctive relief on its trade dress infringement claim, which was limited to one of the four Skechers styles in issue, the Skechers Showdowns. The court found that there was no evidence of actual confusion or that Skechers had intentionally copied Asics' design.

Paccione continued, "In light of this resounding victory, Skechers has decided to focus its resources on bringing this infringement case to a successful and prompt conclusion, and will consider recourse for Asics' anti-competitive and other wrongful conduct at a later date."

Skechers was represented in the matter by Marshall Lerner, Brad Mattes and Philip Nulud of Kleinberg & Lerner of Los Angeles, California.

SKECHERS USA, Inc., based in Manhattan Beach, California, designs, develops and markets a diverse range of footwear for men, women and children under the SKECHERS name, as well as 10 uniquely branded names. SKECHERS footwear is available in the United States via department and specialty stores, Company-owned SKECHERS retail stores and its e-commerce website, as well as in over 100 countries and territories through the Company's global network of distributors and Canadian and European subsidiaries. Please visit or call the Company's information line at 877-INFO-SKX.

This announcement may contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or simply state future results, performance or achievements of the Company, and 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 the Company's actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include international, national and local general economic, political and market conditions; intense competition among sellers of footwear for consumers; changes in fashion trends and consumer demands; popularity of particular designs and categories of products; the level of sales during the spring, back-to-school and holiday selling seasons; the ability to anticipate, identify, interpret or forecast changes in fashion trends, consumer demand for our products and the various market factors described above; the ability of the Company to maintain its brand image; the ability to sustain, manage and forecast the Company's growth and inventories; the ability to secure and protect trademarks, patents and other intellectual property; the loss of any significant customers, decreased demand by industry retailers and cancellation of order commitments; potential disruptions in manufacturing related to overseas sourcing and concentration of production in China, including, without limitation, difficulties associated with political instability in China, the occurrence of a natural disaster or outbreak of a pandemic disease in China, or electrical shortages, labor shortages or work stoppages that may lead to higher production costs and/or production delays; changes in monetary controls and valuations of the Yuan by the Chinese government; increased costs of freight and transportation to meet delivery deadlines; violation of labor or other laws by our independent contract manufacturers, suppliers or licensees; potential imposition of additional duties, tariffs or other trade restrictions; business disruptions resulting from natural disasters such as an earthquake due to the location of the Company's domestic warehouse, headquarters and a substantial number of retail stores in California; changes in business strategy or development plans; the ability to attract and retain qualified personnel; the disruption, expense and potential liability associated with existing or unanticipated future litigation; and other factors referenced or incorporated by reference in the Company's annual report on Form 10-K for the year ended December 31, 2006. The risks included here are not exhaustive. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time and we cannot predict all such risk factors, nor can we assess the impact of all such risk factors on our business 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 the Company's future performance.

Source: SKECHERS USA, Inc.