Chinese Companies to Compensate Adidas for Unfair Competition

Adidas-Salamon AG recently won a suit for unfair competition in China against two Chinese footwear manufacturing companies. The two companies sold shoes under license from "American Adidas International Group Co. Ltd." American Adidas, however, was not the famous German sports goods manufacturer, but rather a company, registered in the United States, by an individual not party to the suit.

Under the license from American Adidas, Shanghai Andao Sports Goods Company and Andao Shoes Company sold shoes with the words "Authorized by American Adidas International Group Co. Ltd" printed on the product packaging. Retailers reselling the companies' shoes were requested to use the terms "American Adidas" in advertising the footwear.

While one of the resellers reached a settlement with Adidas-Salamon AG, the two manufacturers proceeded to trial. The Hunan Higher People's Court found for Adidas, enjoining the manufacturers from further using the Adidas mark, and requiring them to pay damages of US$35,000 for losses resulting from unfair competition.