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Herbalife Ventures into the World of Sports. Adidas Cries "Foul!"

PORTLAND, June 12, 2009 -- Herbal Life fields a federal lawsuit brought by Adidas after Herbal Life ventures into the world of athletics.

Athletics giant Adidas launched a legal fight today in the U.S. District Court for the Distirct of Oregon against Herbalife International Inc. after Herbalife expanded its marketing efforts into the sports arena. The parties apparently have a history together.

Adidas claims to have adopted their Trefoil trademark at least as early as 1972 in connection with athletic products, such as shoes, clothing and equipment. Since that time adidas has maintained a consistent global presence in the field of sports.

Herbalife allegedly adopted a three-leaf logo design referred to as the Tri-Leaf Mark sometime after 1972 in connection with nutritional supplements and other health-related products.

In the mid-1990s, Herbalife attempted to register its Tri-Leaf Mark in a number of jurisdictions around the world, which Adidas opposed because of the similarities between the Tri-Leaf logo and the Trefoil trademark. The parties then reached an agreement whereby Adidas would withdraw its opposition under the following conditions: (A) Herbalife will not use and register its Tri-Leaf trademark on footwear, sports apparel, sports accessories or equipment; (B) Herbalife will use the Tri-Leaf mark in combination and in close proximity with the word "HERBALIFE"; and (C) and the parties avoid any activity which might be likely to lead to confusion between their respective marks.

The respective trademarks appear as follows:

After entering the aforementioned agreement, Adidas accuses Herbalife of engaging in sponrships of sports teams and individual athletes in addition to using the Tri-Leaf Mark directly on such items as sports apparel, sports accessories and./or equipment.

As part of this expansion of use of the Tri-Leaf Mark in connection with sports, on or about August I8, 2007, Defendant registered the domain name herbalifesports.com, and began actively promoting the Tri-Leaf Mark in connection with a wide range of sports and athletic activities featuring the Tri-Leaf Mark on a wide range of sports apparel, sports accessories and/or equipment.

Counts based on breach of contract, trademark infringement, trademark dilution, injury to business reputation, unfair competition, and deceptive trade practices appear in the complaint.

The primary purpose of trademark infringement laws is to prevent consumer confusion regarding the source of goods and services. The first party to use a trademark may prohibit other parties from using a mark subsequently in connection with similar goods or services if it so resembles the original mark as to cause confusion. The trademarks do not have to identical, but similar enough that it is likely to cause confusion. If the later mark is so similar, it is deemed to infringe on the prior mark.

Adidas owns a number of registered trademarks, including the Trefoil trademark, in the United States and throughout the world. Adidas also argues the Trefoil trademark is a famous mark.

In assessing damages of a federally registered trademark, the court may enter judgment for any sum above the amount found as actual damages, up to three times. When a court finds a defendant intentionally counterfeited a registered trademark, the court must, unless the court finds extenuating circumstances, enter judgment for three times such profits or damages, whichever is greater, together with a reasonable attorney’s fee unless the Plaintiff elects for statutory damages up to $1,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed.

In addition to alleging trademark infringement, Adidas has pled a claim of trademark dilution. The primary purpose of trademark infringement laws is protect consumers, even though the owner of the trademark receives any monetary judgment awarded. Trademark dilution laws protect the property interest in a trademark with its "uniqueness" and the good will associated therein.