Skechers USA Inc. Tuesday said it filed a lawsuit against Sears Holdings Corp., alleging the retailer sells footwear that infringes some of the shoe company’s products.
The footwear design and marketing firm alleged Sears sells products at its namesake and Kmart retail stores that infringe Sketcher’s Shape-ups, Twinkle Toes and Z-Strap product lines. Skechers is the market leader in theĀ toning segment — shoes that promise to burn calories and firm muscles.
The suit, filed in a California District Court, seeks compensatory and punitive damages, as well as an injunction for infringing Skechers’ patents, trademark, and trade dress rights. Skechers’ suit further alleges Sears sells the infringed products at its retail stores and online under the TheraShoe, Melrose Avenue, Paris Blues and Athletech labels.
A Sears spokeswoman wasn’t immediately available to comment on the litigation.
“We have obtained more than 150 patents and trademarks on these lines, and we built them into brand names universally recognized around the world as synonymous with Skechers,” said Philip Paccione, general counsel of Skechers.
Sears and Kmart sell Skechers’ shoes. Paccione said that while the company valued its relationship with Sears, it couldn’t allow the retailer to “infringe on our most valuable intellectual property.”
The suit comes as investors have expressed concern about slowing momentum in the profitable segment.
Firms have fretted over an anticipated bloated inventory, while Skechers is also facing competition in the toning category from Ross Stores Inc. and others. Last month, Skechers reported its fourth-quarter profit slid 88 percent on lower margins as it continues to aggressively work through its inventory position, resulting in a weaker-than-expected bottom line.
Shares of Skechers were up 2.2 percent, at $20.15, while Sears’ stock rose 2.4 percent, to $85.20. Both gains come amid a broad market rally.
Sears. Life misspent.