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Why Hanes Sued Keds Over ‘Champion’ Trademark

Hanesbrands Inc. is filing a lawsuit against Keds in Massachusetts federal court, claiming that the footwear company infringed on its trademark and breached a licensing agreement between the two companies for Champion-branded shoes. Hanesbrands, which has owned the Champion brand since 2006, shares the company’s trademark with Keds in the U.S., Puerto Rico and Canada under a decades-old licensing agreement first reached in 1987.

Hanes adds that the two parties agreed to an amendment allowing for a renegotiation of the deal in 2018, after Keds began marketing its Champion shoes in countries where Hanes had trademark priority. But Hanes believes Keds has breached the amendment.

“Keds has failed to engage in the promised renegotiation of the license agreement,” Hanesbrands wrote in court documents. “Indeed, Keds has flatly refused to renegotiate, all the while continuing its improper ‘historic uses’ of the Champion trademark around the world and engaging in additional, unauthorized uses of that mark.”

Under the terms of the initial deal, Keds could market “casual street and play time shoes” in the U.S., Canada and Mexico using the Champion trademark, while Champion had permission to use the mark on athletic shoes.

Hanes is seeking causes of action for trademark infringement/dilution, breach of contract, unfair competition and false association, unfair and deceptive trade practices and breach of implied covenant of good faith and fair dealing.

Trademark issues among apparel and footwear brands and the surrounding litigation have become increasingly commonplace in recent years. In May, streetwear brand Supreme won a lawsuit against similarly named counterfeiting operation Supreme Italia. The copycat brand, owned by private British company International Brand Firm Limited, had long been imitating Supreme’s iconic products and branding, and even opened a fake flagship store in Shanghai last year.

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In February, Brooks Sports Inc., also known as the Brooks Running Company, filed a lawsuit against Brooks Brothers, alleging that the American heritage clothier infringed upon its established brand trademarks, including the ownership of marketing rights for the word “Brooks.”

And in 2019, premium denim brand Diesel cracked down on counterfeiting when it seized thousands of copycat jeans in a global raid. The brand found 1,244 websites promoting the sale of the counterfeit items, 2,838 cases of copyright and trademark infringements and 4,901 fake advertisements falsely related to the brand.

Hanesbrands’ suit against Keds comes only a few weeks before new CEO Stephen B. Bratspies is set to assume the position effective Aug. 3. Bratspies, who most recently served as the chief merchandising officer of Walmart, will succeed Gerald W. Evans Jr., who previously announced his plans to retire after a 37-year career at Hanesbrands.

Evans will oversee the leadership transition until August and remain as an advisor to the company through 2021.

Champion has been a big brand for Hanes in one way or another, with the company entering an exclusive agreement with Amazon Fashion to sell its C9 Champion performance athleticwear. C9 Champion, the value-priced product line of Champion, has more than 100 styles of men’s, women’s and children’s activewear, innerwear and accessories available on Amazon’s online store.

The C9 Champion product line already complements the existing mainline Champion authentic sport-inspired apparel available in the Amazon Fashion store, with both Champion and C9 Champion, having branded storefronts.

The global Champion brand, excluding C9, generated more than $1.9 billion of revenue in 2019, an increase of more than $1.1 billion in just three years, according to Evans in a fourth-quarter analyst call.

Keds, a division of Wolverine World Wide, Inc., has recently partnered with brands such as Kate Spade New York and Rifle Paper Co. to offer an update on the Keds Champion low-cut canvas sneaker. In May, the brand named Bornie Del Priore global brand president. Del Priore has more than two decades of global footwear industry experience and also serves as global brand president of the Wolverine Worldwide Kids Group.