Collective Brands to Pay Rival $30M Settlement

Topeka, Kan. Collective Brands Inc., which operates the Payless ShoeSource and Stride-Rite shoe store chains, said Friday it has agreed to pay footwear rival K-Swiss $30 million to settle litigation claiming trademark infringement.

In a securities filing, Collective Brands said it was not admitting any wrongdoing but that it will agree to a permanent injunction promising to "refrain from making, advertising, promoting or selling footwear confusingly similar to that sold by K-Swiss."

However, the company said it had until the end of the year to sell its remaining inventory of shoes subject to the K-Swiss lawsuit.

K-Swiss Inc. designs, develops and markets shoes for casual wear and fitness activities.

Collective Brands said it will take a $30 million charge in the second quarter, but said it expected some of the settlement to be eventually covered through insurance.

This was the second big trademark case to go against Collective Brands this year, according to the report. Last month, a federal jury in Oregon ordered Collective Brands to pay $305 million in damages to Adidas AG.

Collective Brands has asked the court to throw out or reduce the award, saying it is unreasonable.