K-Swiss (KSWS) Announces Details of Settlement Agreement with Payless ShoeSource

June 27, 2008 7:46 AM EDT

K-Swiss (Nasdaq: KSWS) today announced the settlement of alleged trademark and trade dress infringement, trademark dilution, unfair competition and breach of contract claims against Payless ShoeSource, a part of Collective Brands (NYSE: PSS). The Settlement Agreement provides for the following:

1. Payless agrees to refrain from making, advertising, promoting or selling footwear confusingly similar to that sold by the Company, including footwear that bears the Company’s trademark or trade dress (these restrictions will be incorporated in a consent decree and permanent injunction the parties have agreed to file with the Court)
   
2. for the period beginning June 24, 2008 through December 31, 2008, Payless may sell-off existing inventory that is the subject of the Company’s claims
   
3. Payless will pay to the Company $30 million in cash on or before July 1, 2008 in payment of compensatory damages claimed by the Company from Payless’ advertising, promotion and sale of certain footwear
   
4. mutual releases between the parties regarding certain claims, and
   
5. certain other provisions customarily contained in similar agreements, including that neither party admits liability to the other.

K-Swiss, Inc., together with its subsidiaries, engages in the design, development, and marketing of athletic footwear for sports use, fitness activities, and casual wear.

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