Market Overview

SKECHERS Scores Major Victories in Patent Dispute with adidas


(NYSE:SKX), a global lifestyle and performance footwear
brand, today announced that in two separate rulings the United States
District Court for the District of Oregon denied adidas' motion for a
preliminary injunction seeking to prevent Skechers from selling its
Mega-Blade series of children's shoes, and dismissed adidas' claim
against Skechers for willful infringement of two patents allegedly
covering adidas' Springblade shoes.

In July 2016, adidas sued Skechers in U.S. District Court of Oregon
alleging that Skechers' Mega-Blade series of children's shoes infringed
two separate adidas patents covering the "leaf spring" sole for its
Springblade shoe style. adidas' complaint also alleged that Skechers
intentionally and willfully infringed both patents and sought enhanced
damages. adidas also moved for a preliminary injunction that same month
seeking to prohibit Skechers, among other things, from selling the
Mega-Blade shoes.

In denying adidas' motion for a preliminary injunction, the Court found
that adidas was unable to show that it is likely to win the case at
trial, referring to a ruling in a related proceeding before the U.S.
Patent Trial and Appeal Board ("PTAB") where Skechers produced evidence
that adidas' patents were invalid and convinced the PTAB to institute an
inter partes review of the patents. The Court stated that adidas
"cannot, at this time, show a likelihood of success on the merits"
because "81 percent of [PTAB review proceedings] result in invalidation
of at least some of the challenged claims, and 65 percent invalidated
all of the challenged claims."

adidas also argued that the sale of the Mega-Blade shoes causes adidas
irreparable harm by having an adverse effect on the reputation, sales,
pricing and market share of the adidas Springblade model. The Court
disagreed with adidas, citing the complete absence of any evidence and
stating, that "adidas' evidence of irreparable injury is too conclusory
and speculative to meet adidas' burden for a preliminary injunction."

In a separate ruling the same day, the Court dismissed adidas' claim for
willful and intentional infringement against Skechers, stating that
adidas failed to plead any "facts from which the Court may draw the
reasonable inference that [Skechers] knew of the patents-in-suit either
when they issued or any time before [adidas] filed this lawsuit. Thus,
[adidas'] allegations are insufficient to state a claim for willful
infringement based on [Skechers' conduct] before the lawsuit was filed."

"The Court's ruling inherently recognizes the weak and speculative
nature of adidas' allegations against Skechers," stated Michael
Greenberg, president of Skechers. "As owners of a vast worldwide
portfolio of trademarks, patents and copyrights, Skechers respects the
intellectual property rights of other companies and has invested
tremendous resources into building a brand identity by developing its
own distinctive designs, not by copying others. We are pleased with both
of the Court's rulings."

Skechers is represented in the matter by Daniel Petrocelli, Mark
Samuels, Jeffrey Barker and Brian Berliner of O'Melveny & Myers LLP.

About Skechers USA, Inc.

Skechers USA, Inc., based in Manhattan Beach, California, designs,
develops and markets a diverse range of lifestyle footwear for men,
women and children, as well as performance footwear for men and women.
Skechers footwear is available in the United States and over 160
countries and territories worldwide via department and specialty stores,
more than 2,055 Skechers Company-owned and third-party-owned retail
stores, and the Company's e-commerce websites. The Company manages its
international business through a network of global distributors, joint
venture partners in Asia and the Middle East, and wholly-owned
subsidiaries in Canada, Japan, throughout Europe and Latin America. For
more information, please visit and follow us on Facebook
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This announcement contains forward-looking statements that are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include,
without limitation, the Company's future domestic and international
growth, financial results and operations including expected net sales
and earnings, its development of new products, future demand for its
products, its planned domestic and international expansion, opening of
new stores and additional expenditures, and advertising and marketing
initiatives. Forward-looking statements can be identified by the use of
forward-looking language such as "believe," "anticipate," "expect,"
"estimate," "intend," "plan," "project," "will be," "will continue,"
"will result," "could," "may," "might," or any variations of such words
with similar meanings. Any such statements are subject to risks and
uncertainties that could cause actual results to differ materially from
those projected in forward-looking statements. Factors that might cause
or contribute to such differences include international economic,
political and market conditions including the uncertainty of sustained
recovery in Europe; sustaining, managing and forecasting costs and
proper inventory levels; losing any significant customers; decreased
demand by industry retailers and cancellation of order commitments due
to the lack of popularity of particular designs and/or categories of
products; maintaining brand image and intense competition among sellers
of footwear for consumers, especially in the highly competitive
performance footwear market; anticipating, identifying, interpreting or
forecasting changes in fashion trends, consumer demand for the products
and the various market factors described above; sales levels during the
spring, back-to-school and holiday selling seasons; and other factors
referenced or incorporated by reference in the Company's annual report
on Form 10-K for the year ended December 31, 2016 and its quarterly
report on Form 10-Q for the three months ended March 31, 2017. The risks
included here are not exhaustive. The Company operates in a very
competitive and rapidly changing environment. New risks emerge from time
to time and the companies cannot predict all such risk factors, nor can
the companies assess the impact of all such risk factors on their
respective businesses or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Given these risks and
uncertainties, you should not place undue reliance on forward-looking
statements as a prediction of actual results. Moreover, reported results
should not be considered an indication of future performance.

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