May 12 (Bloomberg) -- Collective Brands Inc., owner of the Payless ShoeSource and Stride Rite chains, said it will ask a judge to overturn or reduce a $304.6 million jury verdict in Adidas AG's trademark lawsuit over striped sneakers.

The company will file papers today asking U.S. District Judge Garr King in Portland, Oregon, to reverse the award or order a new trial in the 7-year-old infringement case, Chief Executive Officer Matthew Rubel said in a letter to shareholders.

Adidas, the world's second-biggest sporting-goods maker, sued Topeka, Kansas-based Collective in 2001, accusing the retailer of copying its three-stripe motif by using shoe designs with sets of two and four stripes. Adidas has filed similar suits against other shoemakers in the U.S. and Europe.

The damage award ``exceeds by 15 times our profits on the sale of these shoes and, if not overturned, would permit Adidas to claim exclusive control over all shoes with two, three or four parallel stripes,'' Rubel said.

The jury on May 5 awarded Adidas $30.6 million in actual damages, plus $137 million in punitive damages and $137 million of Payless profit. The award is more than seven times Collective's profit last year of $42.7 million.

For Adidas, based in Herzogenaurach, Germany, the award was its biggest victory in a long-running legal campaign to block retailers from using various striped patterns on shoes and athletic apparel. Adidas began using its trademarked three-stripe pattern on shoes more than 50 years ago.

Collective climbed the most in five months after it said first-quarter profit exceeded analysts' estimates, gaining $1.74, or 17 percent, to $11.82 at 4:15 p.m. in New York Stock Exchange composite trading. The stock has dropped 32 percent this year.

Andrea Corso, spokeswoman for Adidas's Portland-based North American headquarters, didn't return calls for comment.

The case is Adidas America Inc. v. Payless ShoeSource Inc., 3:01-cv-01655, U.S. District Court, District of Oregon (Portland).

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net.

Last Updated: May 12, 2008 16:27 EDT