3 stripes and you’re out!

Our trainee solicitor, Tara Swaminathan, takes a look at why Adidas failed to obtain trademark protection.

In the case of adidas AG (“Adidas”) v the European Union Intellectual Property Office (“EUPIO”), the General Court of the EU rejected Adidas’s case and upheld the decision made by the EUPIO in 2016, against the registration of Adidas’ mark.

Background

Alongside Nike, Adidas has dominated global sports clothing and footwear industry, which is worth more than $16.7 billion, for more than 6 decades. A three-stripe logo was first registered by Adidas’ founder, Adolf “Adi” Dassler, on a football boot on 18 August 1949. In 2014, the EUIPO registered three parallel white stripes on a black background for use in clothing, footwear and headgear. However, following an application filed by a Belgian shoemaker in 2016 for a declaration of invalidity, the EUIPO annulled Adidas’ previous registration of the mark.

EUPIO considered that the motif was devoid of any ‘distinctive’ character, either inherently by its design or through acquired use. This was a landmark decision at the time, leaving Adidas exposed to the potential for competitors to freely use the same or similar three-stripe design on their goods.

Current Ruling

The Court’s ruling applies to all 28 member states and to the three-striped mark in any direction.

Despite the mark being adorned on the boots and kits of many of world’s most successful sports teams and stars, the Court concluded that the three-striped mark was an ‘ordinary figurative mark’ and therefore did not warrant legal protection in the form of a registered trademark.

It is yet another blow to the company that has earned a reputation for stringently enforcing its intellectual property rights. It has previously sued a number of brands including, Thom Browne, Skechers, and Marc Jacobs for their use of the three-striped design.

Implications of the Judgment

Whilst the decision has resulted in an immediate 1.8% drop in Adidas’ share price it is unlikely to impede upon the company’s reputation or its trademark portfolio. As one would expect, Adidas is insisting that “This ruling is limited to this particular execution of the three-stripe mark and does not impact on the broad scope of protection that Adidas has on its well-known three-stripe mark in various forms in Europe”. The decision applies to a specific variant of the mark for use in clothing, footwear and headgear in the EU – such as three continuous lines going around a sock or down a pair of tracksuit bottoms. Adidas’s famous mark – the three black lines of equal width slanting from left to right against a white background – continues to benefit from protection against trademark infringement in the EU.

However, the decision sends a clear warning to businesses. Any business that wishes to register a trademark for use in the EU, regardless of how well-established it is, should have the requirement to be ‘distinctive’ at the forefront of its mind. For sports merchandise and branding, the Court’s ruling is arguably another burden for these brands, who already have to prove their distinctiveness to justify the premium pricing attached to their products.

The company has not yet confirmed whether it will appeal this decision. If it does, the appeal will be limited to the points of law only and would most likely rest on whether Adidas can prove that the General Court of the EU fundamentally erred in its legal analysis of the three-striped mark.

We will be waiting to see what the sports brand’s next moves are – legally and commercially – and will provide an update on any future developments.

Capital Law has significant expertise in trademark applications and infringement cases, please contact Wayne Beynon for further details.