Adidas three stripes trade mark is knocked out of court

In the era of athleisure fashion, sportswear branding is a highly valuable asset. Sportswear companies commonly use a themed type of branding, rather than an exactly identical mark, applied in inventive ways across their product portfolios. While that works well as a customer engagement tool, it is dangerous from a trade mark perspective. Trade mark protection relies on clearly defined boundaries around the registered word or logo. This is understandable – allowing broad and flexible brand protection for one producer cuts down the freedom of movement for others. But brand-owners should take care that their embrace of modern branding practices does not undermine protection of their trade mark assets.

Last week brought bad news for sportswear brand Adidas. Its EU-wide Community Trade Mark registration for three parallel stripes:

was rejected again, this time by the EU General Court. (You can see the ruling here.) We consider why.

Relying on market recognition

Adidas had already accepted defeat on whether the trade mark was inherently distinctive, focusing its arguments on distinctiveness acquired through use of the trade mark in the market.

Briefly, inherent distinctiveness is when the chosen word, image etc is able on its own to act as a link between branded products and a particular source without the need to rely on existing presence in the market. The three stripes on their own were not enough to jump that hurdle.

Failing that, Adidas needed to show that market recognition developed over time had reached the point where people across the EU would know that the branding linked back to Adidas. But this brought with it the challenge of proving that the trade mark as registered had become distinctive of the company for consumers in all 28 EU countries.

A mountain of evidence was not enough

Adidas had submitted a huge quantity of evidence including:

• images of its three stripes marking across a range of clothing, bags etc,
• survey evidence linking the three stripes with Adidas as a producer of sportswear and related products, and
• information about its annual spend on marketing.

This did not get them over the line. Why?

The main problem was the court's view of how close the various uses were to the mark as registered. Differences in colour (white on black rather than black on white), dimensions, whether the stripes were vertical or slanted, cut-off at a slanted angle, were all seen as differences going beyond “insignificant variations”. Given the simplicity of the registered mark, changes like these very easily became “significant”. As the EU court explained:

the simpler the mark, the less likely it is to have a distinctive character and the more likely it is for an alteration to that mark to affect one of its essential characteristics and the perception of that mark by the relevant public

Much of the imagery filed in support of the brand family in use was dismissed out of hand as too far removed from the registered image to be helpful.

The information submitted about marketing spend could have been helpful, but it was not broken down sufficiently to show investment in the narrow form of the brand, or the brand as used on sportswear as opposed to other goods.

The third category of evidence used was extensive market survey evidence in ten countries. This is expensive and time-consuming to collect and so it is really important to make sure that it is carefully planned in advance. Here, there were flaws in the survey evidence in terms of the questions asked and the branding shown to participants. Most of it was disregarded.

Showing distinctive character across the whole EU

EU-wide registered trade marks offer the great advantage of equal protection across all 28 member states. But when a brand-owner relies on proving distinctiveness through use, they will have the uphill struggle of establishing distinctiveness in all countries. This does not necessarily mean separate survey evidence in every country. But other evidence will be needed to show, for example, that a group of countries comprise a single distribution network and are treated as if they were a single national market. Another approach is to demonstrate that geographic, cultural or linguistic closeness means that consumers in one country are sufficiently familiar with the market of another to be treated as one.

Take away points

This ruling makes depressing reading for owners of modern, flexible brands, who use a stable of related forms of branding across a wide range of products in ways adapted to suit the style and colour scheme of the product in question. The right approach may now be to file numerous different applications each protecting a narrower range of usage styles. 

Very simple logo branding looks vulnerable. Although proving distinctiveness through use remains an option, brand-owners would do well to stick closely to one style and avoid introducing too much variation.

Finally, where defence of the trade mark through litigation becomes necessary, a careful review of this ruling will help brand-owners to build an effective case and avoid some of the pitfalls that the court identifies.