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The recent decision of the General Court regarding adidas’ Three Stripe EU Trade Mark (T‑307/17)

What is it about?

This decision concerns two points: first, an attempt by adidas to push the boundaries of how a trade mark should be defined; and second, the pitfalls of submitting inadequate evidence set against the European Union Intellectual Property Office (EUIPO)’s rigorous standards.

Background

  • adidas registered the mark shown below as a European Union Trade Mark (EUTM) for clothing, footwear and headgear in May 2014.

EUTM No. 012442166

 

Description: The mark consists of three parallel equidistant stripes of equal width applied to the product in whichever direction.

  • In June 2016 a competitor, Shoe Branding Europe BVBA, successfully argued before the Cancellation Division of the EUIPO that the registration was invalid on the basis that the mark was devoid of distinctive character, whether inherent or acquired through use.
  • adidas did not contest the decision in relation to inherent distinctiveness, but appealed against the finding of no acquired distinctiveness.
  • The EUPIO’s Second Board of Appeal rejected the appeal, finding that adidas had failed to establish that the mark had acquired distinctive character through use throughout the EU. In particular, the Board criticised the evidence of use presented by Adidas on the basis that the vast majority of it related not to the mark at issue, but to other signs that differed significantly.
  • adidas appealed to the General Court, objecting to the Board’s assessment of the evidence of use that it had put forward.

The appeal

adidas argued that the Board had wrongly dismissed the majority of its evidence on the basis that it did not relate to the registered mark, due to a misinterpretation of what the mark actually is. It asserted that the mark represents a ‘surface pattern’ that may be reproduced in different dimensions and proportions depending on the goods to which it is applied. This was rejected by the Court, which held that it was incumbent on Adidas to file a graphic representation of the mark corresponding precisely to the subject matter of the protection that it wished to secure, and that nothing in the graphic representation of the mark at issue or its description indicates that it is ‘composed of a series of regularly repetitive elements’.  Accordingly, the mark was held to be an ‘ordinary figurative mark’, registered in the proportions shown in the graphic representation, and without any suggestion that the length of the stripes could be modified or the stripes be cut at a slanted angle.

adidas also asserted that the Board had misapplied the ‘law of permissible variations’, to the effect that it was permissible for a trade mark proprietor to rely on altered versions of the mark at issue in order to suit its marketing campaigns and the like, so long as the changes did not alter the distinctive character of the mark at issue. Again, this was rejected by the Court, which held that ‘as the mark is simple, even slight differences could lead to a significant alteration to the characteristics of the mark as it had been registered’. It followed from this that the changes to the colour scheme, the alternation of the thickness and length of the stripes, and the way those stripes were cut significantly affected several characteristics of the mark at issue such that much of the evidence filed by adidas in this order was disregarded. Examples of evidence that fell into this category are set out below:

A particular point of interest was that the reversal of the colour scheme – to show white/light stripes against a black/dark background, rather than the black on white of the registered mark – was held by the Board to be a significant variation that could not justify taking such examples into account as evidence of use of the registered mark. In reaching that conclusion, the Board took account of the extreme simplicity of the registered mark, which made such a colour reversal noticeable. Similarly, the Board rejected the suggestion that images showing two (rather than three) black stripes against a white background, or sloping (rather than vertical) stripes were unhelpful in establishing acquired distinctiveness of the registered mark.

adidas also ran a ‘catch-all’ argument to the effect that the entirety of the evidence submitted should have been assessed globally, regardless of the colour, length or angle of the stripes shown. This was rejected by the Court, largely due to the amount of evidence that was dismissed for not showing use of the registered mark, which meant that it was impossible to establish a link between the marketing and turnover figures that were submitted and the mark. Further, of 22 market surveys submitted, only five (in five individual EU member states) had been conducted by reference to an image of the mark at issue, while the other 18 related to other marks. And even the five potentially relevant surveys had been undermined by an initial leading question designed to make the interviewee think of sports activities. Ultimately the relevant evidence was insufficient to prove that mark at issue had acquired distinctiveness throughout the EU.

Conclusion

This decision serves as a reminder to brand owners that, no matter how successful a brand is, evidence in registry proceedings must demonstrate it. The EUIPO has shown itself to be tightening its practice and taking a harsher stance on big brands in this regard over the past decade, with a recent example of McDonald’s losing a key registration through inadequate evidence.

It also highlights the importance of broadening trade mark protection to suit the needs of an evolving brand, particularly in the case of ‘simple’ device marks and/or stylised brand names.

While this decision may be regarded as a setback to adidas’ brand protection armoury, it does not spell the end of the adidas three stripe trade mark. adidas has several other registrations which will not be affected by this decision, such as those shown below:

EUTM No. 003517612

 

EUTM No. 003517588

EUTM No. 004269072

EUTM No. 003517661

 

EUTM No. 003517646

In any event, the invalidation of a trade mark does not preclude its use: adidas can continue to use its three-stripe trade mark in different shades, angles, shapes and sizes and will acquire unregistered trade mark rights against third parties as it does so.