Three stripes and you’re out

The General Court of the European Union has, this week, upheld the EUIPO’s decision to cancel one of Adidas’s key EU trade mark registrations for its iconic three-stripe design:

The decision to cancel the registration follows an invalidity application by Belgian company, Shoe Branding Europa BVSA.

At first instance, the EU Intellectual Property Office agreed with Shoe Branding that the three stripes were not distinctive enough for registration as a trade mark, being a merely “decorative” and “banal” design, which did not serve as an indication of trade origin.

This finding – which Adidas did not contest on appeal – would not have resulted in cancellation of the registration, if Adidas had been able to show its mark had acquired distinctiveness through use by the time the invalidity action was filed.

To succeed in a claim to acquired distinctiveness, Adidas needed to show a signficant proportion of consumers would associate items of  clothing, footwear or headgear, bearing the three-stripe motif, with its business.  However, Adidas was not able to prove this was the case throughout the EU.

One of Adidas’s main difficulties concerned the format in which its mark was registered, which did not reflect its use of the stripes in practice for much of the time – at least according to the evidence filed.

Adidas’s representatives tried to address this discrepancy, by arguing its registered trade mark should be viewed as a surface pattern, which could be extended or cut in different ways, including on the slant – if this argument had been accepted, it would have been easier for Adidas to rely on use of its diagonal three-stripe motif on footwear, or elongated vertical stripes down the side of its clothing.

Rejecting the appeal, however, the General Court did not find Adidas’s arguments persuasive. The court emphasised Adidas’s mark had to be considered in the specific graphic form applied for, in conjunction with the description of the mark in the application form as “parallel equidistant stripes of identical width, applied on the product in any direction”.  

The court noted the mark’s rectangular shape, specific height-to-width ratio, and the fact that the stripes are cut at a right angle. These factors, in conjunction with the description, meant there was nothing in the application to suggest the mark formed a pattern.

The court accepted Adidas’s arguments that use of the mark in a “broadly equivalent” form, differing only in “insignificant respects”, could be relied on to evidence acquired distinctiveness in principle.

However, the “extremely simple” nature of Adidas’s mark meant that even minor alterations to it were highly significant, affecting the character of the mark. 

In particular, use of the mark in a reversed colour scheme – ie white stripes on a black background instead of vice versa – was considered a material change by the court, in this instance, owing to the mark’s simplicity.

As a result, a large proportion of Adidas’s evidence had to be disregarded, and the General Court upheld the EUIPO’s decision that Adidas had not proven the mark was distinctive throughout the EU. 

Though the General Court’s decision seems a sensible ruling, Adidas will doubtless be disappointed, and has the option of filing a final appeal up to the Court of Justice of the European Union.

However, Adidas still owns a number of key EU registrations featuring three-stripe motifs, which are not affected by this judgement.  Its portfolio includes registrations for traditional figurative marks / logos, featuring three stripes, as well as registrations depicting the three stripes in specific positions on clothing and footwear. In practical terms, the door has certainly not been opened for third parties to start producing lookalike products.

Trade mark owners should be aware of the need to review existing trade mark portfolios on a regular basis, to check that the format in which their marks are protected accurately reflects use in the market place.  Position and pattern marks (particularly if filed as figurative marks), and the descriptions qualifying them, merit careful consideration in the light of this judgement. Where necessary, marks should be re-filed in an appropriate format.