• General Court confirmed that adidas’ three-stripe mark was invalid due to its lack of distinctiveness, whether inherent or acquired
  • Where a mark is “extremely simple”, any slight difference in the way the mark is presented, any inversion of the colour scheme or change in direction of the stripes necessarily alters the characteristics of the mark
  • The court was unconvinced by the market survey and financial data submitted by adidas to show that the mark was associated with its undertaking on an EU-wide basis

In adidas AG v European Union Intellectual Property Office (EUIPO) (Case T‑307/17, 19 June 2019), the General Court of the European Union has declared the registration of adidas’ three-stripe mark to be invalid as a result of its lack of distinctiveness, whether inherent or acquired by it. Although the ruling resulted in a good deal of publicity relating to the failure to secure the registration, one can see that the decision is the result of:

  • the breadth of the application made by adidas; and
  • the significant evidential shortfalls seen in both the inconsistent nature of the evidence submitted and the disconnect between that evidence and the mark in question.

Background

The proceedings between the EUIPO and adidas commenced back in 2013 when adidas applied to register a trademark with the EUIPO under Regulation 207/2009, as amended (replaced by Regulation 2017/1001. The mark is question was a representation of adidas’ well-known three-stripe mark (reproduced below):

https://www.worldtrademarkreview.com/enforcement-and-litigation/adidas-decision-general-court-reiterates-importance-evidence

The mark was applied for as a figurative mark for "clothing; footwear; headgear" and described as follows: "The mark consists of three parallel equidistant stripes of identical width, applied on the product in any direction."

Soon after the initial application was registered, Shoe Branding Europe BVBA (SBE) ¦led an application for a declaration of invalidity, arguing that the mark was devoid of distinctive character (and so lacked inherent or de jure distinctiveness). SBE argued that, as a result, the mark should not have been registered (under Article 7(1)(b) of the regulation) and should be declared invalid (under Article 52(1)(a) of the regulation). SBE also argued that the mark also lacked any acquired or de facto distinctiveness under Articles 7(3) or 52(2) of the regulation and so should be declared invalid. The EUIPO’s Cancellation Division agreed with SBE. The decision was appealed by adidas to the Board of Appeal, which rejected adidas’ arguments as well as its evidence. In these proceedings, adidas argued that the board had misinterpreted the scope of the mark by considering it in specific and exacting dimensions and, in response to the board’s assertion that the mark was a “figurative mark”, adidas submitted that the three-stripe mark was instead a form of figurative mark called a "pattern mark" and therefore capable of being used in different dimensions and cut in different ways, including at a slant. adidas further argued that the board had misinterpreted the concept of ‘use’ under the regulation and, in particular, the "law of permissible variations", such that slight variations of a mark can be used in a form which does not alter the distinctive character of the mark and that such use can still support acquired distinctiveness (as well as being genuine use of the mark). Finally, adidas claimed that the board had made an error in finding that adidas had not provided evidence that the mark had acquired distinctive character through use.

General court decision 

The General Court agreed with the Cancellation Division and the board, holding that the mark applied for lacked inherent and acquired distinctiveness for, inter alia, three primary reasons, all of which were related to the General Court's view of the evidence ¦led by adidas.

First, the General Court held that, contrary to adidas’ case, the mark in question was not a pattern mark (allowing the three stripes to be used in varying proportions) because there was no evidence that it was applied for as such, but rather a figurative mark, so that its scope of protection was limited to the form in which it was registered as described. It appears, then, that the General Court took the view that adidas’ attempt to describe the mark as “to be applied in any direction” was an attempt to register something more than the mark, as applied for, actually was. Additionally, the board argued that any variations in proportions of a "simple" mark alter the mark to make it distinct and separate from the mark in question. This had a significant knock-on effect on the court's view of the evidence led in support of the mark, as it is only possible to rely on evidence showing use of marks which vary from the mark in a way which does not affect the distinctive character of the mark in question.

Second, the General Court dismissed adidas’ argument that the “law of permissible variations” (which allows the use of slight variations of a mark to be valid use for the purposes of assessing distinctiveness and use under the regulation) was misapplied by the board. The General Court found that the board did not err in finding that, where a mark is “extremely simple”, as in the present case, then any slight difference in the way the mark is presented, and any inversing of the colour scheme (white stripes on a black background) or change in direction of the stripes necessarily altered the characteristics of the mark. The General Court noted that most of the evidence submitted to the EUIPO consisted of slight variations - in terms of number of stripes, colour schemes and stripe direction - of the mark in question, which did alter the distinctive character of the mark, rendering most of the image-based evidence irrelevant. Thus, not only was the evidence submitted inconsistent in itself (and therefore much of it was struck out by the board), but it was also entirely disconnected from the mark in question. These two factors together were ultimately fatal to adidas’ appeal.

Third, the General Court was wholly unconvinced by the market survey and financial data submitted by adidas to support its argument that the mark in question is associated with its undertakings on an EU-wide basis. adidas had submitted 23 market surveys covering nine European countries, but the board had only accepted five of the 23 surveys. This was due in part to the fact that the other surveys did not concern the exact mark in question (see the point above). The General Court also noted that the five surveys contained a bias whereby survey participants had been asked, prior to the start of the survey, whether they had previously encountered the mark in question in relation to sportswear, which may well have facilitated the association of the mark with adidas. Furthermore, the five surveys which the General Court regarded as eligible only related to five countries in the European Union and was insuficient to establish use throughout the whole of the European Union as the General Court determined was necessary. Regarding the financial data submitted by adidas, there was, again, no indication that the financial information related to the exact mark in question. The General Court took the view that that the data was an amalgamation of revenues for all the different versions of the mark used by adidas, the relevance of which to the proceedings had already been dismissed.

Comment

This ruling caused a good deal of controversy on its publication with some articles suggesting that adidas had lost a significant case relating to its brand protection. However, it is unlikely that adidas' brand protection will be significantly reduced as a result of the decision and adidas may well refile in due course for the same or a similar mark once it is con¦dent it has the evidence it needs to support its application. This decision cements the importance of (1) ensuring that the drafting of the application for a mark correctly respects the desired scope of protection sought, and (2) submitting strictly relevant evidence that is both consistent with, and directly linked to, the exact mark in question. The decision also shows the potential problems in proving use throughout the whole of the European Union.

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