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Adidas Wins Intellectual Property Battle Against Belgian Shoemaker over Three Parallel Stripes Trademark

The General Court of the EU dismissed an appeal brought by Shoe Branding Europe BVBA (Shoe Branding) on 1 March 2018. The appeal was filed by Shoe Branding against the decision of the European Union Intellectual Property Office (the EUIPO) to refuse registration of its trademark. The refusal followed an opposition filed by Adidas AG (Adidas). This trademark case may be relevant to Hong Kong and Chinese mainland shoe manufacturers and sellers in the European market, who wish to protect their own marks, and see how such trademarks are protected by the courts under the EU’s intellectual property law.

On 1 July 2009, Shoe Branding filed an application for registration of an EU trademark consisting of two parallel lines positioned on the outside surface of the upper part of a shoe, to be registered under “Footwear”. Adidas opposed the registration on the basis of two provisions of the EU’s Trademark Law (now Regulation 2017/1001 on the European Union Trademark). Relying on these provisions, Adidas argued that there could well be a likelihood of confusion between Shoe Branding’s and its own trademarks; and Shoe Branding’s attempt to take unfair advantage of the reputation of the well-known Adidas trademark.

What followed was a protracted series of appeals and referrals which brought the case before the General Court and the Court of Justice of the European Union (the ECJ) in 2016. When the ECJ upheld the General Court’s finding that the signs were confusingly similar, the case was referred back to the Second Board of Appeal of the EUIPO.

Following the ECJ judgment, the Board of Appeal of the EUIPO sided with Adidas and rejected Shoe Branding’s trademark application. This time, Shoe Branding appealed to the Court alleging that the EUIPO had made several errors of assessment as regards (i) the evidence of the reputation of the Adidas trademark; (ii) the existence of damage to the reputation or distinctive character of the trademark; and (iii) the absence of any due cause for the use of the trademark applied for.

In its judgment, the Court rejected all arguments and therefore dismissed the appeal in its entirety.

Article 8(5) of the EU’s Trademark Law protects an earlier trademark that enjoys a reputation in the European Union. Shoe Branding argued that the evidence of the reputation of the Adidas trademark was insufficient. However, in its assessment of Shoe Branding’s argument, the Court took into account (i) the high degree of awareness by the relevant public of the Adidas trademark consisting of three parallel stripes (particularly when affixed to a shoe); (ii) the existence of several decisions of national courts noting the reputation of the Adidas trademark; and (iii) the significant sponsorship activity undertaken by Adidas and the fact that many sports personalities wear footwear bearing the Adidas trademark. In view of these factors, the Court held that Adidas had adequately demonstrated the reputation of its trademark.

Shoe Branding also argued that its contested trademark application did not take unfair advantage of, nor was it detrimental to, the distinctive character or the reputation of the Adidas trademark. To that end, Shoe Branding contended that Adidas had not shown evidence of injury. According to Shoe Branding, its own two-stripe sign and the Adidas trademark had coexisted “peacefully” for a great number of years.

The Court disagreed and indicated that there had been no “peaceful coexistence” of the two trademarks as Adidas had already challenged the applicant’s trademark twice in the past. The Court also referred to the Board of Appeal’s finding that the Adidas trademark enjoyed a high, long-held and enduring reputation and that it benefitted from a power of attraction, linked to an image of quality and prestige, acquired after decades of investment, innovation and publicity. The Court added that the stronger the reputation of the trademark, the more likely a subsequent trademark is likely to take unfair advantage of it.

Furthermore, the Court noted that Shoe Branding had clearly alluded to the Adidas trademark in using the slogan “two stripes are enough” in a 2007 promotion campaign. By doing so, Shoe Branding had clearly referred to the Adidas trademark and had suggested that the goods which it sold under a two-striped trademark had equal qualities to those sold by Adidas under a three-striped trademark. The Court therefore rejected Shoe Branding’s argument.

Finally, the Court also held that there was no due cause for the use of Shoe Branding’s trademark as such use did not satisfy the conditions set out in the Court’s case law. In particular, the applicant did not show that it had used the trademark throughout the European territory. Moreover, the two trademarks had not coexisted peacefully and the Court noted that Shoe Branding was unlikely to use its trademark in good faith considering the 2007 campaign. The Court therefore dismissed Shoe Branding’s appeal.

Hong Kong shoe sellers will see that this ruling is an important victory for Adidas in its long-running dispute with Shoe Branding. Nonetheless, in a surprise twist to the case, the battle surrounding the Adidas three-stripes trademark continues. This is because the EUIPO declared the Adidas three-stripe trademark invalid for lack of distinctive character in distinct proceedings initiated by Shoe Branding. Adidas has appealed that decision at the General Court.

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