The Adidas Case – is your EU Trademark Safe?

You may have heard from various press articles that the General Court of the European Union has recently upheld that the iconic three stripes design owned by Adidas is not distinctive enough for trademark registration.

On first impression, that doesn’t seem right. Everyone would surely associate the three-stripe logo with Adidas?

Background

The General Court decision was a result of an appeal by Adidas against an earlier annulment by the European Union Intellectual Property Office (EUIPO). The trade mark was originally registered in 2014 but was subsequently contested by market competitor, Shoe Branding Europe BVBA, which argued that the mark should never had been registered in the first place.

They based this on Article 7 of the then in force Regulation 207/2009 which provided that mark cannot be registered if it was devoid of any distinctive character.  The Cancellation Division of EUIPO granted Shoe Branding’s application in 2016.  Adidas then appealed this decision to the Board of Appeal of EUIPO and argued that it can establish evidence that the mark had acquired a distinctive character through use within the European Union.

The Board of Appeal confirmed the Cancellation Divisions decision and ruled that Adidas had failed to establish that the mark acquired distinctive character through use.

The Decision

Adidas AG v European Union Intellectual Property Office – Shoe Branding Europe

Adidas argued that the Board of Appeal had wrongly dismissed items of evidence and erred in determining that the mark had not acquired distinctiveness through use. For a trade mark to be validly registered in the EU it must be distinctive. In other words, the mark identifies the product as originating from a particular undertaking as opposed to another. (Article 7(1)(b) of Regulation 2017/1001)*

A mark may consist of any signs, words, images, letters, shape of goods provided it possesses this distinctiveness. If a mark initially lacks distinctiveness but then has acquired a distinctive character from use, the mark will no longer be invalid. (Article 7 (3) and 52(2)).

Adidas did not challenge the finding that the mark lacked distinctiveness on registration but argued that it had acquired this distinctiveness through use. The first limb of Adidas’s main argument was that the Board of Appeal misinterpreted the mark as registered and as a result, failed to consider evidence which it believed to be relevant. Adidas claimed that the mark was registered as a surface pattern which could be reproduced in different dimensions and proportions.

Without delving into the technical and factual details, if the mark could be construed as a pattern, then this would allow Adidas to adduce evidence of use of the three stripes pattern irrespective of length, cut or proportion.

The Court held that the trade mark was registered as a figurative mark and further did not consist of a pattern. They concluded this by assessing the graphic representation and the written description used by Adidas on its application for registration. The Court noted that it is up to the trade mark applicant to ensure that the graphic representation corresponds precisely to the subject matter of the protection he wishes to secure.

The description of the mark given by Adidas did not specify the proportions of the mark nor the length of the stripes nor that they could be cut at a slanted angle.

The Court referred to prior cases which determined that a figurative mark is registered in the proportions shown in its graphic representation and that the proprietor of that mark was not entitled to any greater protection. (Red Bull v EUIPO – Optimum Mark (combination of the colours blue and silver), T–102/15, under appeal, EU T:2017:852.).

The Court also noted that evidence of use will be limited to those marks which are in the same form as that of the registered mark or with only insignificant variations.  What this meant was that a large proportion of evidence produced by Adidas was found to be unrelated to the mark itself but to other marks which were significantly different.

Another key consideration for the Court was whether Adidas submitted sufficient evidence of use throughout the EU.  The Court noted that it was not necessary to submit evidence in respect of each individual Member State but rather “evidence that is capable of establishing acquisition of distinctive character throughout the Member States” of the European Union (at paragraph 149).

Adidas had produced surveys from five Member States. It also provided evidence of its turnover and investment to promote the mark and argued that this showed the mark is used in a similar way throughout the EU and also that there was a comparable market amongst all the Member States. If Adidas could show a comparable market, then this could be used to establish use across the whole of the EU (Sociéte des produits Nestlé and Others v Mondelez UK Holdings & Services, C-84/17 P and C-95/17 P, EU: C:2018:596, paragraph 81).

The Court held that the evidence concerning turnover and marketing efforts was not sufficient to demonstrate the different Member States’ markets were comparable and that therefore the only evidence relevant to use was the five market surveys. They did not relate to nor could be extrapolated to cover the remaining Member States.

Adidas has indicated it will appeal the decision to the European Court of Justice.

Regardless of the result of Adidas’ appeal, this decision demonstrates how important it is to carefully describe your mark and graphic representation when applying for trademark registration.

*The Court applied Regulation 207/2009 as it applied at the time