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European Union General Court on Acquired Distinctiveness – Adidas Three Stripes Case

August 27, 2019

The European Union General Court recently on 19th June 2019, passed a judgment in case of Adidas v. EUIPO – Shoe Branding Europe, against the German sports apparel giant, Adidas, in a trademark dispute. The Hon’ble European Union Court held that the “three-stripe” logo, which was first registered by the founder of Adidas, Adi Dassler, is not distinctive enough in nature, and the company could not prove that the stripes has a distinctive character throughout the 28 European Union countries. This article delves into a step by step analysis of this judgment and its impact on international trademark regime.

Dispute

In 2013, Adidas filed an application for registration of “three-stripes” trademark with the European Union Intellectual property Office (EUIPO) for clothing, footwear, and headgear. This dispute started from 2014, when Adidas got this trademark registered at EU IPO, for clothing, footwear, and headgear. In its registration application, Adidas described the mark as consisting of “three-parallel equidistant stripes of identical width, applied on the product in any direction”. Shortly after the mark was registered, a Belgian footwear company named Shoe Branding Europe successfully applied to invalidate the mark of Adidas on the ground that it was devoid of any distinctive character. Shoe Branding’s own logo consists of two stripes and the parties have a long-running dispute involving variations of their respective stripe marks.
Adidas appealed the invalidity decision, claiming that its mark had in fact acquired distinctive character through usage. However, the appeal was dismissed and the European Union Intellectual Property Office (EU IPO) Board found Adidas’ evidences insufficient to prove that its “three- stripes” mark has acquired the distinctive character throughout the European Union.
Adidas appealed again, and this time to the European Union General Court. The final judgment on this matter has recently been passed by General Court. In its appeal, Adidas disputed the board’s decision that the submitted evidence was insufficient to prove acquired distinctiveness throughout the European Union. Adidas pleaded that EU IPO’s Board of appeal was wrong in its assessment. Adidas relied on large amount of market survey evidence to prove the acquired distinctiveness of its mark. However, only market surveys conducted in five member states were deemed to be of relevance, which means Adidas was unable to prove distinctiveness in all the 28 European Union Countries. The General Court dismissed the action, finding the Board was correct in its decisions.

Decision of General Court

The European Union General Court in its decision on 19th June, 2019 upheld the EU IPO Board’s Decision that the German Sportswear giant Adidas’ mark, consisting of “three parallel equidistant stripes”, lacks the necessary distinctiveness to be protected as a trademark. In addition to this, the General Court held that the sportswear brand failed to present that its largely known mark has acquired the necessary “distinctive character” throughout all 28 countries of the European Union,
Further the court stated that a party need not show separate evidence of distinctiveness for each and every member state, as companies may group several Member States together in the same distribution network and may treat these Member States, as if they were one and the same national market, and the evidence submitted must be capable of establishing such acquisition by that mark of distinctive character through use throughout the Member States of the EU. The Court further went on saying that the “three-stripes” mark is not a pattern mark composed of a series of regularly repetitive elements, but it is only an “ordinary figurative mark”.

Conclusion

In this case, the General Court ruled in favour of Shoe Branding Europe and agreed with EUIPO, however this case might still have some fire left as Adidas can still appeal to the higher Court of Justice of the European Union. Although, this order passed by European Union General Court would not affect the other trademarks of Adidas registered in various jurisdictions, but this judgment has certainly given a whole new direction to the concept of acquired distinctiveness in European trademark regime. Even though Adidas has acquired international reputation the EU Court seem to have judged its trademark based on its regional popularity and recognition. This only goes to show that EU does not only take into consideration the uniqueness and distinctiveness of a mark but also its ability to distinguish itself in a specified region and only then such mark shall be allowed to claim protection under its trademark regime. This order of EU Court has blurred the lines of what amounts to trans-border reputation under the European Union laws, because in many countries like India the “three- stripe” trademark is already registered and holds a good reputation in market. This judgment has sidelined the concept of trans-border reputation and made it clear that to prove acquired distinctiveness in Europe Union one has to prove the reputation in European Union Member Countries, and not only in some of the EU countries but in all the countries.
In Indian IP regime, there is no set parameters to prove the acquired distinctiveness of a trademark, but many judgments has discussed this and tried to give some parameters to prove the acquired distinctiveness of a trademark. In India apart from emphasis over the evidence of use and financial figures something more is required, merely the use of mark is not equal to distinctiveness, and when it comes to proving the distinctiveness it is required that the proprietor should show the mark has acquired the secondary meaning. Courts have observed that to prove acquired distinctiveness, the applicant has to show that the marks has been used extensively; publicity wide and in consequence has achieved some sort of secondary distinctive meaning. In view thereof, under the Indian Trademark regime the requirement of mark acquiring a secondary meaning is a must, in order for an applicant to claim acquired distinctiveness.

1T-307/17
2Pidilite Industries Limited and Ors. vs. Vilas Nemichand Jain and Ors. (SUIT NO. 2130 OF 2010)
3Id.
4Imperial Tobacco Co. Of India Ltd. vs Registrar Of Trade Marks And Anr. AIR 1968 Cal 58

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