Adidas - two stripes and you're out

The ECJ supports Adidas in refusing to restrict the scope of protection of its stripe motif

The European Court of Justice (ECJ) has held that an unauthorised user of a simple and decorative motif similar to or identical to a registered trade mark, such as the Adidas three-stripe motif, cannot plead the requirement of availability as a defence to infringement under Article 5 of the Trade Marks Directive 89/104/EEC.

Background

Adidas AG, proprietor of the well-known trade marks consisting of three vertical and parallel stripes which is featured on sports and leisure clothing, together with Adidas Benelux BV, the exclusive licensee in the Benelux countries, received a possible boost from the ECJ in their Dutch action against the use of a two-stripe motif. Marca Mode CV, C&A Nederland CV, H&M Hennes & Mauritz Netherlands BV and Vendex KBB Nederland BV were on the receiving end of Adidas' claim that their competing two-stripe motif on sports and leisure clothing was similar to Adidas' registered three-stripe trade mark, was used on the same type of garments and was an infringement of Adidas' trade mark rights under Article 5 of the Directive.

The Dutch Supreme Court had ruled that the three-stripe trade mark was not distinctive per se, but that it had acquired distinctiveness as a result of intensive use. However, the Court was undecided as to whether, given that simple stripe motifs are, generally, signs which must remain available to the public, the marks owned by Adidas could afford protection against use of its competitors' two-stripe motif.

The Dutch Supreme Court stayed proceedings and referred questions to the ECJ. These asked in essence whether the general interest in ensuring that the availability of given signs is not unduly restricted for other traders, should be taken into account when determining the scope of protection of a mark which had no inherent distinctiveness although it had acquired distinctive character through use. If the answer was yes, was it relevant that the sign alleged to infringe "was seen by the relevant public as being … used to distinguish goods or merely to embellish them" or that it was itself "devoid of distinctive character, within the terms of Article 3(1)(b)… or contains a designation, within the terms of 3(1)(c) of the Trade Marks Directive"?

Outcome

Requirement of Availability - Adidas maintained that the requirement of availability must be taken into account only when the grounds for refusal or invalidity provided for in Article 3 of the Directive apply and cannot restrict the exclusive rights granted to the proprietor of a registered trade mark. The ECJ concurred, but noted that this public need was also protected by and relevant to Article 6(1)(b).

The availability argument in this case was however employed to plead the right to use the registered mark without Adidas' consent - in order to fall outside of infringement under Article 5. In other words, the scope of Adidas' exclusive right was claimed to be restricted by the "need to keep free" doctrine. The ECJ held that allowing such an argument to succeed would undermine the effective application of Article 5(1)0. The requirement of availability is not a relevant factor in the assessment of the degree of similarity between Adidas' mark and the third party sign, nor in determining whether a link would be made by the public between the sign and that mark for the purposes of Article 5(2).

Decorative Signs - The ECJ was not persuaded by any reliance on the decorative nature of the two-stripe motif constituting an indication concerning one of the characteristics of the goods under Article 6(1)(b). The decorative nature of the sign was a characteristic of the goods, not an indication of such, and therefore Article 6(1)(b) had no application.

Furthermore, following the previous Adidas case (Case C-408/01 Adidas v Fitnessworld) in 2003, the ECJ concluded that a decoration that did not provide any indication of source cannot be said to be an infringement of a registered mark. However if the allegedly offending sign brought the mark to mind then it was not acting only as an embellishment. The ECJ further observed that a high level of acquired distinctive character will not only compensate for a lower degree of similarity between the mark and the sign, but it will also make it more likely that the average consumer will "associate" the sign with the owner of the mark presumably including where the sign is perceived as at least partly decorative.

Comment

Owners of well established trade marks which consist of simple motifs will be re-assured by this judgment. Once such marks have acquired sufficient distinctive character to be properly registered then the need to keep free doctrine cannot be pleaded as a defence to otherwise infringing use of the registered motif.

However, reading between the lines of the ECJ's reasoning, it is likely that unused or relatively unknown registered marks which constitute a simple potentially decorative motif may prove difficult to protect. This is because the average consumer may only perceive an identical or similar sign to be a mere embellishment and will not therefore even make an "association" with the registered mark.

This analysis was produced by Jordanna Popli (jordanna_popli@wragge.com), a solicitor in the IP team.