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Gray Market: The Rise of Luxury Goods
The luxury gray market of authentic goods is growing fast thanks to steep discounts. It’s a lucrative practice, yet original brands don’t usually take part in the game....
The three-stripe brand is out for proactive, some would say aggressive, brand protection.
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We are all familiar with the adidas three-stripes trademarks, which consist of three parallel lines that usually appear on the side of adidas apparel and footwear.
The symbol protects both consumers and the producer and distinguishes adidas in a very competitive market. But to what extent should trademarks protect stripes? And should they be exclusive, or can other brands use them too?
Sneakers are a huge business with trademarks, logos, and designs that consumers recognize and associate with a specific brand.
The market is about quality and performance, but no less about designs and logos.
Trademarks, logos, and designs help consumers identify the source of the footwear, such as seeing three stripes on the side of a shoe and immediately recognizing the brand.
Founded by Adolf “Adi” Dassler in Germany, the company started producing running shoes back in 1924.
Adolf and his brother Rudolf became well known after Olympic athlete Jesse Owens wore their rubber spikes shoes for the Olympic games and won four gold medals. In 1947, the Dassler brothers split.
Adolf registered a new shoe company: Adidas. Rudolf went on to found Puma, but this is another story.
It was somewhere around 1952 that adidas bought its three-stripe logo from a Finnish footwear brand. Soon Adolf referred to adidas as “the three-stripe company”.
Over the years, adidas has built a strong brand and protected it with multiple trademarks, including three-stripes trademarks. It also has endorsement and sponsorship agreements with various entities, such as soccer superstar Lionel Messi, that strengthen the brand and grow its sales.
The brand is known to use legal means to protect its many striped trademarks.
Trademarks are specific in what they defend. Some instances of trademark infringements are straightforward, like counterfeits. In other cases, it depends on how the intellectual property right is applied.
Some brands believe that adidas is within its right to protect its valuable trademarks, while others accuse it of applying the trademark too broadly and going after those who use stripes on their products.
The Germany-based brand sends cease-and-desist letters or files lawsuits. Often companies do not wish to enter into expensive trademark litigation battles and withdraw or negotiate with adidas.
In recent years adidas has filed many trademark infringement lawsuits and opposition proceedings, including against Thom Browne, Aviator Nation, J. Crew, Show Branding Europe, football club FC Barcelona, Marc Jacobs, Tesla and others.
Let’s review some of the recent adidas cases, with a focus on its latest one.
In a new complaint filed in a New York federal court, adidas is suing Thom Browne for trademark infringement and dilution as reported by TFL.
There, adidas claims it has “manufactured, advertised, marketed, promoted, distributed, and sold footwear and apparel bearing its famous and distinctive Three-Stripe trademark” for decades.
It asserts that it has been using the trademark continuously and promoting it “in connection with apparel and footwear”. According to adidas, it has invested “millions of dollars” to promote its marks.
The trademarks have come to identify adidas’s products and help the public recognize and distinguish them.
The company’s Three-Stripe Marks are federal trademarks for “athletic footwear”, “footwear”, and a variety of products including clothing, sporting goods, and bags.
As for the decades-long use, adidas claims it has used its mark on footwear since 1952 and on apparel since 1967. Thom Browne launched his high-end fashion brand in 2001.
Adidas alleges that “despite Thom Browne’s knowledge of adidas’s rights in the famous Three-Stripe Mark” for apparel and footwear, Browne “has expanded its product offerings far beyond [its] formal wear and business attire and is now offering for sale and selling athletic-style apparel and footwear featuring two, three, or four parallel stripes in a manner that is confusingly similar to adidas’s Three-Stripe Mark.”
According to the complaint, the stripes of the Thom Browne sportswear are “likely to cause consumer confusion and deceive the public regarding its source, sponsorship, association, or affiliation.”
A likelihood of confusion between trademarks exists when they are similar to an extent that consumers would believe they come from the same source.
Adidas also claimed that the Browne brand did more than that.
“Exacerbating Thom Browne’s encroachment into adidas’s core market category,” adidas claims that it “entered into a partnership with the famous European football (soccer) club FC Barcelona, beginning with the 2018-2019 season and continuing today”.
It added that Thom Browne has “promoted its goods using images associated with soccer and even several soccer players that are sponsored by adidas, including most notably Lionel Messi.”
According to adidas, Thom Browne’s actions amount to “trademark infringement, dilution, unfair competition, and unfair business practices” arising under the Lanham Act.
A spokesman for Thom Browne responded by releasing a statement to WWD magazine saying that adidas “consented for 12 years and now they are changing their mind” regarding the four-striped design. He added, “we are right and we are confident in the outcome of the case” at court.
Before this, in December 2020, adidas filed an opposition with the U.S. Patent and Trademark Office’s (USPTO) Trademark Trial and Appeal Board regarding trademark application by Thom Browne for red, white, and blue stripes trademarks for use on footwear.
It claims that the trademarks are confusingly similar to the existing adidas marks. Opposition is still pending (as of July 2021).
According to a lawsuit filed by adidas, Aviator Nation infringed on its trademark by using “confusingly similar imitations” of the design on apparel such as jackets.
Adidas said that after Aviator Nation started selling apparel with a three parallel stripes design, they have entered an agreement in 2012 for Aviator Nation to not use the “three-stripe trademark or any design, mark, or feature that is confusingly similar to the three-stripe mark.”
The agreement did not last long, and adidas accused Aviator Nation of trademark infringement and breach of settlement agreement. Again, the two brands settled the matter quietly and in 2013, signed another agreement.
In 2018, adidas claimed that Aviator Nation was again selling apparel that is confusingly similar to adidas’s three-stripe mark. The parties held discussions but were not able to resolve the issue.
Adidas went to court claiming Aviator Nation had continued to manufacture and sell the allegedly infringing apparel. In the lawsuit, adidas claims that the allegedly infringing apparel was likely to “deceive the public regarding its source, sponsorship or affiliation.”
It alleges that in addition to breach of contract, this amounts to trademark infringement, counterfeiting and dilution, and it poses unfair competition and injury to business reputation.
Adidas objected J. Crew’s trademark application for a striped design for use on apparel. In its opposition, adidas argues that “the three-stripe mark [has] come to signify the quality and reputation of adidas.” It, therefore, objected to this stripe design by J. Crew:
Adidas wrote that the design “is confusingly similar to adidas’s three-stripe mark in appearance and overall commercial impression …”.
Furthermore, adidas believes the suggested striped mark by J. Crew can create trademark dilution because, if approved, the adidas trademark will not identify and distinguish only adidas. Therefore, adidas has asked the USPTO’s Trademark Trial and Appeals Board to refuse J. Crew’s application.
The outcome? after settlement negotiations between the parties, J. Crew recently withdrew its application. See Adidas comes for J. Crew’s stripe trademark (yahoo.com)
The intellectual property rivalry between adidas and Skechers is nothing new.
This time, Skechers went to court, asking it to declare that despite adidas’s claims of alleged infringement, Skechers 4-stripe Goldie-Peaks shoe does not infringe on the three-stripe mark.
According to Skechers, adidas sent “infringement notice” letters claiming a similarity in the “overall commercial impression” of the Skechers design, which is likely to result in consumer confusion.
Skechers believes that the three-stripe mark should have a narrow scope in an industry full of stripe designs. Therefore, it is not at fault.
The case was settled out of court.
Gaining protection for stripes or bars is not always easy. In 2019, adidas lost a three-stripe trademark battle in the EU.
In 2009, the Shoe Branding Europe BVBA (Shoe Branding) from Belgium filed for their own trademark.
In 2010, adidas sued. In 2013, EUIPO (known at the time as the Office for Harmonization in the Internal Market) rejected adidas’s notice of opposition.
Adidas then filed an application for wider trademark protection of a mark as consisting of “three parallel equidistant stripes of identical width, applied on the product in any direction.”
In 2014, the European Union Intellectual Property Office (EUIPO), approved and registered an EU trade mark for products of clothing, footwear and headgear.
But in 2016, Shoe Branding filed for the trademark to be annulled on the grounds that it is “devoid of any distinctive character, both inherent and acquired through use.” EUIPO annulled the registration.
Adidas moved on to appeal the decision but failed, and the General Court of the EU upheld the 2016 annulment. In its press release it said, “adidas does not prove that that mark has acquired, throughout the territory of the EU, distinctive character following the use which had been made of it.”
In that, adidas failed to broaden trademark protection over three stripes. This loss should not affect adidas’s existing three-stripe marks and its trademark protection.
However, it does seem to raise the question of what number of stripes, colors, or thickness can adidas protect and prevent others from using.
Why is it important for adidas to protect its brand’s logos and not just the wordmark?
The answer is that those stripes on the side of athletic shoes create visual recognition. When we see Messi on the field with the three stripes on his cleats, it makes us want these products.
Whether or not adidas’s three-stripe mark should get broad protection is a question for national trademark offices and courts.
It is up to them to decide if a certain stripe pattern infringes or dilutes adidas’s trademarks.
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WiserTip: Recognize the importance of strategic classification for marks in light of consumers’ likelihood of confusion between similar or identical marks in the same category.
What is the origin of the name adidas?
Adidas is derived from the first and last name of its founder: Adolf “Adi” Dassler.
What is a trademark?
A trademark identifies and distinguishes a person or a company’s goods or services through any name, word, symbol, device, or any combination thereof. Trademarks protect the exclusive rights to use them. [See 15 U.S. Code § 1127]
What is a figurative mark?
According to EUIPO, a figurative mark is a trademark where “non-standard characters, stylization or layout, or a graphic feature or a colour are used, including marks that consist exclusively of figurative elements.”
Among the examples used by EUIPO for a figurative trademark:
EUTM 005271598
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