It may come as little surprise that Adidas is now appealing the unfavourable decision handed down in January 2023 in the trade mark dispute the sportswear company has with the fashion designer, Thom Browne.
Following the decision made by a federal jury in a New York Court, which saw Thom Browne prevail in defence of Adidas’s trade mark infringement claims, Adidas vowed to “continue to vigilantly enforce [its] intellectual property, including filing any appropriate appeals”.
Background
Adidas is famous for pursuing actions against any brands that it considers use a stripe motif similar to its three-stripe trade mark. Adidas’s most recent dispute was brought against luxury fashion designer, Thom Browne, in proceedings brought before a New York Court.
The parties have clashed since 2007 when Adidas first complained to Thom Browne in relation to the use of a three-stripe motif on a high-end sports jacket. At that time, Thom Browne settled the dispute and changed the design to four horizontal bars. The four-stripe mark has been used by Thom Browne since that dispute was settled but the brand came back on Adidas’s radar when it filed a trade mark application in 2018 to protect its Grosgrain Signature mark. On this occasion, Thom Browne appears to have been less willing to bow to Adidas’s demands and, as such, Adidas filed infringement proceedings in June 2021.
Adidas complained that Thom Browne has “expanded its product offering far beyond formal wear and business attire and is now offering[…] athletic-style apparel and footwear featuring two, three and four parallel stripes” in a manner which Adidas argued to be confusingly similar to Adidas’s three-stripe mark.
Adidas argued that Thom Browne was intentionally using a similar mark to benefit from Adidas’s “widespread fame and tremendous public recognition” and “extremely valuable goodwill”, resulting in consumer confusion. Adidas claimed close to $8million in damages and profit.
Successful arguments in defence – that use as a non-competitor was not confusing
Thom Browne’s arguments relied heavily on the operation of the two brands in non-competing markets – Thom Browne as a luxury fashion designer, with significantly higher price points, and Adidas as a high street sports brand – arguing that consumers will not be confused as to the origin of the products. On that basis the defendant strongly argued that “Thom Browne does not in any way, shape or form compete with Adidas”.
Thom Browne presented a document from 2007 in which Adidas purportedly consented to the use of a stripe motif provided that a fourth stripe was added and also argued that Adidas has waited too long to bring a claim. In other words, that Adidas has arguably acquiesced to Thom Browne’s use of the four-stripe mark since 2007.
In closing arguments, Thom Browne’s team pointedly stated that “Adidas does not own stripes”.
Triumphing over Adidas, Thom Browne was found not liable for trade mark infringement and the case was dismissed in its entirety with no damages payable.
A history of disputes
Adidas is no stranger to long-spanning disputes. Not only did the Thom Browne dispute begin over 15 years ago, Adidas was also engaged in a 23-year dispute with H&M in which, after a series of appeals, H&M ultimately prevailed.
Adidas has reportedly been involved in 90 court battles and signed more than 200 settlement agreements since 2008.
Significantly, Adidas also lost its European Union Trade Mark registration for the three-stripe mark, following an invalidation action brought by Shoe Branding Europe on the basis of a lack of distinctiveness and lack of acquired distinctiveness throughout the EU.
Despite the recent loss(es) by Adidas, it is unlikely that the sportswear giant will alter its proactive litigious approach any time soon and risk the dilution of its rights.
What does this mean for the fashion industry?
This decision, handed down across the pond, suggests that it is possible that two brands can operate within the same broader industry (in this case, the fashion industry), provided they do not operate in the same distinct niche within the industry (i.e high end versus high street). This indicates that brands should not automatically expect a trade mark to provide them with complete and undisputable monopoly in the broader market as the test of genuine consumer confusion will remain relevant.
This is an interesting point at a time when the fashion industry is seeing a trend of collaborations between brands that typically offer different price points. For example, Adidas has collaborated with the likes of Gucci and Balenciaga while, similarly, Nike has recently released a collaboration with Tiffany. This arguably skews Thom Browne’s argument that consumer confusion will not arise where the brands operate in different markets with different price points.
As such, it is potentially confusing to consumers to ascertain whether the motif used is simply similar or whether the brands have collaborated, particularly where that brand is known to collaborate. This has been seen recently in Nike’s dispute against A Bathing Ape (Bape) for allegedly copying Nike’s iconic designs and we can only assume Nike’s annoyance is exacerbated by the fact Bape has various collaborations with other brands, including Vans and Timberland, on its website which could arguably cause consumers to confuse the Nike look-alikes for a collaboration.
With the “appropriate appeals” pending, the dispute is not yet over and our Intellectual Property Team will be following the case with interest moving forward.
