EU General Court rules Adidas’ three-stripe trade mark invalid

On 19 June 2019, the EU General Court (GC) ruled that the
three-stripe EU trade mark (EUTM) owned by Adidas was invalid. It upheld the
earlier decision of the EU Intellectual Property Office’s (EUIPO) Second Board
of Appeal, which had found that the trade mark at issue was ‘extremely simple’
and devoid of any distinctive character, both inherent and acquired through use.
The trade mark in dispute was originally registered
on 21 May 2014. It covered clothing, footwear and headgear (class 25 of the
Nice Classification system) and was identified as a figurative mark, i.e. a
trade mark where non-standard characters, stylisation or layout, or a graphic
feature or a colour are used. It corresponded to the following description and
is reproduced below: ‘The mark consists of three parallel equidistant stripes
of equal width applied to the product in whichever direction’.
In December 2014, a Belgian company named Shoe Branding
Europe BVBA filed an application for declaration of invalidity of this mark pursuant
to what is now known as Article 59(1)(a) of EUTM
Regulation 2017/1001
(absolute grounds for invalidity) in conjunction with
Article 7(1)(b) of the same (absolute grounds for refusal). In June 2016, the
Cancellation Division of the EUIPO granted the application on the grounds that
the mark inherently lacked distinctive character.
Adidas challenged the decision in August of the same year,
claiming that, although their EUTM was devoid of inherent distinctiveness, it
had nevertheless acquired a distinctive character in relation to the goods for
which it was registered in consequence of the use made of it throughout the EU after
registration in accordance with Articles 7(3) and 59(2) of the Regulation. After
the Second Board of Appeal confirmed the Cancellation Division’s assessment in
March 2017, Adidas brought the matter before the GC.
In support of its action, the Germany-based company put forward
a single plea in law, which consisted of two parts: first, that the Board of
Appeal wrongly dismissed several items of evidence with the justification that
they related to signs ‘other than the mark at issue’; and second, that the
Board of Appeal erred in holding that it was not established that the mark had
acquired distinctive character following its use within the EU.
Unjustified dismissal
of some of the evidence
In relation to the first part of its plea, Adidas submitted
that the Board had misinterpreted the mark in question and misapplied the ‘law
of permissible variations’. Specifically, the applicant argued that the Board
should not have assumed that the mark was only claimed in specific dimensions,
i.e. that it was represented by three vertical, parallel black stripes of equal
thickness against a white background with a ratio of approximately 5:1 between
the total height and width of the mark. Instead, Adidas claimed, the Board
should have treated the mark as a ‘surface pattern’ the proportions of which were
not fixed, i.e. that the mark was constituted of three parallel equidistant
stripes that could be extended in length or cut in different ways, including
cut at a slanted angle, depending on the goods on which it was applied.
The GC however rejected this claim, concluding that the mark
in question could not be regarded as a pattern mark and there were no
indications that it should be intended as such. Adidas’ mark had been
registered as a figurative mark. Neither its registered graphic representation
nor its description made it clear that it consisted exclusively of a set of
elements which were repeated regularly. Importantly, Adidas’ claim was not
consistent with the graphic representation of their registered mark,
characterised by a rectangular configuration which was created by three stripes
being cut at a right angle and of a specific ratio of height to width. In
addition, the description of the mark on the register did not state that the
length of the stripes could be modified or cut in different ways. The Board of
Appeal’s interpretation of the mark at issue as an ‘ordinary figurative mark’
was thus not erroneous. This conclusion could not be called into question by
the ruling in Apple Inc v Deutsches Patent- und Markenamt [2014] EUECJ C-421/13,
which established that a design may be registered as a trade mark without
indicating the size and proportions of the object it represents. This cannot be
taken to suggest, however, that a mark can be registered without defining the
proportions of the sign itself.
Adidas was not justified in pleading an infringement of the
‘law of permissible variations’ either. This principle, which is rooted in
Article 5C(2) of the Paris Convention for the Protection of Industrial
Property, allows immaterial differences between the form of the mark as it was
registered and the form in which it is used by the proprietor, so long as these
differences do not affect the distinctive character of that mark. The applicant
had produced evidence (mainly consisting of images from catalogues and
promotional materials, showing goods bearing various of their marks) which, in
their opinion, related to forms of use of their three-stripe mark that did not
alter the distinctive character of that mark as registered.
Confirming the Cancellation Division’s assessment, the Board
of Appeal had found that the ‘vast majority’ of the evidence produced related
to signs other than the mark in dispute itself. The following examples of
evidence, in particular, failed to show, according to the Board, genuine use of
the mark:

The GC found that the Board was entitled to dismiss this
evidence for several reasons: first, the ‘extremely simple character’ of the
mark – which was not disputed by the applicant – meant that minor alterations
to the mark could amount to significant changes. As such, its amended form may
not be regarded as broadly equivalent to its registered one. The GC emphasised
that ‘the simpler the mark, the less likely it is to have a distinctive
character and the more likely it is for an alteration to that mark to affect
one of its essential characteristics and the perception of that mark by the
relevant public’.
Second, the evidence did not show the mark at issue, but
‘other signs’ consisting of three light stripes against a dark background. The
act of reversing the colour scheme, namely showing white stripes against a
black background, did not conform with the initial contrast between the three
black stripes against the white background, including the white spaces
separating those stripes. In light of the extreme simplicity of the mark in
question, the failure to respect this specific contrast resulted in a
significant variation of the registered form of the mark, despite the fact that
the sharp contrast between the three stripes and the background was preserved.
Third, the first nine images produced by Adidas showed signs
which had only two – not three – parallel black stripes contrasting with a
white background. Even if these images could be taken to show signs consisting
of three white (or light) stripes against a black (or dark) background, they
nevertheless presented the mark in dispute in forms where the original colour
scheme was inverted. As such, they had to be dismissed for the reasons
presented in the previous paragraph.
Fourth, the use of sloping stripes on the clothing of the
athlete in motion shown in the tenth image above was found to have affected the
distinctive character of the mark. This was not only because of the reversed
colour scheme, but also because it did not meet the dimensions of the mark as
registered with its vertical and parallel stripes. The applicant’s argument
that their direction depended on the athlete’s movement and the way the items were
folded or displayed did not seem to persuade the Court.
As regards the remaining images produced in evidence, the
photographs of footwear broadly suffered the same disadvantage in that the
modification to the thickness and length of the stripes, as well as their cut
at a slanted angle, noticeably affected several characteristics of the mark and
as such related to forms of use that differed from the form in which the mark
had been registered. Finally, Adidas acknowledged at the hearing the
irrelevance of the last four images showing more complex signs. Overall, the GC,
siding with the Board, concluded that the signs appearing in most of the images
submitted by the applicant were rightly dismissed, as they ‘differed
significantly’ from the registered form of the three-stripe mark. Consequently,
there was no violation of the law of permissible variations.
Assessment concerning
the acquisition of distinctive character through use
The second part of Adidas’ plea was that the Board
erroneously found that the applicant had failed to show that the mark in
question had acquired distinctive character in consequence of the use that had
been made of it within the EU. The evidence adduced by Adidas included: images
(discussed in the examination of the first part of the plea above); figures
concerning its turnover as well as figures showing the amount invested in
promoting the mark; and market surveys.
However, the relevance of these items was questioned by the
GC. It followed from the assessment of the first part of the plea that the
applicant could not rely on all the evidence demonstrating a mark consisting of
three parallel equidistant stripes. The GC observed from the very start that:
the relevant evidence is only
that which shows the mark at issue in its registered form or, failing that, in
forms which are broadly equivalent, which excludes forms of use where the
colour scheme is reversed, or which fail to respect the other essential
characteristics of the mark at issue.
Before reviewing the evidence submitted by Adidas, the Court
also recalled well-established principles regarding acquired distinctiveness.
It follows from the unitary character of the EUTM (i.e. the EUTM extends to the
territory in which the EU Treaties apply and has an equal effect throughout the
EU, including uniform protection, invalidity, revocation and transfers of
ownership), that in order to be accepted for registration, a sign must have
distinctiveness (inherent or acquired through use) throughout the EU. It is not
necessary that separate proof is submitted in respect of each and every Member
State. It is sufficient that the evidence submitted is capable of establishing
the acquisition of distinctive character throughout the Member States of the EU.
Acquired distinctiveness may be extrapolated from evidence of use in one
country to another in certain, yet limited circumstances, e.g. where there is a
certain degree of geographical, cultural or linguistic degree of proximity.
In the present case, it was not disputed that the mark at
issue was inherently devoid of distinctive character throughout the whole of
the EU and as such the Board of Appeal had rightfully examined whether the mark
had acquired distinctiveness for the relevant public throughout the territory
of the EU. The only evidence which was material to some extent were five market
surveys carried out from 2009 to 2011 in Estonia, France, Germany, Romania and
Spain. These related to the use of the mark in its registered form and measured
the perception of that mark by the relevant public but covered only part of the
EU and their results were not representative of the entire EU territory.
As far as the images are concerned, the GC did not seem to
be moved by the nearly 12,000 pages of evidence produced during the proceedings
before the EUIPO. In the Court’s view, Adidas failed to identify images which
could establish use of the mark in its registered form or in forms which could
be deemed broadly the same. The first three images above showing the
three-stripe mark affixed to sports bags were not considered relevant, because
such items were not covered by the goods at issue (clothing, footwear and
headgear). Moreover, other images that did correspond to the registered mark
and were capable of establishing some use did not sufficiently indicate the
scale and duration of that use or its impact on how the mark is perceived by
the relevant public.
‘Impressive figures’ concerning Adidas’ turnover, the amount
of marketing and advertising costs and its sponsorship activities in relation
to sporting events showed the ‘considerable investment’ made by the applicant
in promoting its marks in an intensive and continuous manner within the EU.
Nevertheless, these figures concerned the applicant’s ‘entire business […], all
of the goods and all of the marks taken together’, including the promotion of
irrelevant products such as sporting bags and goods bearing only signs other
than the three-stripe mark in dispute. Due to the lack of a demonstrable link
between the figures provided and the mark at issue as well as between the
figures and the goods in question, the GC concluded that it could not be
established that the mark had been used and had acquired distinctiveness as a
result of the use made of it.
The GC concluded that under these circumstances:
[…] the various items of evidence
adduced by the applicant, even taken as a whole: (i) do not prove use of the
mark at issue throughout the territory of the European Union; and (ii) are not
sufficient, in any event, to demonstrate that, by virtue of that use, the mark
at issue has come, in the whole of that territory, to identify the goods for
which it was registered, and thus to distinguish those goods from those of
other undertakings.
On those grounds, the GC dismissed the action and ordered
Adidas to pay its own costs as well as the costs incurred by the EUIPO.
The following interesting points can be gleaned from the
GC’s much-anticipated judgment. Trade mark owners must ensure that their EUTMs
are properly recorded and need to use them in commerce in the form that was
originally registered or in a form that can be deemed broadly equivalent to the
essential characteristics of its registered form. The mark itself must be
identified in a way that accurately determines the scope of the protection
afforded to its proprietor. The EUIPO cannot consider characteristics of the
mark applied for that are not clearly set out in the application for
registration or the accompanying documents. It is also evident from this case
that the GC is likely to strictly adhere to the specific dimensions, proportions
and overall configuration of the submitted mark. As the Court highlighted, ‘it
is for the trade mark applicant to file a graphic representation of the mark
corresponding precisely to the subject matter of the protection [they] wish to
secure. Once a trade mark is registered, the proprietor is not entitled to a
broader protection than that afforded by that graphic representation’. The
salience of filing marks correctly becomes even more pronounced in light of the
acceptance of new types of marks (e.g. multimedia marks or hologram marks) by
the EUIPO as and from 1 October 2017, following the key changes brought by the
new EUTM Directive
Care also needs to be taken with the quality and rigour of
the evidence that may need to be preserved, gathered and submitted in order to
establish that a mark has acquired the necessary level of distinctiveness
across the entirety of the EU. In the present case, the GC challenged the
multiple forms of the three-stripe mark which it found inconsistent with the
mark’s essential characteristics, despite its comparatively high degree of recognition
and regardless of whether its variations might be perceived by the relevant
public to be corresponding to the proprietor’s goods or services.
Furthermore, the protection afforded by the law of
permissible variations is not boundless and it is uncertain which forms of a
mark do not alter the distinctive character of that mark as registered. A
question may arise, for example, in cases where use in various colours has been
made of a mark, the original representation of which is colourless on the
register. Provided that the mark is still visible, it is not entirely clear when
such use would affect the distinctive character of the mark in the form under
which it was registered. So far as figurative marks are concerned, a different
graphical representation is unlikely to diminish the protection granted to the
mark, as long as it can reasonably be regarded as another form of the same
Finally, it cannot plausibly be maintained that the GC’s
judgment sounds the death knell for all of Adidas’ marks featuring the three-stripe
logo. The German corporation owns several other similar marks, like this
and this,
which remain valid. The impact of the present ruling is limited to the specific
execution of the three-stripe mark shown earlier. It is nevertheless a
disappointing for them outcome, which might be appealed to the Court of Justice
of the EU.
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