The Court of the European Union (EU) has confirmed the invalidity of the Adidas AG (Adidas) European trademark, represented by three parallel stripes applied in any direction.
The important decision of the EU Court T-307/17 concerns Adidas’ figurative mark, represented by the renowned “three stripes”.
In 2013, Adidas submitted the application for registration in the EU for the figurative mark mentioned above, described as “three equally spaced, parallel stripes, all the same width, applied to the product in any direction”, obtaining – in 2014 – registration under class 25 (“clothing, shoes and headgear”).
In 2014, the Belgian company Shoes Branding Europe BVBA submitted an application for a declaration of invalidity for the registration of Adidas’ “three stripes”. The request was accepted by EUIPO’s annulment division which, in 2016, explained the reasons for this based on the fact that the registration was devoid of any distinctive character, either intrinsic or acquired as a result of use.
Specifically, according to the annulment division, Adidas did not proove that its “three-stripes” trademark – originally devoid of intrinsic distinctive character – had acquired a distinctive capacity throughout the entire EU territory following the use that had been made of it.
Also in 2016, Adidas challenged this decision before the EUIPO Board of Appeal which, however, in 2017 confirmed the annulment decision. Adidas then re-appealed against this decision before the EU Court, which on June 16, 2019 confirmed the annulment decision (read the official press release).
First, the Court found that the “three-stripes” trademark does not, as claimed by Adidas, constitute a “motif mark”, but an ordinary figurative mark.
According to the Court, in fact, neither the graphic representation of the mark nor its description show that it consists of a series of elements that are regularly repeated; also according to the Court, the proportions of these elements are not defined.
In this regard, the Court has specified that the use of a trademark, which has an insufficient intrinsic distinctive capacity, in a slightly modified form compared to how originally filed, cannot be taken into consideration for the purposes of proving the acquired distinctive capacity.
Specifically, the Court has ruled that the forms of use that depart from the description of the essential characteristics of the figurative mark lacking intrinsic distinctive capacity, such as reversing the classic color scheme, cannot be taken into consideration in order to prove the use of that trademark. In this regard, the Court has emphasized that the disputed trademark is a simple figurative mark which does not contain any denominative element and has few characteristics, one of which is the use of three black stripes on a white background. Inverting this color scheme, therefore, cannot be qualified as a negligible variation with respect to the registered form of the disputed trademark.
As a consequence of the above, the Court therefore adjudged that, among the proof of use provided by Adidas, the only proof to be “pertinent” and, therefore, admissible, concerned only five EU Member States and that this could not, in this case, be referred to the entire EU territory.
The Court therefore concluded that Adidas had not proved that the contested trademark had been used throughout the entire territory of the Union, nor that it had acquired a distinctive character as a result of the use that had been made of it.
According to the Court, in fact, in order for acquired distinctive capacity of a brand to be considered, this has to be proven in all member States of the European Union.
As soon as the ruling of the EU Court became public, Adidas stock fell sharply on the stock exchange, by a value close to 1.8%. Considering that Adidas has seen a long period of growth, the negative dip resulting from the ruling has also had important economic consequences.