Introduction

On 19 June 2019, The European Union General Court (the “General Court”) dismissed the appeal application filed by Adidas and upheld the decision of European Intellectual Property Office (“EUIPO”)’s Second Board of Appeal that, among other things, Adidas’ signature mark of parallel equidistant stripes “” lacks the distinctiveness required for it to be qualified for trademark protection. This ruling effectively puts an end to Adidas’s attempt to defend its trademark in the European Union (“EU”).

Background

On 18 December 2013, Adidas filed an application for registration of an EU trademark with EUIPO in respect of clothing, footwear and headgear. In its application for registration, the mark, being identified as a figurative mark, was described as “The mark consists of three parallel equidistant stripes of identical width, applied on the product in any direction.” (the “Three-Stripes Mark”).

While the Three-Stripes Mark was successfully registered with EUIPO on 21 May 2014, Shoe Branding Europe BVBA as intervener filed an application for declaration of invalidity of the Three-Stripes Mark on 16 December 2014 primarily on the basis that the Three Stripes Mark is devoid of any distinctive character, both inherent and acquired through use pursuant to Article 52(1)(a) of Regulation No 207/2009 (now Article 59(1)(a) of Regulation 2017/1001) and Article 7(1)(b) of Regulation No 207/2009 (now Article 7(1)(b) of Regulation 2017/1001) (the “Declaration”).

Such application of the Declaration was granted by the Cancellation Division on 30 June 2016. Adidas then filed an appeal with EUIPO on 18 August 2016 on the basis that the Three-Stripes Mark had acquired distinctive character through use within the meaning of Article 7(3) and Article 52(2) of Regulation No 207/2009 (now Article 7(3) and Article 59(2) of Regulation 2017/1001) and shall therefore be qualified for trademark registration.

Such appeal, however, was dismissed by the Second Board of Appeal of EUIPO (the “Board of Appeal”) on 7 March 2017 on the basis that (1) the Three-Stripes Mark (as a figurative mark) was inherently devoid of distinctive character and that (2) Adidas had failed to establish that such mark had acquired distinctive character through use throughout EU. Adidas further appealed to the General Court.

Grounds of appeal

Adidas primarily relied on two grounds in filing the appeal to the General Court.

Firstly, the Board of Appeal had erred in dismissing a number of evidence on the ground that such evidence related to signs other than the mark at issue. It was Adidas’s position that such conclusion of the Board of Appeal regarding the admissibility of its evidence is the result of (1) its misinterpretation of the Three-Stripe Marks by reference predominately to a specific ratio of height and width of such mark and (2) its failure to take into consideration the law of permissible variations.

Secondly, the Board of Appeal was mistaken in concluding that Adidas had failed to establish that the Three-Stripe Mark had acquired distinctive character through use in EU.

Court’s decision

In rejecting the first ground of appeal regarding the interpretation of the Three-Stripes Mark and by adopting the decision in Jaguar Land rover v OHIM (Shape of a car) (T-629/214, not published, EU:T:2015:878, para. 34), the General Court held that the registration of trademark can take effect only on the basis of, and within the limits of, the application for registration filed by the applicant with EUIPO. In other words, EUIPO may not take into account characteristics of the mark applied for that are not set out in the application for registration or in the accompanying documents.

In the present case, Adidas acknowledges that the Three-Stripe Mark was validly registered as a “figurative mark” (as opposed to pattern mark). It follows from case law that such mark, in principle, is registered in the proportions shown in its graphic representation. As such, Adidas is not entitled to submit that the Three-Stripes Mark represents a “surface pattern” that may be reproduced in different dimensions and proportions depending on the goods on which it is applied. Such position is simply not consistent with its registration application. Accordingly, the General Court held that the Board of Appeal was not mistaken in its interpretation of the Three-Stripes Mark.

Regarding the alleged misapplication of the law of permissible variations, Adidas argued that according to such law of permissible variations, the use of a mark in a form differing in elements which do not alter the distinctive character of that mark in the form under which it was registered shall also be considered as use of that mark and are therefore relevant for the purposes of assessing whether the mark at issue has acquired distinctive character. It follows that, as Adidas argued, the evidence of use (including several numbers of images showing the Three-Stripes Mark on different products) should have been considered by the Board of Appeal in reaching its decision on the distinctiveness of the Three-Stripe Mark.

The General Court rejected such argument and agreed with the ruling of the Board of Appeal. In essence, the General Court is of the view that the Three-Stripes Mark had relatively few characteristics and consisted of three black parallel lines in a rectangular configuration on a white background, which in other words, was “extremely simple”. It follows that, given the extreme simplicity, even a slight variation could produce a significant alteration to the characteristics of the mark as registered. The act of reversing the colour scheme, even if a sharp contrast between the three strips and the background is preserved, cannot be described as an insignificant variation. The images adduced by Adidas are related to forms of use that differ from the form in which the mark at issue has been registered. In particular, such differences constitute significant changes so that the forms of use in question cannot be regarded as broadly equivalent to the registered form of the mark at issue and the Board of Appeal was correct in holding that such images were related to signs other than the mark at issue.

In relation to the second limb of Adidas’s appeal regarding the acquiring of distinctive character through use, the general legal principles governing the acquisition of distinctive character through use were not disputed by Adidas. As the General Court recognised, it is settled case-law that factors such as the market share held by the mark at issue; how intensive, geographically widespread and long-standing use such mark has been; the amount invested by the undertaking in promoting the mark and the proportion of the relevant class of persons who, because of the mark, identify goods as originating from a particular undertaking shall be taken into account when assessing whether the mark at issue had in fact acquired distinctive character through use. The General Court rejected such ground of appeal mainly on the insufficiency of the evidence adduced by Adidas in that case for establishing the factors mentioned above.

Conclusion

With no doubt, this case has dealt a great blow to Adidas’s attempt to expand its boundary of trademark protection in EU. At the same time, it also serves as a good reminder to trademark applicants as to the importance of a well-planned registration application and in particular the mark description therein.

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Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.