In a judgment dated 19 June 2019 (T-307/17), the General Court of the European Union confirmed that the vertical three-stripe trade mark of Adidas is not valid because the trade mark lacks distinctive character. According to the Court, the trade mark is inherently devoid of distinctive character and Adidas did not prove that the trade mark had acquired distinctive character through the use thereof ("acquisition through use").
Adidas and Shoe Branding Europe BVBA ("Shoe Branding"), a Belgian footwear company, have been engaged in a legal battle over the use of parallel stripes as a trade mark for shoes for many years. In a judgment dated 17 February 2016 (C-396/15), the Court of Justice of the European Union ruled that two (oblique) parallel stripes on shoes of Shoe Branding could create confusion with the (oblique) three-stripe trade mark of Adidas.
In 2014, Shoe Branding filed an application with the Cancellation Division of the EU Intellectual Property Office ("EUIPO") to have the following (vertical) three-stripe trade mark of Adidas declared invalid on the grounds that the trade mark was devoid of any distinctive character:
Distinctive character and acquisition through use
Having distinctive character is a condition of validity for all trade marks and requires that a trade mark can serve to identify the origin of the goods or services covered by the trade mark. By means of almost 12,000 pages of images, figures relating to turnover and marketing and advertising expenditure, market surveys and other evidence, Adidas attempted, as a classic defence, to demonstrate that the trade mark had acquired distinctive character through the use thereof.
On 30 June 2016, the EUIPO's Cancellation Division invalidated Adidas' trade mark. Following an appeal lodged by Adidas against that decision, the EUIPO's Board of Appeal held in its decision of 7 March 2017 that Adidas' evidence did not sufficiently prove that the trade mark had acquired distinctive character through use. According to the EUIPO, the evidence related to non-analogue variations of the trade mark or could not be sufficiently linked to the use of the vertical three-stripe trade mark. The Board of Appeal confirmed the decision of the Cancellation Division.
Adidas lodged an appeal before the General Court against the decision of the EUIPO's Board of Appeal.
When assessing acquisition through use in the EU, an essential question is whether merely the use of the actually registered trade mark should be taken into account or whether the use of variations of the registered trade mark can also be taken into account in the assessment.
To answer this question, the General Court referred to the "law of permissible variations". This principle is used in the context of the obligation of genuine use of a trade mark. According to this principle, a trade mark has been put to genuine use by the proprietor when the proprietor uses a sign which insignificantly varies from the registered trade mark ("equivalent signs") and such insignificant variation does not alter the distinctive character of the trade mark.
Proof of acquisition through use: quality over quantity
Acquisition through use must be proven throughout the territory of the European Union. This does not require the proprietor to produce evidence for each Member State. The proprietor may, for example, argue that it has grouped the distribution network of several Member States or has treated several Member States as if they were one and the same national market for marketing strategy purposes. Likewise, possible cultural or linguistic proximity between several Member States allows the proprietor to argue that the relevant public of a Member State has sufficient knowledge of the products and services in an affiliated Member State, and as a result, evidence for only one of those Member States has to be produced.
The General Court ruled that a large part of Adidas' evidence (e.g. images and press clippings) related to non-equivalent trade marks. For example, the Court considered a sign with white stripes on a black background (instead of black stripes on a white background) as a non-equivalent sign. Adidas was able to present impressive figures on its turnover and marketing and advertising expenditure, but according to the General Court it failed to prove that these figures specifically related to the trade mark in question.
Adidas also submitted market surveys of certain Member States, but the Court held that Adidas did not sufficiently prove that these surveys were applicable cross-border for the public of other Member States.
As Adidas failed to prove acquisition through use, the General Court upheld the decision of the EUIPO's Board of Appeal. This judgment sends a clear message to all proprietors that any claimed evidence of acquisition through use is to be assessed restrictively.