The simple math of adidas v Nike: Two stripes are not three stripes

There is no doubt that the threes stripes of adidas are a famous trade mark. The simplicity of the sign brings challenges and raises the questions of its scope of protection. The Higher Regional Court of Düsseldorf had to decide whether five different trousers from Nike with different stripe patterns infringed adidas’ three stripes pattern (I-20 U 120/23).

Background
 

adidas owns the German figurative trade mark no. 39912356 for the following sign:

It has been registered in 1999 inter alia for “trousers, in particular sports and leisure trousers including shorts”.

In 2022, a subsidiary of Nike (‘Nike’) offered the following trousers for sale in Germany:

Model 1:

Model 2:

Model 3:

Model 4:

Model 5:

adidas filed an application for a preliminary injunction against all five models with the District Court of Düsseldorf, which was granted. Nike appealed to the Higher Regional Court of Düsseldorf.

The Higher Regional Court’s decision

The Higher Regional Court upheld the appeal with respect to models 2 to 5 and rejected adidas’ claims. The judges dismissed the appeal with respect to model 1.

Likelihood of confusion re models 2 to 5

The main part of the decision deals with the question whether the use of the stripes on models 2 to 5 constituted use as a trade mark and did, therefore, affect the origin function of adidas’ trade mark, which is a prerequisite for finding a likelihood of confusion.

According to case law of the German Supreme Court, it is sufficient if a non-negligible part of the relevant public perceives the stripes as a trade mark. In the overall assessment, which must be conducted to determine the criterion of ‘use as a trade mark’, the typical use of trade marks in the relevant sector is decisive.

The judges held that on clothing, the perception of a sign as an indication of the commercial origin or as decorative depends on the type and placement of the sign. Pictures, motifs, symbols and words on the front and the back of articles of clothing are not generally perceived to be indictors of origin. Signs on a label inside the clothes, however, will in principle be understood as trade marks.

The Court acknowledged that adidas has commonly been using its three stripes on the side of clothing and that, due to this practice, the general public is likely to perceive such stripes as a badge of origin. However, this does not mean that consumers would understand each and every stripe pattern as a trade mark, regardless of its specific design and other design elements of the piece of clothing at issue. The Court found that the average consumer is aware that other sports and leisure clothing manufacturers use stripes or stripe patterns along the outer seam of trousers as decorative elements. Also, jeans and trousers of uniforms of the Bavarian police have stripe patterns on the outer seam. For these reasons, the specific design of the stripe pattern had to be taken into account.

With respect to models 2 to 4 (which only have two stripes), the Court found that an additional (word or figurative) trade mark, such as the Nike Swoosh, will not generally exclude the stripes’ perception as an indication of origin. However, an additional trade mark, which is clearly perceptible as such, will cause consumers to doubt that the stripe pattern is a trade mark. The clearer the additional trade mark is perceptible and the greater the pattern differs from adidas’ trade mark, the less likely consumers will perceive the stripe pattern as an indicator of origin.

The judges found that, due to the clearly visible Nike Swoosh and the low degree of similarity between adidas’ trade mark and Nike’s stripe pattern (two vs. three stripes and smaller distance between the stripes in Nike’s pattern), consumers would not perceive the latter as an indication of origin. As a consequence, the use of the stripe pattern did not affect the origin function of adidas’ trade mark.

With respect to model 5, the Court found that the stripes would be understood as decorative because of their differing colours and their close proximity. The outer stripes encompassed the stripe in the middle. adidas’ argument that it also uses its stripes in different ways, which includes varying colours and broadness, was rejected as not sufficiently substantiated because adidas only provided a few examples.

Even though the average consumer is aware that trade mark owners may use their signs in an altered way, the alteration on Nike’s trousers led to a different overall impression.

Likelihood of confusion re model 1

With respect to model 1, the Higher Regional Court found that it created a likelihood of confusion.

The inherent degree of distinctiveness of adidas’ trade mark was deemed to be low because of its simplistic nature. The judges found the trade mark to be well-known for sports and leisure trousers due to long-standing intensive use.

Model 1 and adidas’ trade mark were considered to have a low degree of visual similarity. They consisted of three stipes contrasted against the background. The different colours (black and white vs. blue and violet) were not decisive because the scope of protection of black and white trade marks usually covers their use in colours. The fact that the centre stripe was broader than the outer stripes would not be noticeable even from a short distance. Overall, model 1 created the impression of having a stripe pattern sufficiently similar to adidas’ trade mark.

Because of the similarity of the stripes with adidas’ trade mark, a non-negligible part of the relevant public would perceive the stripes as an indication of the commercial origin.

Due to the increased distinctiveness of adidas’ trade mark and identical goods, the low degree of visual similarity was deemed sufficient to create a likelihood of confusion. Consumers could believe that model 1 came from adidas.

Trade mark with a reputation re models 2 to 5

The judges rejected adidas’ claims based on a trade mark with a reputation with respect to models 2 to 5. They found that the relevant public would not establish a link between the stripe patterns on models 2 to 5 and adidas’ trade mark.

According to the Adidas-Salomon and Adidas Benelux judgment of the Court of Justice of the EU (case C-408/01), the fact that a sign can be perceived as ornamental or decorative does not exclude claims based on a trade mark with a reputation. However, the Court held that if consumers only understand the sign as a decoration, they will not establish a mental link with the reputed trade mark.

Comment

The judges of the Higher Regional Court of Düsseldorf reached a different conclusion than the judges of the German Supreme Court in their 2000 decision Drei-Streifen-Kennzeichnung (I ZR 21/98). There, the German Supreme Court held that there can be no doubt that consumers perceive the following stripe patterns as indications of origin because of the significant reputation of adidas’ trade mark:

Does adding another reputed trade mark, which may not be visible from all angles, really change this perception? adidas’ trade mark is probably no less well-known today than it was 20 years ago.

The Higher Regional Court’s decision was rendered in preliminary injunction proceedings, where no appeal to the German Supreme Court is possible. If the decision stands, it would be fair play to use two stripes on the outer seam of trousers as long as another trade mark is clearly visible and used in close proximity. This would weaken the distinctiveness of adidas’ three stripes pattern significantly. It seems likely that adidas will try to overturn the decision before a different court in Germany. If they do, we will report it.