General Court confirms invalidity of (one of the) adidas three-stripe mark(s)

Earlier today, the General Court (GC) issued a keenly-awaited ruling (T‑307/17), in which it upheld the earlier decision of the EUIPO Second Board of Appeal (R 1515/2016-2), and found this three-stripe EU trade mark (EUTM) owned by adidas:

invalid. In a nutshell, the GC found that:

• The trade mark at issue would not be a pattern mark, but an ordinary figurative mark; 
• The forms of use, eg colour scheme, of said trade mark should not to be taken into account; and 
• adidas failed to prove acquired distinctiveness throughout the EU.

Let's see more in detail how the court reasoned.

Background

In 2014. adidas obtained an EUTM for the sign represented above, described as consisting of "three parallel equidistant stripes of identical width, applied on the product in any direction" for goods in Class 25 of the Nice Agreement.

Also that year, Shoe Branding Europe filed an application for a declaration of invalidity of the EUTM pursuant to what is now Article 59(1)(a) EUTMR, in conjunction with Article 7(1)(b) therein.

In 2016, the EUIPO Cancellation Division granted the application and held adidas's EUTM invalid due to lack of distinctive character, both inherent and acquired through use.

adidas appealed and, while it did not dispute the lack of inherent lack of distinctiveness, it submitted that its EUTM had acquired distinctiveness through use. The appeal was rejected, and adidas brought the matter before the GC.

Unjustified dismissal of some of the evidence

adidas submitted that the EUIPO Board of Appeal had unduly dismissed evidence on the ground that said evidence was related to signs other than the mark at issue. According to adidas, by doing so the Board both misinterpreted the mark at issue and misapplied the ‘law of permissible variations’. 

Misinterpretation of the mark at issue: a 'surface pattern'?

With regard to the former, adidas argued that the Board had incorrectly assumed that the mark at issue was only claimed in specific dimensions and, in particular, in a specific ratio of height to width. Instead, the Board should have treated it as a surface pattern that may be reproduced in different dimensions and proportions depending on the goods on which it is applied. 

The GC disagreed with adidas, and noted how the EUIPO can only consider what is set out in the application for registration and any description provided of said sign. Also recalling the well-known Sieckmann decision, the GC noted how

it is for the trade mark applicant to file a graphic representation of the mark corresponding precisely to the subject matter of the protection he wishes 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 court also noted that the EUTM had been registered as a figurative mark, and that no indications were provided that it should be intended as a pattern mark. This 'classification' means that, in principle, registration is in the proportions shown in the relevant graphic representation. This conclusion cannot be questioned by rulings like Apple [Katpost here]:

That judgment merely states that a design may be registered as a trade mark, even though it bears no indication of the size and proportions of the object which it represents. However, that judgment does not imply that a mark may be registered without defining the proportions of the sign itself.

Misapplication of the ‘law of permissible variations’

Turning to the alleged misapplication of the ‘law of permissible variations’, that is the possibility of using a mark with variations that do not affect its distinctive character, the Board had considered that:

• where a trade mark is extremely simple, even a slight difference could lead to a significant alteration to the characteristics of the mark as it had been registered; 
• use of the mark at issue in the form where the colour scheme is reversed necessarily alters the distinctive character of that mark;
• some of the evidence showed a sign with two instead of three stripes and; 
• the use of sloping stripes altered the distinctive character of that mark.

The Board had considered the following as examples of evidence that failed to show genuine use of the mark at issue:

The GC sided with the Board and concluded that this had rightly dismissed the images above on the ground that they were related to signs other than the mark at issue. Consequently, no infringement of the ‘law of permissible variations’ had occurred.

Error of assessment regarding the acquisition of distinctive character through use

adidas also claimed that the Board had erred in finding that the applicant had not shown that the mark at issue had acquired distinctive character as a result of the use which had been made of it within the EU.

The court noted at the outset that:

in order to demonstrate that the mark at issue has acquired distinctive character, the applicant cannot rely on all of the evidence which shows a mark consisting of three parallel equidistant stripes. Indeed, it follows from the answer to the first part of the plea in law 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.

It then recalled the principles established in earlier case law re acquired distinctiveness, and reviewed the evidence submitted by adidas. The court noted that it follows from the unitary character of the EU trade mark that, in order to be accepted for registration, a sign must have distinctive character, inherent or acquired through use, throughout the EU.

This does not mean that proof is required for each individual Member State. However, "the evidence submitted must be capable of establishing such acquisition throughout the Member States of the European Union".

In this case, the only evidence which is, to some extent, relevant were 5 market surveys completed in only 5 Member States. This was deemed insufficient to prove acquired distinctiveness throughout the EU.

Comment

Is this the end of the adidas three-stripe trade mark(s)? Of course not. Not only does adidas own several three-stripe marks [just check the EUIPO database for EU registrations] which are not affected by today's ruling, but the decision might be appealed one last time to the Court of Justice of the European Union. The last word is thus yet to be told.

In any event, today's ruling is a useful reminder that the 'law of permissible variations' is not limitless and must be applied having specific regard to the mark at issue. In addition, evidence serves indeed to prove something: parties must be careful about the type that they submit, no matter how well-known the sign at issue is perceived to be. Though in a different context, readers might in fact remember that not long time ago another arguably well-known trade mark, McDonald's BIG MAC, suffered from problems of poor evidence. The result was that:

an overall assessment of the evidence does not allow the conclusion, without resorting to probabilities and presumptions, that the mark was genuinely used during the relevant period for the relevant goods or services