Shoe Branding Europe BVBA v. Adidas AG



Citation: Case C-396/15 P, 7 February 2016, CJEU

Court: The Court of Justice of the European Union


Facts of the Case

Shoe Branding Europe BVBA ("Shoe Branding"), a Belgian footwear company, wanted to register a trademark for a 2-stripe logo . Adidas AG ("Addidas"), a global sportswear company, already owned a trademark over a similar 3-stripes logo. The 3-stripe logo was first registered by the founder of Adidas, Adi Dassler, in 1949, on a football boot. The dispute began when Adidas initiated trademark opposition proceedings against Shoe Branding alleging that two of Shoe Branding’s pending European Union trademarks, having 2-stripe designs were confusingly similar to the 3-stripe design used by Adidas. Adidas demanded that the pending trademarks by Shoe Branding be denied registration status in the European Union.


Issues Raised

  1. Whether Shoe Branding Europe’s 2-stripe mark was deceptively similar to Adidas’ 3-stripe mark ?

  2. Whether the 3-stripe mark used by Adidas was distinctive in all regions of the European Union?


Laws Applicable

  • Article 8(1)(b) of the EU Trade Mark Regulation (EUTMR)

  • Article 8(5) of the EU Trade Mark Regulation (EUTMR)


Analysis


Initial conflict

Shoe Branding had filed a trademark registration application in 2009 to register a two-stripe mark positioned at the sides of a footwear. This application was opposed by Adidas on the grounds of similarity in the positions of the marks. But this opposition was dismissed by the Office for Harmonization in the Internal Market (OHIM) as well as the Board of Appeals in 2013. The dismissal was on the grounds that Adidas’ trademark was a vapid and ambiguous mark and therefore could enjoy protection only in a situation where the conflicting mark is identical or virtually identical. The Board was of the opinion that the differences between the positioning of the mark, number of stripes as well as its inclination was sufficient to differentiate Shoe Branding’s mark from Adidas’s mark and preclude the likelihood of confusion under Article 8(1) of CTMR (also known as the EUTMR). The primary reason was to ensure that Adidas does not take unfair advantage of the existing trademark laws. The Board emphasised that the Adidas trademark had acquired distinctiveness and was not inherently distinctive. The Court also observed that the criteria to determine ‘confusing similarity’ with respect to the impugned mark must be more stringent than the criteria used with respect to a unique trademark. The board applied the similarity test to determine the likelihood of confusion and concluded that the lack of similarity between the two marks were sufficient to dispel the likelihood of confusion which may arise among its intended audience. Accordingly, the Board granted trademark registration to Shoe Branding Europe for its two-stripe design which caused a consequential legal action initiated by Adidas.


Appeal to the EU General Court

Adidas appealed to the European Union General Court ("EUGC") in 2015 which, in its ruling, reversed the decision of OHIM and the Board of Appeals. EUGC in its ruling, deviated from OHIM’s ruling by elaborating as to why the stripes similar between the Shoe branding Europe’s mark and Adidas’ mark are relevant. The EUGC carried out a global assessment and concluded that the Board of Appeals was wrong in stating that the two marks were dissimilar. This conclusion was derived by placing relevance upon the elements of shape, size and position of the Adidas trademark. The Court concluded that the Shoe Branding Europe’s 2 stripe marks were similar to Adidas’ logo and therefore, the former’s use in the market may be detrimental to the sales of the latter due to the likelihood of confusion among the consumers. Based on this reasoning, it concluded that as per Article 8(1)(b) and 8(5) of the EUTMR, irrespective of the prospect of confusion, the reputation of the Adidas mark was strong enough to support a refusal of registration of Shoe Branding Europe’s trademark.


Appeal to the CJEU

Shoe Branding appealed against the decision of the EUGC to the Court of Justice of the European Union (CJEU) on the grounds that the two marks in contention have co-existed for decades without any evidence of confusion. The CJEU upheld the lower court’s initial decision and held that the differences between the two marks were not sufficient to affect the perception of the intended audience. Simultaneously, during this conflict, Shoe Branding also initiated a separate proceeding asking the European Intellectual Property Office (EUIPO) to hold that Adidas’ trademark is not a valid mark as it lacks source distinctiveness. The EUIPO in 2016 ruled against the validity of Adidas’ registered trademark.


Conclusion

The EUGC concluded the proceedings by citing the 2016 decision of the EUIPO which permitted the annulment of the Adidas trademark. This trademark was registered in 2014 for clothing, footwear and headgear. This annulment was made as Adidas had failed to prove that the three stripes logo, irrespective of its direction or positioning, had acquired a distinctive character throughout the European Union. EUGC in light of this previous ruling of EUIPO, concluded that the Adidas mark was not a singularly exclusive pattern but an “ordinary figurative mark” and therefore, was not protected under the trademark laws of the European union.

This trademark battle was one of the longest legal battles concerning the trademark law in the European Union. While Adidas is a well-known brand, the outcome of this case resulted in the EUIPO revoking the trademark protection granted to the Adidas 3-stripe mark. Thus, this case may be considered as the beginning of precedents set against the criteria of strictness used to grant protection to trademarks with acquired distinctiveness.



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