In its judgment on Thursday, the Court said the requirement that certain signs should remain available to third parties cannot in general be taken into account when assessing the scope of the exclusive rights provided by a trade mark.
The ruling came in a long-running dispute, in which adidas is seeking to stop a number of retailers in the Netherlands from selling sports goods with two parallel stripes. adidas owns trade marks for three parallel stripes.
The retailers claim that they should be entitled to use two stripes on their goods for decorative purposes. However, they have not sought to invalidate the adidas marks.
The Court explained that Article 5(1) of the Trade Mark Directive sets out that the likelihood of confusion must be appreciated globally, taking into account all relevant factors. But it said: “The fact that there is a need for the sign to be available for other economic operators cannot be one of those relevant factors.”
The Court added: “The competitors of adidas cannot be authorised to infringe the three-stripe logo registered by adidas by placing on the sports and leisure garments marketed by them stripe motifs which are so similar to that registered by adidas that there is a likelihood of confusion in the minds of the public.”
The judges said that it is up to the national court to determine whether such a likelihood of confusion exists.
For marks with a reputation, Article 5(2) does not require a likelihood of confusion but merely a link in the minds of the public. However, the Court said that again the requirement of availability is not a relevant factor in determining this link: “The requirement of availability is extraneous both to the assessment of the degree of similarity between the mark with a reputation and the sign used by the third party and to the link which may be made by the relevant public between that mark and the sign.”
Finally, the Court said that Article 6(1)(b) prevents a trade mark owner from stopping others using purely descriptive indications. But “the requirement of availability cannot in any circumstances constitute an independent restriction of the effects of the trade mark in addition to those expressly provided for in Article 6(1)(b),” said the Court.
As the retailers claim that their two-stripe marks are purely decorative, they are not intended to indicate the characteristics of the goods, it added.
The dispute began in 1997 when adidas sued the retailers claiming that their two-stripe outfits infringed its three-stripes Benelux trade mark registration.
The District Court in Breda ruled in adidas’s favour and ordered the retailers to stop using the two stripes. H&M appealed to the Gerechtshof te ‘s-Hertogenbosch (Dutch Court of Appeal) in 1999.
In 2005, the Court of Appeal ruled that the trade marks were not infringed. This decision was appealed by adidas to the Hoge Raad der Nederlanden (Dutch Supreme Court), which stayed proceedings and referred the case to the ECJ.
The Hoge Raad asked the ECJ three questions regarding whether the requirement of availability is to be taken into consideration when assessing the rights of the trade mark owner and, if so, how the marks are affected.
Anne Putz, a spokeswoman for adidas, told Managing IP that the company welcomes the ECJ’s interpretation of the law. “It strengthens the protection of famous trade marks in Europe, and will benefit us in the protection of our famous three-stripes trade mark. In protecting our famous three-stripes trade mark, we do not seek to prevent the use of decoration, but the use of striped markings that confuse consumers, or cause them to make a link with our company and its famous trade mark,” she said. The company’s outside lawyer Gregor Vos, however, declined to comment before press time.
The case will now return to the Hoge Raad and it is expected to take at least two years for a final judgment to be made.
Clothing companies around Europe that those use stripes on garments could face future legal action if adidas is successful. Speaking to Managing IP, Daan De Lange, from the firm Brinkhof, who is representing Marca Mode and Marca in this case, said that he expects “this decision may very well frighten third party clothing companies”.
“The power of a trade mark owner to expand its scope of trade mark protection is now bordering on the unlimited.”
“I think overwhelmingly the feeling is that we are a bit disappointed with this decision. Objectively speaking, the judges have been more in favour of adidas than us and we feel that they didn’t fully take into account the background of the case,” he added.
De Lange argued that the two-stripe mark has been very common in sport clothing and even in formal wear, before adidas first filed its three-stripe trade mark in the 1940s. He also claimed that, when filing for the three-stripe trade mark, adidas had “tried to distinguish itself from the very two-stripe trade mark which they now feel infringes upon their mark”.
Gino van Roeyen from Dutch firm Banning, who is representing H&M, said that he and his client are “evaluating the court decision, because the ECJ touches a lot of complex issues, that need to be dealt with further in Dutch courts”.
Fiona McBride, trade mark attorney at Withers & Rogers, believes that this ECJ ruling brings adidas a step closer to a definitive decision about whether the use of two stripes can be regarded as a trade mark infringement.
“However, the onus is still on adidas to establish that in the mind of the public there is a link between the two marks,” she said.
