A recent ruling by the High Court of England and Wales in a trademark lawsuit will have significant implications for how retail and consumer goods manufacturers use location trademarks to protect their brands and designs.

This judgment is particularly important for the retail and consumer goods industries, as non-traditional trademark registrations, such as location trademarks, serve as valuable tools for brand owners to expand their registered rights.

The Case

The lawsuit involved luxury fashion brand Thom Browne and sportswear giant Adidas. Adidas is known for its iconic "three-stripes" logo, which appears on all Adidas sportswear, footwear, and accessories. The company holds several registered trademarks in the UK, some of which are location trademarks. These trademarks protect the three stripes placed on specific parts of its products, such as along the sleeves, legs, or outer body of garments.

Thom Browne, known for using a four-stripe pattern across much of its clothing, challenged Adidas' location trademarks. The four-stripe design consists of four equally spaced, evenly sized horizontal stripes, typically asymmetrically positioned on the left sleeve or left leg of garments.

Initially, Thom Browne used a three-stripe design. In 2007, Adidas raised objections in communications, and in response, Thom Browne added an additional stripe.

Thom Browne filed a lawsuit seeking to cancel Adidas' 16 location trademarks, arguing that these trademarks lacked the required clarity, precision, and distinctiveness necessary for registration, or should be canceled due to non-use. In a counterclaim, Adidas accused Thom Browne’s four-stripe design of infringing its location trademarks.

The Court's Ruling

The primary challenge to the validity of Adidas’ trademarks was that they were not clear, precise, or specific enough to be registered. Thom Browne argued that the trademark descriptions in the register, along with the illustrations used, covered a wide range of possible visual variations, which implied Adidas' attempt to monopolize different colors, widths, lengths, positions, and stripe arrangements, thus blurring the line between decorative elements and the original logo.

The High Court ruled that the existence of multiple possible variations or arrangements of a trademark does not necessarily render it invalid. The court stated that only variations that affect the trademark’s ability to communicate clear and accurate information to the registrant, competitors, and the relevant public, as well as its ability to indicate the origin of goods and allow consumers to identify the same products again, would invalidate the trademark.

The judge applied this reasoning to the facts of the case, ruling that eight of Adidas' 16 location trademarks involved “variations of the logo beyond any permissible level of variation.” For instance, one trademark was described as "three equal spaced stripes… applied to the exterior of the goods, extending basically the entire length along the sleeves, legs, and/or outer surface of the torso."

The illustration accompanying this description showed a sports jacket with three stripes extending from the top of the sleeve to the cuff. The court found that this description, along with the illustration showing "basically the entire length," did not clarify the starting and ending points of the stripes, nor what the design would look like if placed on other parts of the garment, such as the legs or torso. Furthermore, the use of “and/or” meant the three stripes could appear on both the sleeve and torso of a garment, but the design did not clarify what that would look like, or what “basically the entire length” meant in this context.

The judge rejected Adidas’ argument that any uncertainty could be resolved by giving the registry, commercial operators, and ordinary consumers a degree of common sense. The court stated that Adidas could have chosen more precise wording to describe the trademark or applied for different trademarks, including illustrations showing the design on specific types of clothing, but had failed to do so.

The judge also applied similar reasoning to Adidas' other seven location trademarks (on sports tops, pants, vests, and bags), determining that these trademarks lacked clarity and accuracy and should not have been registered. All eight trademarks were declared invalid.

Furthermore, some of Adidas' other trademark registrations were partially revoked for lack of actual use in the specified goods and services.

Adidas' Counterclaim

Adidas’ counterclaim for trademark infringement was entirely rejected. Adidas argued that the similarity between its trademarks and Thom Browne’s four-stripe designs on 24 garment samples created a real risk of consumer confusion.

However, the court disagreed, finding that the differences in the direction, thickness, proportions, and number of stripes meant that there was either minimal or no similarity between Adidas' three-stripe design and Thom Browne’s four-stripe pattern. Location trademarks are relatively rare, and until now, only a few judgments have required judges to assess whether location trademarks were infringed. The judge ruled that the location of the stripes was a "decisive feature" of the location trademarks, meaning that when evaluating similarities, the differences in direction (horizontal, vertical, diagonal) and position of the alleged infringing mark should not merely be considered as background factors but must be seen as distinguishing factors between the two designs.

The judge also found that there was no likelihood of consumer confusion. Adidas’ argument relied on post-purchase confusion, rather than confusion at the point of purchase. The court noted that in real, representative scenarios where consumers encounter the goods, the overall impression of the four-stripe design eliminated any possibility of confusion. The judge believed that the average consumer would be able to distinguish between the three-stripe and four-stripe designs, as well as the differences in the appearance, width, and spacing of the stripes.

Implications of the Ruling

The judgment provides useful commentary on the assessment of the likelihood of confusion in trademark infringement cases. Adidas emphasized the distinctive character of its three-stripe logo, claiming the public had become accustomed to associating the three stripes with the company. However, this argument ultimately worked against Adidas, as the judge concluded that consumers were clear that other stripe designs were not Adidas. In other words, the more unique the trademark, the lower the likelihood of confusion.

The judge also found the flexibility of allowing various changes or arrangements to be beneficial. This avoids the need for manufacturers to register a new trademark every time they release a new line of clothing, accessories, or other product categories.

While the ruling did not find any infringement by the competitor, it should not discourage brand owners from properly promoting the unique nature of their brand identity to consumers. To maintain location trademarks, it is often necessary to provide evidence of distinctiveness, which will help avoid actual confusion. Location trademarks can be particularly useful when combating counterfeit goods, as counterfeit products may rely on unregistered rights when they do not use word marks or logos. However, it is important to take note of the required specificity and certainty in location trademark applications to avoid invalid registrations.

An appeal hearing for Adidas regarding the revocation of the eight trademarks due to lack of clarity and accuracy is scheduled later this year.