High Court decision will impact the way retail manufacturers protect brands and designs

This is a significant judgment for the retail and consumer goods sector as non-traditional trade mark registrations, such as position marks, are a helpful additional tool for brand owners to broaden their registered rights.

The proceedings concerned luxury fashion house Thom Browne and sportswear giant Adidas. The iconic identifier of the Adidas brand is a ‘three stripes’ logo which appears on all Adidas sports clothing, footwear and accessories. Adidas owns a number of UK registered trade marks for three stripes. Some are position marks where the protection is for three stripes appearing in specific places on its products, for example running along the length of the outer surface of the arms, legs or trunks of clothing.

Thom Browne is known for including a four-bar motif, known as the “four bar design”, on most of its garments. These are four equally spaced horizontal stripes of equal width usually appearing asymmetrically hooped around just the left arm or leg of a garment. 

Thom Browne had initially used three stripes. In 2007, Adidas had complained about that in correspondence and in response Thom Browne adopted an additional stripe.

Thom Browne issued these proceedings seeking to invalidate sixteen of Adidas’ registered position marks on the grounds that they lacked the required clarity and precision and/or distinctive character to be registrable, alternatively that they should be revoked for lack of genuine use. In a counterclaim, Adidas alleged that the four-bar design infringed its position marks.

Thom Browne’s primary attack on the validity of the Adidas marks was that the marks were insufficiently clear, precise and specific to be capable of registration as a mark. Thom Browne argued that the marks, as graphically represented on the trade marks register alongside the relevant wording used in the descriptions, claimed a wide variety of visually different permutations of three stripes. Thom Browne argued that this reflected a desire on the part of Adidas for a monopoly over the use of different colours, widths, lengths, positions and arrangements of stripes, enabling it to mix mere decoration with indication of origin. 

The High Court held that the mere fact that a mark includes a number of possible variations or permutations will not inevitably render it invalid. Only variations that affect the ability of the mark to convey clear and precise information to the registrar, economic competitors and the relevant public, and the ability of the mark to denote origin to consumers so that they can repeat the experience of a purchase, will not be permissible.

Applying that reasoning to the facts of the case, the judge held that eight of Adidas’ position marks involved a “multiplicity of signs which extended beyond any permissible degree of variation”. For example, one trade mark described the mark as consisting of “three equally spaced stripes... applied to the exterior of the goods the stripes running down substantially the whole length of the outer lateral surface of the sleeves, legs and/or trunks of the goods”.

This description was accompanied by an illustration of a tracksuit top with three stripes running down a sleeve, from the top of the sleeve to the cuff. It was held that this, taken together with the illustration “substantially the whole length”, gave no clarity as to where the three stripes should begin and end and there was no indication of how the mark would look if it appeared on the legs or trunks of garments. Furthermore, the use of “and/or” – “sleeves, legs and/or trunks of the goods” - contemplated the use of three stripes on both the sleeves and trunk of an upper garment but there was no illustration of what that might look like or what might be meant by “substantially the whole length” in those circumstances.

The judge rejected Adidas’ submission that any uncertainty could be resolved by “ascribing to the registrar, the economic operator and the average consumer an ability to have a dose of common sense”. It was found that “Adidas chose the words it used for this mark and could have chosen to employ a great deal more precision, alternatively to apply to register different marks encompassing illustrations of how each mark was to appear on particular garments. It did neither of these things”.

The judge applied similar reasoning to another seven of Adidas’ position marks for tracksuit tops, trousers, vests and bags holding that they lacked clarity and precision and should not have been registered. All eights marks in their entirety were invalidated.

Separately, other Adidas’ trade mark registrations were partially revoked to reflect lack of use across the specification of goods and services.

The counterclaim by Adidas for trade mark infringement failed entirely. Adidas argued that the similarities between its marks and the four bar design on 24 specimen Thom Browne garments was obvious, resulting in a real risk of confusion on the part of the average consumer.

The judge disagreed, holding that there was only low, very low, faint or no similarity at all between the Adidas marks and the four bar design due to differences in the orientation, thickness, proportion and number of stripes. Position marks are relatively rare and so there are only a handful of decisions to date in which judges have been called on to assess whether a position mark has been infringed. The judge held that the position is the “defining feature” of a position mark meaning that when assessing similarity, the different orientation- horizontal, vertical, diagonal -of the allegedly infringing sign and different position will not be merely context pointing away from infringement but “must” be treated as a point of difference.

The judge also held that there was no likelihood of consumer confusion. Adidas relied on post sale, rather than point of sale, consumer confusion but the judge stated that the overall impression of the four-bar design in the realistic and representative scenario in which consumers would encounter it ruled out any possible confusion. The judge was satisfied that the average consumer would generally be able to perceive the difference between three and four stripes and also between the appearance of stripes, their width and the distance between them.

The judgment includes useful remarks on distinctive character relevant to the assessment of likelihood of confusion. Adidas had placed great weight on the iconic nature of its three stripes and that the public had become accustomed to associating three stripes with the company. This argument ultimately worked against Adidas, however, as the judge found that consumers would be well aware that other striped designs were not Adidas. In other words, the more distinctive the mark the lower the likelihood of confusion.

The judge’s comments that a number of different variations or permutations is permissible is helpful. This avoids the need for manufacturers to register a new mark every time a new line of apparel, accessories or other goods is launched. 

There was no finding of infringement against a competitor in this case, but this should not deter brand owners from educating consumers appropriately as to the nature of their distinctive branding. Evidence of acquired distinctiveness is often needed to maintain position marks and will ultimately assist with avoiding actual confusion.  Position marks can be particularly useful when seeking to tackle counterfeit goods where reliance may otherwise fall upon unregistered rights where word marks or logos are not adopted.  The comments on the level of specificity and certainty needed in position mark applications should be noted however to avoid the risk of invalid registrations.     

The Court of Appeal is due to hear Adidas’ appeal against the loss of its eight trade marks for lack of clarity and precision later this year.