THE FASHION LAW EXCLUSIVE - Things are heating up even further in the battle between adidas and Forever 21. The two made headlines in August 2015 when adidas filed suit against Forever 21, alleging that the Los Angeles-based fast fashion retailer had infringed its 3-stripe trademark by making and selling garments that bore three stripe graphics.
The parties settled that suit in early 2016 but then found themselves on opposite sides of a new lawsuit this past March when Forever 21 filed a declaratory judgment action against adidas, asking a federal court in California to declare that it was not infringing adidas’ marks. Forever 21 asserted that it received “a letter dated February 24, 2017, [in which] Adidas’s counsel … threatened to sue Forever 21 over its use of stripes on six items of clothing.”
Forever 21 further claimed that it has repeatedly “fallen victim to Adidas’s threats [of trademark infringement litigation] … Since 2006, Adidas has commenced a pattern of complaining about striped apparel sold by Forever 21, and it has steadfastly increased its threats to encompass virtually any item of clothing with decorative stripes.”
Painting the German sportswear giant as an overly-aggressive enforcer of its 3-stripe marks, Forever 21 asked for a declaration from the court that its use of stripes on apparel designs does not infringe or dilute the German sportswear giant’s three-stripe trademark. This move comes on the heels of an array of recent trademark infringement-related lawsuits (and opposition proceedings) initiated by adidas, including matters filed against Shoe Branding Europe, Futbol Club FC Barcelona, Italian fashion brand Bally, fellow footwear brand ECCO, Skechers, Marc Jacobs, and Elon Musk's Tesla, among others.
On March 7, just days after Forever 21 filed its declaratory judgment lawsuit, adidas filed a trademark infringement lawsuit against the retailer in federal court in Portland. Interestingly, the complaint was filed under seal, meaning that it is shielded from the view of the public. However, we do know that it is, in fact, a trademark infringement matter.
Still yet, on March 13, Forever 21 moved to voluntarily dismiss its declaratory judgment suit against adidas, not because the parties settled but as more of an administrative move. According to the Notice of Voluntary Dismissal Without Prejudice in that case, “On March 7, 2017, following Forever 21’s filing of this action, Adidas filed a related action in the U.S. District Court for the District of Oregon. Forever 21 intends to pursue its request for declaratory judgment as a counterclaim in the Oregon action.”
As for why adidas filed its latest suit under seal, there are various forms of confidential information that litigants, such as adidas, may seek to shield from the public record. For example, in the commercial context, the courts address requests concerning documents or information that would divulge the “secret” aspects of intellectual property, such as patent filings or proprietary business processes.
Additionally, privacy issues often arise where litigants have previously availed themselves of private dispute resolution forums such as arbitration or are subject to a confidential settlement agreement, the latter of which may be at issue here given the parties’ initial suit and settlement.
Neither party's counsel opted to comment at this time, telling TFL that they do not comment on pending litigation.
UPDATED (7/18/2017): The court has since unsealed adidas' complaint, which alleges that in addition to selling its own merchandise with allegedly infringing stripes designs, Forever 21 has offered “repurposed Adidas” products on its website, including women’s athletic pants and shorts, which Adidas alleges are counterfeit products.
“Neither the infringing apparel and footwear nor the counterfeit apparel is manufactured by Adidas, nor [are] either of them connected or affiliated with, or authorized by, Adidas in any way,” the company said in its complaint. “The infringing apparel and footwear and counterfeit apparel imitates Adidas’s three-stripe mark (and, in the case of the counterfeit apparel, the Adidas wordmark and the badge of sport mark) in a manner that is likely to cause consumer confusion and deceive the public regarding their source, sponsorship, or affiliation.”
* This case is Adidas America, Inc. et al v. Forever 21, Inc., 3:17-cv-00377 (D. Or.).
This article was initially posted on May 3, 2017.