Following a nearly 25-year-long fight, H&M has landed the final win in the trademark lawsuit that adidas filed against it in the Netherlands back in 1997 in connection with its sale of blue, marigold, and rust-hued athletic wares emblazoned with two parallel vertical stripes on the sleeves of t-shirts and the sides of shorts and pants legs. On the heels of a win in January when the Hague Court of Appeal pointed to the differences between the two parties’ usages of stripes, and held that H&M did not infringe Adidas’ three-stripe logo by way of its two-stripe apparel, the Dutch Supreme Court dismissed adidas’s appeal and ordered it to pay the H&M’s costs in connection with the cassation proceedings.
In its October 8 opinion, the Dutch Supreme Court shot down adidas’s bid to appeal the findings of the Hague Court of Appeal without elaborating on the reason for its decision, and thereby, finalizing the January 28 outcome. This brings an end to the long-running case between the two parties, which has been making its way through European courts since the late 1990s.
At the heart of adidas’s suit was its argument that Defendants H&M, Marca Moda, C&A, and Vendex infringed its Benelux trademark registrations, as their use of stripes on clothing was likely to confuse consumers about the source of the non-adidas products. In response, H&M and the other defendants claimed that the stripes on their clothing were not meant to serve as trademarks and indicate the source of the clothing in the same way as a brand name or traditional logo. Instead, they asserted that their use of stripes was purely decorative, and thus, protected against infringement liability, particularly as certain common signs, including striped patterns, should be available for anyone to use in a decorative capacity.
Adidas’s suit would turn out to be anything but an open-and-shut infringement case; it would take the form of a lengthy battle, one that has forced Dutch courts – as well as the European Union’s highest court, the Court of Justice (“CJEU”) – to help determine whether the sportswear company can legally bar H&M and other retailers (the latter of which ultimately ended up settling out of court, leaving H&M as the sole defendant) from using “identical or similarly” striped marks on their apparel offerings.
Following several rounds before lower courts in the Netherlands (the first of which, the District Court in Breda, sided with adidas and ordered the fast fashion brand to stop selling the stripe-bearing clothing at issue), the Dutch Supreme Court looked to the CJEU for guidance. The CJEU was tasked with a technical question: should H&M’s argument about the requirement of availability of generic patterns be taken into account when “assessing the scope of protection of a trademark that is inherently non-distinctive or descriptive, but registrable as a result of distinctiveness acquired through use”?
In an April 2008 decision, the CJEU sided with adidas. The court concluded that while a trademark holder cannot prohibit a third party “from using descriptive indications in accordance with honest practices,” H&M’s argument that common patterns must be available to all retailers is not one of the relevant factors that should be taken into account in the assessment of the likelihood of confusion, which is the core element in a trademark infringement inquiry. “The answer to that question,” the court held, “must be based on the public’s perception of the goods [bearing adidas’s trademark] on the one hand and the [defendants’ striped] goods on the other.”
The court did not decide “whether the average consumer may be mistaken as to the origin of [H&M’s] sports and leisure garments featuring stripe motifs in the same places and with the same characteristics as the stripes motif of adidas.” That would be for the lower court to determine.
Speaking at the time, adidas’s associate general counsel Tim Behean revealed that at least some of the danger in H&M’s striped offerings stemmed from the fact that adidas’s three-stripe trademark is one of the most famous marks in the world. “The thing about famous trademarks is that they make strong images in people minds,” he told the New York Times, “but when consumers see imitations without the ability to compare products side by side, there is a resonance, there is a recognition: ‘Oh, is that Adidas?’“
Back before the district court for The Hague in November 2017, adidas landed another win in its fight over stripes. According to the court, its use of a two-stripe design infringed on adidas’s three-stripe mark, which it stated is a well-known trademark among a significant portion of the consuming public.
The court’s decision was significantly criticized at the time by brands and lawyers, alike, with Baker & McKenzie lawyer Michael Hart, for instance, telling the New York Times that “the seriousness of this issue is that with a ruling like that there may be companies that put a stripe or two stripes and get a warning letter from adidas and don’t have the resources or will to get involved in a legal battle.” A spokesman for adidas asserted, however, that the company was “not seeking 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 trademark.”
As for the duration of adidas’ victory, it was relatively short-lived. In light of an appeal by H&M, The Hague Court of Appeal overturned the decision in January of this year. According to the court, initially adidas sought to prohibit “the use of two color-contrasting parallel vertical stripes.” In response to push back from H&M, which argued that such a prohibition was too broad, adidas amended this so that it only claimed the right to prevent “the use of stripes of equal width that run parallel to each other at a distance that visually looks more or less as wide as the width of the stripes themselves.”
With this in mind, the appeals court held that it is “of the opinion that H&M has not infringed [adidas’s mark] by way of its ‘Work Out’ clothing.”
More than that, the court stated that the results of market research reports produced in connection with the case “are not sufficient reason to assume that there is a likelihood of confusion” among consumers as to the source of H&M’s striped apparel. One report, for instance, which was provided by H&M (and contested by adidas) revealed that “only 10% of [the consumers who were surveyed] named adidas after [viewing] H&M’s [striped] Work Out clothing.”
With such a lack of consumer confusion in mind, and given that “there must be a real likelihood of confusion on the part of the average informed, circumspect and observant ordinary consumer of the goods or services in question, in this case, now that it concerns (sports) clothing, the general public, The Hague Court of Appeal sided with H&M and has ordered adidas to pay €80,745 to cover the retailer’s legal costs for a portion of the proceedings.
The Dutch Supreme Court decision brings the case to an end. Although, it is hardly the only stripes-centric case currently underway for adidas. The brand is also in the midst of litigation with American fashion brand Thom Browne over its use of stripes. It is still facing off against Fashion Nova, as well, over the fast fashion brand’s use of stripes.