Founded in 1949 in Herzogenaurach, Germany, the name of this German sportswear giant derives from the first syllables of the founder’s name, Adi Dassler. In the year of its founding, adidas’ also registered its three stripes as a trademark. Since then it has aggressively pursued litigation against companies worldwide for shoes and apparel that use more than one parallel stripe.
Last year alone, adidas accused the US Polo Association, fashion designer Ralph Lauren and Abercrombie & Fitch Co. before courts in the US of infringing the three stripe trademark with clothes and shoes with two stripe designs.
In January, the District Court of Cologne, Germany, ruled that Nike and German clothing manufacturer Tom Tailor had infringed upon adidas' three stripe trademark.
Adidas complained that two stripe designs by Nike and Tom Tailor were too similar to its three stripe trademark. In Nike's case two parallel stripes appeared stitched along the seam of workout pants, while in Tom Tailor's case two stripes were stitched along the sleeve of a jacket.
The court ordered Nike and Tom Tailor to discontinue selling the offending clothes and fined Nike with € 1 million and Tom Tailor with € 500,000 in damages (US$ 1.2m, 616,000).
In a statement, Nike spokeswoman Joani Komlos said the company was disappointed by the court's ruling and might appeal the decision. Tom Tailor’s CEO Michael Rosenblat stated that the court’s decision monopolizes the use of stripes in favor of adidas and limits the possibilities of fashion design.
Based on adidas’ record, both Nike and Tom Tailor should have known better.
It has been permanent jurisdiction in German courts since the 1970s that two, three and four stripe designs infringe adidas’ three stripe trademark. The distinctive mark enjoys a worldwide brand awareness of more than 90 percent. According to the German Federal Court of Justice, the public recalls and recognizes such well-known and distinctive brands rather than un-established marks. It is therefore likely that consumers associate and confuse signs with two, three or four parallel stripes with the adidas trademark.
The objection that the questionable stripe motifs are not used as trademarks, but merely for embellishment or decoration, is negligible. This is because the consumer is accustomed to view parallel stripes on apparel and shoes as evidence of origin and not as a simple design motif.
The European Court in Luxembourg confirmed this jurisdiction in 2003 in the case adidas vs. Fitness World Trading.
This basically means that the use of two, three and four stripe designs on apparel and shoes in the European Union will most likely infringe adidas’ trademark. Five stripe designs, on the other hand, are legitimate and have been used trouble-free by footwear company K-SWISS since 1966.
In the sporting goods industry, rivalry heats up and grows especially tense before big money events like February’s Olympic Games and this summer’s FIFA World Cup.
In a prelude to the 2006 Olympic Winter Games, Nike, Puma (founded in 1948 by Adi Dassler’s brother Rudolf), Reebok and the Pentland Group (Speedo, Ellesse) took legal action against adidas’ Olympic preferential treatment before the International Olympic Committee in Lausanne, Switzerland.
For more than forty years, the three stripes have appeared on athletes’ dress, while other logos were limited in size to 20 centimeters. This was because the three stripes were considered a design motif and not a logo, like the Nike swoosh or the Puma cougar.
Adidas’ competitors demanded that IOC president Jacques Rogge deprive the three stripes mark of its design status. The IOC deduced from the worldwide trademark registration of the three stripes that they should not be treated as a mere design motif anymore.
Hence, adidas now too is bound by the IOC’s Marketing Code of Conduct, which limits logos to a maximum size of 20 centimeters on an athlete’s shirt.
Last August adidas took over Reebok for approximately € 3.1 billion (US$ 3.8b), to attain a stronger position in the Nike-dominated North American market, where nearly 50 percent of all global sporting goods are sold.
But even the fiercest opponents sometimes share a common enemy.
The Aile Clothing and Shoe Company from Fujian, China, has stolen the best of both worlds by combining the three stripes with the swoosh on its shoes. Adidas has already sued the Aile Clothing and Shoe Company and two of its dealers before the Beijing First Intermediate People’s Court, demanding compensation in the amount of US$ 360,000. But in view of the nearly non-existent protection of intellectual property in China (a state the US and the European Union aim to change with the help of the WTO) it is very doubtful if adidas’ suit will be a success.