adidas fails to obtain injunction against importer of four-striped shoes

In adidas-Salomon v Yassin (CC (TA) 2177-05, December 13 2010), the Tel Aviv District Court has rejected adidas-Salomon’s request for an injunction against an importer of shoes bearing four stripes, finding that there was no likelihood of confusion with adidas' well-known three-stripe mark.

A shipment of imported shoes bearing four diagonal stripes and the name Sydney was detained by the Customs Authority due to the alleged infringement of adidas' rights. adidas rejected the importer’s proposal to release the goods after adding a fifth stripe or covering the stripes with an 'X'. adidas sued the importer, requesting destruction of the goods, accounting, damages and an injunction preventing the importer from using four diagonal stripes on the shoes.

adidas’ claim was based on:

• infringement of its well-known registered mark, which consists of three diagonal stripes on a shoe; and
• other grounds including dilution, passing off and unjust enrichment.

The defendant argued that the use of four stripes did not infringe adidas' three-stripe mark, due to, among other things, the presence on the market of two and four-striped shoes by other manufacturers. The defendant claimed that there was no risk of consumer confusion given the presence of the name Sydney, which was prominently placed, and the low price of the shoes.

The Tel Aviv District Court analysed the limits of trademark protection in light of its traditional rationale of preventing consumer confusion as to source. It went on to discuss the issue of whether established marks should be protected even in the absence of consumer confusion and unfair competition (it initially focused on confusion and subsequently extended its analysis to dilution). The court considered, among other things, the potential closure of the public domain and prejudice to free competition that would result from expanding trademark protection.

The court asserted that such protection applies only in case of consumer deception and unfair competition - namely, where a party seeks to free ride on another's goodwill, even absent confusion.

Based on such policy considerations, the court held that adidas, as the owner of the three-stripe mark, should not be granted a monopoly over the use of diagonal stripes on sport shoes in general: such monopoly, in the absence of a likelihood of confusion, would unduly prejudice competition, especially on the part of small businesses, and encroach upon the public domain. The court emphasised the importance of non-branded, low-priced products remaining available, even where there is was an association with higher-end goods, as long as there is no confusion and no unfair competition. It noted that stripes were, by nature, weak marks and that their protection from dilution should not extend to similar marks.

On the facts of the case, the court found that the defendant's four-striped, low-priced shoes, which prominently displayed an unrelated trade name and were intended for the lower-end market, were unlikely to cause consumer confusion under the three-pronged confusing similarity test. Therefore, the defendant had not engaged in unfair competition or attempted to free-ride on adidas’ reputation. The court further held that the defendant’s conduct did not constitute passing off, unjust enrichment or dilution of adidas’ mark. adidas’ claim was thus dismissed, and the goods were ordered to be released.

The court ordered adidas to pay costs of IS85,000, in addition to the costs arising from the detention of the goods.

David Gilat and Sonia Shnyder, Gilat Bareket & Co, Reinhold Cohn Group, Tel Aviv