adidas victorious against importer of four-striped shoes

In late November 2012 the Finnish Supreme Court refused a request for leave to appeal in a trademark infringement case in which the Helsinki Court of Appeal had previously found that several shoe models bearing various patterns consisting of four stripes infringed adidas AG’s well-known three-stripe trademark. Accordingly, the Court of Appeal’s decision is now final.

The defendant, Donna Moderna Oy, had imported and sold 10,500 pairs of shoes bearing a diagonal pattern consisting of four stripes, which, in some cases, was accompanied by other designs, such as elliptical patterns or stitched lines crossing the four stripes. Many of the shoes came in a number of different colours. The Helsinki District Court ruled partly in adidas’ favour, finding infringement in relation to some of the shoe models, but rejecting adidas’ claims in relation to others. Both parties appealed to the Court of Appeal, seeking a ruling entirely in their favour.

While the well-known status of adidas’ three-stripe trademark was not contested by Donna Moderna, the parties took different views as to which elements of the shoes in question were relevant when comparing the signs. The Court of Appeal considered the proper test to be an overall assessment in which particular attention had to be paid to whether the four stripes on Donna Moderna’s various shoe models were perceived as a distinguishable and distinctive sign.

The Court of Appeal agreed with the District Court insofar as it had found that there was a likelihood of confusion in relation to some of the shoes, and upheld that part of the earlier ruling. Insofar as the District Court had rejected the claims, the Court of Appeal overturned the earlier ruling and found that there was a likelihood of confusion also in respect of the remaining shoes; therefore, it ruled fully in adidas’ favour on this point. According to the Court of Appeal, the four stripes on Donna Moderna’s shoes were perceived as an independent sign regardless of the various secondary patterns or different colours used on the shoes.

In addition to infringement by likelihood of confusion, the Court of Appeal also found that Donna Moderna’s four stripes took unfair advantage of the reputation enjoyed by adidas’ three-stripe trademark. In this regard, Donna Moderna argued “due cause” as a defence based on widespread use of similar patterns on the market, but this argument was rejected. The Court of Appeal also rejected Donna Moderna’s request to ask the Court of Justice of the European Union for a preliminary ruling on how to define the concept of 'without due cause' under EU trademark law.

The defence raised by the defendant, however, seemed to be part of the assessment of whether there was a sufficient link between the earlier well-known trademark and the later sign. The definition of the concept of 'due cause' appeared to be separate from this issue.

Since all of Donna Moderna’s four-striped shoes were found to infringe adidas’ trademarks, the Court of Appeal overturned the District Court’s decision on compensation and damages, and awarded a higher amount. The Court of Appeal decided that a reasonable compensation for using the infringing trademarks was to be calculated based on a 6% licence fee on the retail price of the shoes, amounting to a total of €22,050. The infringement of a well-known trademark would also, according to the court, typically result in additional damages due to, among other things, lost revenue and damage to the distinctiveness and reputation of the well-known mark. Based on the extensive reputation of adidas’ trademark and the extent of the infringement in this case, the Court of Appeal also awarded a total of €50,000 in additional damages.

Jukka Palm and Kristian Sjöblom, Berggren Oy Ab, Helsinki