Four-stripe designs on footwear held to be deceptively similar to adidas’ three-stripe mark

In adidas AG v Pacific Brands Footwear Pty Ltd (No 3) ([2013] FCA 905, September 12 2013), the Federal Court of Australia has held that certain four-stripe designs used by the respondent on its footwear were deceptively similar to adidas’ well known three-stripe trademark. The court also held that certain other four-stripe designs were sufficiently dissimilar so as not to infringe adidas’ three-stripe mark.

adidas has sold footwear bearing its three-stripe trademark in Australia since 1957. The court accepted that the three-stripe mark had been extensively promoted including through the sponsorship of high-profile sporting athletes and teams such as David Beckham, the New Zealand All Blacks rugby union team and many prominent Australian athletes. It was common ground that the three-stripe mark was “very well-known or famous” in Australia.

Between 2006 and 2010 Pacific Brands sold a range of footwear with four-stripe designs. When sued by adidas for infringement, Pacific Brands argued that its four-stripe designs, depicted in various styles and groupings, did not constitute “use as a trademark” within the meaning of the Trademarks Act 1995. It also argued that, in any event, its four-stripe designs were not “deceptively similar” to adidas’ three-stripe trademark.

As to the first issue, Pacific Brands asserted that its four-stripe designs were merely decorative elements and/or functional and hence were not being used as a “badge of origin”. On this point, the court thought that the appropriate question to ask was “whether the impugned [four-stripe designs] would appear to consumers as possessing the character of the brand”.

In answering this question, the court accepted that the stripes on the respondent’s shoes had a decorative element but agreed with adidas’ submission that there is no strict dichotomy between one function (such as decoration) and their function as a badge of origin. Furthermore, the court also accepted that there might still be trademark use even though another trademark or brand is also used in addition to the impugned trademark. For these reasons this aspect of the defence was rejected.

The second issue was whether the four-stripe designs were “deceptively similar” to adidas’ three-stripe trademark. The legal principles are well known and the court went on to consider each of the respondent’s nine four-stripe designs in turn. The decision was therefore based on its own facts and, as the court observed: “[this] issue is a question never susceptible of much discussion: it depends on a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs.”

That said, the decision provides useful indicative guidance when comparing design marks in the context of an allegation of infringement.

Of the nine contested designs, the following six were held not to be deceptively similar to adidas' three-stripe trademark:

Although the court’s reasoning differed in emphasis from shoe-to-shoe, the underlying analysis was that these shoes incorporated features that “substantially modify what a person in the market place would take from the impression based on recollection of [adidas'] trademarks”.

However, the following three designs were held to be deceptively similar:

Again, the court’s reasoning was based on a shoe-by-shoe analysis, but the consistent theme was that the use of these three designs resulted in “a real, tangible danger of confusion occurring, beyond a mere possibility, and a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source”.

Julian Gyngell, Kepdowrie Chambers, Australia