16.11.16

IP: The Adidas & FC Barcelona Trademark Dispute


FC Barcelona have found themselves locked in a trademark dispute with German sportswear brand, adidas, after the sportswear giant opposed FC Barcelona's trademark application with the US Patent and Trademark Office (USPTO).

What is a trademark?

A trademark is defined as being 'any sign capable of being represented graphically and which is capable of distinguishing the goods or services of one undertaking from those of other undertakings.' Trademarks can take a number of forms including logos, badges, phrases and distinctive patterns & designs, such as the five golden rings associated with the Olympics.

The registration of a trademark provides the owner with an enforceable property right regarding improper use. Any infringement of a trademark allows the owner to claim compensation from the infringer (usually the profits earned from the selling of goods) and request an injunction prohibiting them from further use of the trademark, along with handing over any counterfeit goods.

What is the purpose of a trademark?

The purpose of a trademark is to allow the consumer to associate the origin of a product, without any possibility of confusion. Its use on a product provides the consumer with a guarantee of its association, quality and originality. It prevents others from exploiting the reputation and success of the owner by using the trademark without the owner's consent.

Owners of trademarks are usually provided with two specific forms of protection - (1) prohibition of unauthorised copies of the owner's trademarks from being produced and marketed on goods and (2) attempts to confuse consumers by the use of a design similar to a registered trademark or by using a registered trademark on goods similar to those currently being produced by the owner, are prohibited.

What is the paramount consideration?

When considering any possible infringements, the paramount consideration should centre around any possible confusion that may arise, as a result of the product or mark. For example, could the public mistakenly believe that the product is 'official' by the display of a registered trademark or could the goods be associated with another brand, in error, as a result of inclusion of a registered trademark. 

The Adidas/Fc Barcelona Dispute - what is the problem?

Adidas claims the trademark that FC Barcelona has applied to register, and which consists of a square containing seven vertical stripes (the 1st, 3rd, 5th and 7th stripes from the left are blue and the 2nd, 4th, and 6th are garnet), is very similar to their famous 3 stripe mark (remember the protections afforded to trademark owners, discussed above, can include similar designs).


FC Barcelona registered the trademark in May 2015. When a trademark is registered and the application has been considered, notice is then intimated in an official gazette - this allows possible interested parties, such as adidas, the opportunity to pitch up and oppose the trademark on the basis that their own trademark is similar and allowing the registration to proceed could cause confusion and in turn, potentially damage the opposing brand's reputation.

In their opposition, Adidas states the following:-

"The Three-Stripe adidas trademark [Three-Stripe Mark] is well known and famous and has been for many years. It is particularly well known among professional soccer players, fans and consumers of soccer apparel ... Since introducing the Three-Stripe Mark (in 1952), adidas has spent millions of dollars promoting the mark and products bearing the mark.  As a result of adidas's extensive use and promotion of the Three-Stripe Mark, adidas has built up and now owns extremely valuable goodwill that is symbolised by the mark. The purchasing public has come to associate the Three-Stripe Mark with adidas."

FC Barcelona's seven-stripe mark is registered for use on a wide range of goods and services including flags, placards, clothing, stationery, footwear, headwear and sporting equipment. Adidas alleges that the trademark is strikingly similar to their 'Three-Strip Mark' both in appearance and commercial impression. Given that, they consider that FC Barcelona's mark is:

 "likely to cause confusion, deception, or mistake as to the affiliation, connection, or association of FC Barcelona with adidas, or the origin, sponsorship, or approval of [its] goods by adidas ... Consumers familiar with the footwear and apparel long associated with adidas' Three Stripe Mark are likely to assume that the goods in Class 25 (footwear and apparel) and Class 28 (sporting goods/equipment) offered under FC Barcelona's trademark originate from the same source, or that they are affiliated, connected, or associated with adidas ... any defect, objection, or fault found with FC Barcelona's products marketed under the FC Barcelona trademark necessarily would reflect on an seriously injure adidas's reputation."

As such, Adidas have asked the USPTO to reject FC Barcelona's application to register the seven-stripe trademark, citing its similarities to it's own already established mark. However, this is not the first time that adidas has taken on a heavyweight brand, in relation to trademark infringements. It has previously won cases against Marc Jacobs (4 stripes mark), Forever 21 (3-stripes), Sears Department Stores and Skechers (for selling similar designed foorwear). 

What is interesting about the Barcelona case, is that the kit partnership that Barcelona has is with Nike, arguably adidas' biggest competitor - especially when fighting it out for deals in the global football market. For example, Nike has just recently concluded a record-breaking kit deal with Chelsea FC - the previous Chelsea kit deal was with adidas ... You do the maths!

This case has yet to be concluded but it will be interesting to see what the USPTO decides. 

Other sporting trademark disputes

Arsenal

Arsenal won their trademark dispute in the early 2000s against an unofficial merchandise dealer who was selling unauthorised fan products, in particular scarves, bearing the logos and emblems of Arsenal Football Club, all of which were registered trademarks. The Court had initially doubted whether there was any infringement of the trademarks on the basis that the imprints and pictures were for decorative purposes only and implied no affiliation with the football club. The logos were not badges of origin, as described by the Act, but instead an interpretation of support, loyalty and fan affiliation with the club. 

Upon considering all the facts, the European Court of Justice ruled in favour of Arsenal Football Club. It held that such uses are only to be regarded as a trademark infringement if it impairs the interest of the trademark holder with respect to the functions of the trademark. Under the circumstances, the use of the signs and logos identical to the trademarks in question was capable of endangering the guarantee of origin and therefore, the main function of the trademark. Whether the trademark was used in a way where it was regarded as an expression of support or fan affiliation had no bearing, according to the Court.

Nike

Like adidas, Nike International produces sports good which it sells under the registered trademark, 'Nike'. This trademark is registered in Switzerland. In 1985, Nike International was contacted by a Spanish company called, Campomar, (who has 'Nike' registered in Spain, as a trademark, since 1984) who notified Nike International of its intention to produce a sporting perfume line under the name 'Nike', the sale of which would be handled by Quarz AG. Campomar asked if Nike International would be interested in partnering on the project but Nike declined.

In 1993, Quarz began the launch of 'Nike Sport Fragrance' cosmetics line in Switzerland and contacted Nike again about co-operation. Nike ruled out any co-operation and stated that it would not tolerate the use of it's trademark, 'Nike'. 

An injunction was sought under Article 15 of the Trademark Act 1993 (Switzerland). Under this provision, extra protections are afforded to 'famous trademarks' whereby the owner of a 'famous trademark' can prevent its use by others not only with respect to specific classes of goods but also for every kind of goods or services, if such a use endangers the distinctiveness of the trademark or exploits or impairs its reputation. 

The Court held that the majority of persons pursuing sports are aware of Nike International's trademark. It is one of the most demanded brands and one of the three most famous sport brands, globally. It enjoys excellent market reputation and it's advertising effect (which did not become famous by itself) does not only relate to sporting goods but other goods too. Although Campomar also holds the rights to the trademark 'Nike' that has existed for decades, in Spain, this is not likely to be known to the public in Switzerland. The Court also noted that Campomar was not disputing the fame that Nike International's trademark enjoyed. 

The Court concluded that it was obvious that Campomar would profit from the reputation of Nike International's trademark when selling the perfume aimed at sporting individuals. The idea of 'sport' could easily be transferred to a perfume line whose marketing also underlined the character of sporting activity. Given that, if Campomar were allowed to use the trademark, they would benefit from Nike International's advertising success and that is exactly what Article 15 aims to prevent.

IMPORTANT: This post is not intended to be a legal briefing, it is not intended to be a statement of the law and no action should be taken in reliance on it without specific legal advice.

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