The 2020s are gearing up to be an exciting era for the world’s second largest clothing retailer, H&M. In January alone, the group undertook an unprecedented shake-up of its board and made the appointment of its first female chief executive. In 2020, we will see the fewest new H&M stores opening in decades (only 25 additions to the existing 5,076), as the Swedish fast-fashionista rolls up its sleeves to tackle digital growth.
On the legal front, H&M triumphed in January against Adidas in its long-running trade mark dispute about Adidas’ eminent three-stripe logo. After 23 years of legal battles, the Hague Court of Appeal ruled that H&M did not infringe Adidas’ three-stripe logo by using a two-stripe design on various items of sportswear.
Since 1971, the German sports-giant, Adidas, has registered numerous trade marks in Benelux for its ‘three-stripe’ logo on sports and leisurewear. The logo consists of three vertical, parallel stripes of equal width, with the spacing between them being more or less equal to the width of the stripes.
In 1997, Adidas brought infringement proceedings against H&M in the Netherlands for producing various items of sportswear featuring two parallel stripes. Over the past 20 years, the case has scaled Netherland’s domestic court system, as well as being referred to the Court of Justice of the European Union (CJEU) for further guidance. H&M’s defence centred around the argument that its use of the two stripes was merely decorative use of a common pattern rather than the use of a trade mark to denote trade origin.
The issue that was raised before the CJEU questioned whether the public interest in making generic patterns widely available to retailers was a relevant consideration when “assessing the scope of protection of a trade mark that is inherently non-distinctive or descriptive, but registrable as a result of distinctiveness acquired through use”. Holding in favour of Adidas on this point, the CJEU concluded that this was not a relevant consideration to be taken into account when assessing likelihood of confusion. However, Adidas’ success was short-lived.
What did the court say?
Finding in favour of H&M, the Dutch court held that Adidas’ three-stripe combination and H&M’s two-stripes were only similar to a low degree on the basis that they displayed a different number of stripes, spacing width and overall image. The court also relied on the findings of several marketing surveys and reports suggesting that only 10% of the public would experience confusion, which was not deemed sufficient to assume a likelihood of confusion.
Famous marks inevitably enjoy a broader scope of protection due to their high degree of consumer recognition and dominant market presence. However, the inherent nature and distinctiveness of such signs, even when elevated by significant market exposure resulting in high levels of acquired distinctiveness or secondary meaning, still arguably plays a role when assessing likelihood of confusion. Determining the ultimate scope of protection afforded to the Adidas’ “three-stripe” marks - notwithstanding their significant repute - can only stretch so far.
This decision is likely to be welcomed by the fashion and design industries who advocate the broadest possible design freedom for designers.