The divergent views of the same issue that courts can take was recently well illustrated in a South African court case where Adidas launched trade mark infringement proceedings in the Western Cape High Court based on its well-known three-stripe trade mark. However, despite international recognition of this mark, the court found in favour of the other party, Pepkor, who used a four-stripe design on shoes sold by them.
The dominant features of the Adidas mark are three lateral stripes, parallel to and equi-distance from each other. The stripes are also of the same width. The Pepkor shoe shared these characteristics, with the exception of having either two or four stripes. Adidas argued that the public would be confused between these two products and submitted survey evidence showing that many respondents interviewed had identified the Pepkor shoes as being that of Adidas. Pepkor, on the other hand, argued that it used the two/four-stripe designs as mere decorations.
The court referred to the substantial amount of exposure enjoyed by Adidas's products and held that consumers are sufficiently discerning to distinguish Adidas's stripes from the two or four-stripe designs used by Pepkor. The essential part of the ruling is that Adidas does not have a monopoly in parallel stripes of an equal width and distance on the surface of shoes, irrespective of the number of stripes used or their established recognisable usage of them. In addition, Adidas had notably never registered two or four-stripes as trade marks.
This ruling is in stark contrast to decisions in other parts of the word, notably in Oregon in the United States, in the Payless case, where Adidas was successful in a matter where two and four-stripe marks were held to be infringing. It is interesting to compare the American court's view with that of the Pepkor decision. In the former, it based its view on the likelihood of confusion, that:
"Although three stripes obviously do not equal four stripes, the issue is not simply the number of stripes. Instead, the issue is whether the total effect of the allegedly infringing design is likely to cause confusion in the minds of an ordinary purchaser. While there can be no debate that defendants' four stripe mark has one stripe more than Adidas' Three Stripe Mark, so too there can be no debate that many of the other features of the stripes displayed on defendants' [shoes] are strikingly similar-if not identical-to the features of the Three Stripe Mark displayed on [Adidas'] Superstar IIK and Campus II models.... The stripes are equal in size, are placed equidistant at a similar or identical angle, are in substantially the same location between the sole and the reinforced area which supports the shoelace holes (with the necessary adjustment to accommodate four rather than three stripes), are displayed in colors which contrast with the background color of the shoes, and have serrated edges. Thus, this court cannot simply count the number of stripes and determine as a matter of law that four stripes are not confusingly similar to three stripes."
Interestingly, a total amount of $305 million in damages was awarded in this case, one of the highest amounts awarded this far. However, Adidas was less successful in Europe, where the stripes used were seen to be merely decorative (with a few exceptions in specific countries).
Decisions of the Court of Justice of the European Union (CJEU)
have a significant influence in South Africa. The CJEU's
approach is to establish whether the defendant's use could harm
the mark's ability to indicate the origin of the
plaintiff's products, which would be the case where a material
link is seen to exist between the parties' respective products.
On this basis it could perhaps be argued that a two-striped shoe
cannot indicate origin. However, the American decision indicates
that perceptions as of origin and confusion may differ in various
parts of the world.
The Pepkor case highlights the seemingly paradoxical situation where a mark is found to be famous, yet qualifies for only limited protection. The three-stripe pattern is exposed to consumers on a massive scale. Despite this, two or four stripe-patterns will fall outside of the monopoly given to Adidas, as matters stand. In other words, unless the exact mark is used, there will be no infringement, with the ironic result being that Adidas seems to be victim of its own successand. It will be interesting to see whether they appeal the matter.
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