South Africa: Two Stripes And You're Out

Last Updated: 26 April 2016
Article by Ilse Du Plessis

Most Read Contributor in South Africa, September 2016

A recent European case in which Adidas successfully objected to a two-stripe device trade mark for footwear is interesting for us in Africa. For starters, it's a welcome respite from the almost endless stream of bad news that we get from up north regarding non-traditional trade marks – shape trade marks seem to be having a particularly hard time at the moment. But the decision is also interesting because a few years back the South African Supreme Court of Appeal ("SCA") decided that the Adidas three-stripe device trade mark had been infringed by a company using a four-stripe device on shoes.

The European case in question is Shoe Branding Europe BVBA v Adidas and OHIM (Case C-396/15P). The matter involved a trade mark opposition and the central issue was whether Shoe Branding's European trade mark application to register a two-stripe device for footwear was confusingly similar to three-stripe device trade mark registrations belonging to Adidas. In the case of Shoe Branding, the stripes appear in the instep area, whereas in the case of Adidas, they appear between the laces and the soles. The sloping of the stripes also differs.

The lower tribunals – the Opposition Division and the Board of Appeal – both rejected Adidas' opposition, noting that the three-stripe device trade mark is so banal that its protection is limited to identical or near-identical trademarks. The General Court, however, overruled these decisions. It said: "The difference in length of the stripes arising from their difference in inclination are minor differences between the marks that will not be noticed by the consumer with an average degree of attention and will not influence the overall impression those marks produce on account of the presence of wide sloping stripes on the outside of the shoe."

The matter finally ended up in Europe's highest court, the Court of Justice of the European Union ("CJEU"). The court conducted a so-called "global assessment" of the similarities between the trade marks and said: "The difference between two and three stripes placed on a shoe is not sufficient to affect the similarities, arising from the configuration of the signs at issue from their position on the side of the shoe so that the difference does not influence the overall impression produced."

The fact that the lower tribunals came to a totally different conclusion to the higher tribunals does show how tricky these matters can be.

The SCA decision referred to earlier is also illustrative of the complexities of these matters. This matter was an infringement case, and the central issue was whether retailer Pepkor's use of various two and four-stripe devices on sports and leisure footwear infringed Adidas' three-stripe device trade mark registrations.
The South African case is notable because the SCA rejected Pepkor's defence that the two- and four-stripe devices that it was using were being used for decorative purposes rather than as trade marks or source indicators. This defence became quite popular in South Africa after the SCA's earlier decision in the case of BMW v Verimark. In that case, the court held that a trade mark registration that BMW had for its badge had not been infringed by a company that showed a BMW vehicle in a TV ad for a car polish, because the BMW trade mark (badge) had been used in an incidental or "non-trade mark" manner.

In the Adidas case, however, the judge said: "It seems to me that it will be very difficult to persuade a court that any mark applied to goods for 'embellishment' or 'decoration'... is not applied for the purposes of distinguishing the goods.... if the use creates an impression of a material link between the product and the owner of the mark there is infringement, otherwise not." The judge went on to say that, as consumers are used to seeing stripes on footwear to identify goods, they would make the same assumption about Pepkor's shoes. The mere fact that Pepkor's shoes featured brand names in addition to the stripes made no difference, because it's quite common for more than one trade mark to be used on the same product.

The Adidas decision is also remembered for the fact that Pepkor argued that, because the three-stripe trade mark is so well known and so synonymous with Adidas, no one seeing two or four stripes would be confused. The judge rejected this counter-intuitive argument as follows: "In my view, the fact that the first appellants' three stripes trademarks are famous, does not justify a finding that there is no likelihood of deception or confusion because purchasers of the goods will see immediately that the respondent's marks are not the first appellant's marks. In my view the contrary is true. The more distinctive the trademark is, or the greater its reputation, the greater the likelihood that there will be deception or confusion where a similar mark is used on a competing product."

The SCA went on to hold that certain sports shoes sold by Pepkor did infringe Adidas' three-stripe device trade mark registrations – these shoes all featured four stripes that ran parallel and were slanted towards the heel. Other leisure shoes that featured two stripes, however, did not infringe.

Trade mark owners should take heart from the fact that courts are still prepared to recognise that non-traditional trade marks can and do indicate source, and that there may well be confusion if they are copied.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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