ADIDAS AM., INC. V. FOREVER 21 INC.
OPINION AND ORDER MOSMAN, J.
On March 22, 2018, Magistrate Judge Youlee Yim You issued her Findings and Recommendation (F&R), recommending that Plaintiffs' Motion for Judgment
on the Pleadings should be GRANTED. Defendant Forever 21 objected. but later withdrew its objections. No response was filed.
Adidas claims Forever 21 has breached a contract from a previous settlement agreement — as the two have been in a back-and-forth battle for years now — and is seeking unspecified monetary damages, disgorgement of profits from the merchandise in question, as well as enjoinment that the retailer stops infringing upon Adidas intellectual property.
Adidas Pvt. Ltd. is a German shoe manufacturing Company, launched in 2005, which has since then, established itself as one of the world's biggest and most reputed brands in shoes, athleisure, and sports equipment, having franchises in over 160 countries. Their dominance in countries such as Germany, Singapore, the Netherlands, and the Divided Kingdom elevated them to great heights of global dominance. One of the main reasons why Adidas has been able to reach great heights in the sportswear industry is because of the high quality and manufacturing technique of its products which are perfectly blended with comfort and style. Adidas designs are generally simple in nature with a predominance of monochromatic color palettes. Over the years, one of the ways through which it has marketed its brand and made any product identifiable as an Adidas product is through its trademark.
The trademark of Adidas consists of three parallel, identical and equidistant stripes; each being 1.2 cm wide. The stripes are always of the same color and are either black or white. The founder of Adidas registered its trademark in the year 2005. Adidas has spent millions on marketing the three-striped logo and has also fought several legal battles to protect it. Although it has won a lot of these disputes, it has often been criticized by several courts for trying to establish a monopoly over stripes. Over the years, through its marketing and multiple legal battles, Adidas has marketed itself to be the “stripes giant of the sports industry”. Over the last decade, Adidas has also entered the sneaker market. Adidas entered a nascent sneaker market and its popularity as a sneaker giant grew hand-in-hand with the growth of this industry. These sneakers produced by Adidas have always been positioned as luxury goods as they can only be afforded by the population belonging to the higher income groups.
Forever 21 has, in many instances, started fashion trends that have had a craze throughout the country. In 2014, it brought back the “retro style” as its summer collection wherein it recreated the style of ‘polka dots’ and ‘colorful stripes’ in its designs which had garnered widespread appreciation and had even become a new fashion statement of the season. The launch included a new collection of shoes, bags, denim jeans, and denim jackets among other products. The designs of these products encapsulated Forever 21’s signature color schemes and included vivid colors such as pink, bright blue, green, and black. All designs had a common feature-3 multi-colored equidistant stripes of 1.8 cm in width. Each design consisted of 3 stripes with varying colors. These products were launched for sale in March 2022.
Adidas was enraged at these designs released by Forever 21 as it believed that they were strikingly similar to Adidas designs. Adidas thus filed a petition against Forever 21 for trademark infringement on 30th March 2022. It sought to protect its originality and increase awareness about its trademark and designs being misused. Thus, it released an advertisement on May 10, 2022. The advertisement compared shoes manufactured by Adidas vis-a-vis other manufacturers who allegedly used its three-stripe trademark.
The visuals of the advertisement could be referred to in ‘Annexure A’. The advertisement emphasized the tagline “First Originality” and it ended with the phrase “Buy Original – Buy Adidas”. This advertisement was supported by various celebrities and the catchphrase “#FirstOriginality” became a part of various social media campaigns seeking to protect creativity and innovation.
On May 23, 2022, Forever 21 filed a petition contending that the advertisement of Adidas maligned its brand. It sought to prohibit the telecast and circulation of the same. Meanwhile, the trademark infringement suit reached a stage where the Court mandated that the parties try and resolve their disputes through mediation before the court could begin to hear the suit. The Court’s action was reflective of the recent success of mediation processes in resolving oppositions or rectifications in Trademark Applications at the level of various trademark registries.
Adidas AG reached a settlement on Friday with one of Forever 21 Inc.'s suppliers in a suit claiming the apparel retailer violated trademark law by using the German giant's "three-stripe" mark. Adidas asked for a permanent injunction against M Design & Manufacturing Inc., one of several companies named alongside Forever 21 in the lawsuit, which kicked off in March with a preemptive strike from the apparel chain.
"Adidas and M Design have reached a settlement of the claims asserted against M Design in this action and, pursuant to the terms of the settlement, M Design has consented to the entry of a permanent injunction against it," the sneaker company wrote.
Adidas has been highly aggressive in suing over the three-stripe mark in recent years. The company has filed suits against Puma, Marc Jacobs, Sears, Skechers and others over many different products that it claims infringe the mark.
Forever 21, saying it had had enough, filed a preemptive lawsuit against Adidas in March, accusing the company of trying to monopolize the use of stripes on apparel with its enforcement tactics. Adidas fired back the next day with an infringement action in Oregon federal court, making good on the threats that prompted Forever 21 to file its preemptive lawsuit. The dispute was then consolidated in Oregon. The case against Forever 21 and several other suppliers will continue.
This article is written by Saumya Modi of NMIMS, Mumbai.