Brand protection in sport: knowing when to take action, and when not to

The three white stripes. The swoosh. The bounding feline.

Following decades of brand-building and more than a substantial degree of financial investment, these aforementioned symbols have become synonymous with their respective brands in the minds of consumers around the world and have come to epitomise sporting prowess and style. For Adidas, Nike and Puma, they constitute the foundational elements of their brand portfolios, and are invaluable assets in what is becoming an increasingly competitive and saturated market.

Trade mark rights represent one of the most effective tools available to protect the integrity and independence of brands like those named above. With this in mind, when a third party threatens – intentionally or otherwise – to profit from the reputation of, or similarity to, one of these world-renowned marks, it should be expected that the intellectual property (IP) rights associated with them will be fiercely defended.

Indeed, the likes of Adidas, Nike and Puma have historically given no quarter when it has come to the protection of their IP rights around the globe, with Adidas alone having filed more than 90 lawsuits and agreeing in excess of 200 settlement agreements in relation to its three stripe mark in the past 15 years.

However, recent developments suggest that such an uncompromising approach to brand protection may carry with it certain risks, namely that failure in an IP action may have the undesirable effect of undermining the perceived strength of a famous mark’s exclusionary power, or – perhaps even worse – the action itself may result in a headline-grabbing public relations own goal. As will be shown by reference to recent IP disputes involving Adidas and Nike, a multitude of factors must be taken into account by these leading brands before initiating any kind of opposition action.

Adidas

Earlier this year, Adidas made headlines through its high-profile US action against luxury fashion designer Thom Browne’s use of four stripes on his clothing. Adidas – famous for emblazoning its clothing and footwear with three stripes for the past seven decades – unsuccessfully argued that the degree of similarity between the two parties’ use of stripes was such that consumers would be misled. Following the decision, an emboldened Browne released a statement saying that he hoped his fellow independent designers would feel protected if confronted by threats of similar litigation from big companies.

Despite its loss, Adidas released a statement in which it vowed to “continue to vigilantly enforce” its IP rights. True to its word, on 27th March 2023 the German brand lodged an opposition action with the United States Patent and Trademark Office against an application made by Black Lives Matter Global Network Foundation (BLM), in which it claimed that BLM’s yellow three stripe design would create confusion with its own mark.

Two days later, it was announced that Adidas had dropped its challenge to BLM’s mark. No explanation was given for the withdrawal, though reports have suggested that concerns were raised that the opposition could be misinterpreted as a criticism of the organisation. Regardless of the true reason behind Adidas’s backtracking, this rapid change of direction and the lack of organisational cohesion it appears to demonstrate has raised eyebrows amongst industry observers, particularly in light of the company’s traditionally rigid approach to the enforcement of its IP rights.

Nike

Contrast Adidas’s aforementioned litigious escapades with Nike’s recent decision to oppose an application lodged by racing driver Max Verstappen at the Benelux Office for Intellectual Property (BOIP). Verstappen sought protection for the term “MAX 1” in the wake of his first Formula 1 world title triumph at the end of 2021, a victory which carried with it the right to adorn his car with the coveted number 1 for the following season. However, Nike took issue with the proposed mark’s similarity to its own mark for its Air Max shoe range which dates back to 1987 and is subdivided into different lines designated by numbers, including the Air Max 1 line.

It should be noted that Verstappen’s decision to pursue trade mark protection for his new racing number is itself relatively uncontroversial. It has become standard practice amongst leading sportspeople to protect the various constituent elements of their image against the increasingly prevalent threats of counterfeiting and reputational free-riding. More specifically, many sports stars have developed such a firm association with their competition numbers in the minds of consumers that they have been able to build successful brands on the back of them – think Cristiano Ronaldo’s CR7 aftershave, Lewis Hamilton’s +44 clothing line, or Valentino Rossi’s VR46 racing team.

Aware that such an opposition would attract the collective attention of industry experts, the media and Formula 1 fans worldwide, Nike remained steadfast in its defence of the rights associated with its brand before the BOIP. Its confidence has thus far proven to be well-founded, with the BOIP finding that there does indeed exist a likelihood of confusion between the two marks due to their being “visually and aurally similar to some extent.”

Verstappen’s team unsuccessfully argued that there would be no confusion with Nike’s famous shoes as consumers would construe the name and number used in the relevant sign as a reference to the driver’s racing number. The BOIP rejected this argument, noting that it is not possible to consider the manner in which the sign would be used in practice and a decision must be made on the sign “as filed.”

Verstappen was therefore prohibited from registering the “MAX 1” mark, though the decision is open to appeal.

Main takeaways

So what can we learn from the contrasting fortunes of these two sportswear giants in their respective trade mark disputes? Well, in recent years the extent to which the law in this area has operated in favour of big brands has been a point of recurring criticism levelled by IP law scholars against lawmakers. However, these latest developments have shown that irrespective of how well known your mark is amongst consumers, careful consideration should still be taken in making use of the rights afforded by intellectual property protection so as to avoid any unforeseen consequences.

For sector-leading brands like Adidas and Nike who so often hold the cards in disputes like these, knowing when to hold them and when to fold them can be the difference between adding another trade mark triumph to an already impressive IP dispute record and an unwelcome and very public defeat.

At Harper Macleod we have extensive experience in intellectual property, sports law, and dispute resolution. If you would like information in relation to any of these areas, please get in touch with us.