Importer prevails against Adidas: four-stripe trainers do not infringe

Judge Michal Agmon-Gonen has dismissed claims by Adidas against Galel Yassin, who imported cheap training shoes from China (TA 2177/05).

Yassin imported trainers for sale by market traders at NIS20 to NIS30 (about $6 to $9). The shoes had four parallel diagonal stripes on each side and Adidas claimed that this infringed its famous three-stripe logo. The judge ruled that there was neither an objective nor a subjective likelihood of confusion. Customers were aware that the shoes were cheap substitutes and not the brand leaders. Yassin had clearly marked the shoes with the brand ‘Sydney’ in three places and did not use the word Adidas or the three-leaf symbol.

Yassin attempted to negotiate a compromise with Adidas, offering to add a line crossing through the four stripes or a large cross on top (both of which would be done before the goods were released from the docks), but to no avail.

The ruling indicates that the judge was not enamoured with recent trends that see brands and trademarks as property in themselves, instead believing that trademarks should simply indicate the supplier or manufacturer of the goods. With such a narrow interpretation of trademark law, the legal issue is simply one of likelihood of confusion. While the judge was prepared to acknowledge that the inspiration for the four-stripe mark may well have been Adidas’s product line, there was nevertheless no likelihood of confusion. Rather, Yassin provided a cheap alternative to Adidas.

Yassin provided evidence that other shoe manufacturers, notably Skechers, also used a four-stripe decoration. Adidas cited previous rulings in its favour, both in Israel and abroad. The judge suggested that Adidas was aggressively throwing its weight against weak competitors which were generally unable to defend themselves due to the financial strain, and saw this as trademark abuse. Trade freedom allows others to import footware and the public interest is in competition. In addition to leading brands, there is a market for unbranded, generic products, and the four-striped trainer was one such generic alternative for those unable to afford the brand leaders’ products.

While accepting the existence of various legal doctrines such as the dilution of famous marks, the judge considered these trends to be a policy issue, and generally considered the public good and competition of greater importance.

Although some Israeli case law was cited, the 46-page ruling is more notable for referring to both recent and classical journal articles and textbooks, and for quoting the minority opinion in the A.Sh.I.R. case (5768/94).

In conclusion, Adidas’ case was dismissed. Yassin can continue to import generic, non-branded training shoes and was awarded NIS 85,000 (about $23,600). Adidas has appealed the decision.

The ruling appears to be depart from current trends. Although the job of setting legal policy is best left to the Supreme Court, it seems likely that this ruling will be upheld if challenged on appeal; even if not appealed, it will be influential since it makes a compelling case.