“In the name of Adidas”
The trade mark indicates in law any sign capable of being represented graphically, in particular words (including the names of persons), drawings, letters, figures, sounds, shape of a product or its packaging, colour combinations or shades, provided that it is capable of distinguishing the goods or services of one undertaking from those of others.
Therefore, one of the cornerstones of the trade mark is its distinctive character, from which the proprietor has an exclusive right to use it, as well as a monopoly.
In Italy it is governed by Articles 7 to 28 of the Industrial Property Code (Legislative Decree No 30 of 10 February 2005).
A distinction is made between the de facto trademark and the registered trademark which, by virtue of the registration process, enjoys enhanced protection in that it has certain date, while the de facto trademark must demonstrate both notoriety and extended pre-use. The de facto mark is protected on condition that it has the distinctive character and possesses the requisites of novelty and originality typical of the registered one.
Recently, the famous sportswear brand Adidas has been in litigation with the Christian Faith Fellowship Church (CFFC), a church group founded in 1989 and spread to 250 locations including Chicago, which in 2005 filed two applications for a literal and figurative trademark, “ADD A ZERO”, with which to raise funds for charity, taking advantage of a common sentiment that rides a thought of this tenor: «determine how much you can afford to donate, then add a zero to that amount».
In 2006 this deposit was formalized, referring to clothing, hats and T-shirts, which precisely conveyed this message.
In 2009 Adidas filed a trademark application for “ADIZERO”, a word mark very similar in lettering and reading to the one registered by CFFC, to indicate ultra-lightweight sneakers and related clothing line, whose diffusion began in 2005.
This intersection of dates has clearly given rise to a dispute in the field of intellectual property. At first, the Adidas application was rejected precisely because it created a serious risk of confusion with the ecclesiastical mark. The legal department of Adidas AG then appealed against the decision on the basis of three main arguments:
- the Church did not show sufficient “commercial use”, which is a necessary condition for an application for registration based on use;
- the Church did not continue with a consistent use of these trademarks after obtaining the registrations;
- the phrase “ADD A ZERO” is more an informative phrase, a claim, a slogan, rather than an indicator of the source and therefore does not function as a trademark (I quote: “because ADD A ZERO is simply an informational slogan”).
In a first litigation in 2015 at the Trademark Trial and Appeal Board (TTAB), the Board agreed with Adidas’ arguments and cancelled both Christian Church’s records, also relying on the concrete circumstance that the phrase/brand was more “a prophetic word uttered to the congregation” to encourage charitable donations, and, although the church group had brought proof of purchase of two caps, made by a resident of the state of Wisconsin, this evidence was not considered sufficient to prove a “commercial use” of the disputed brand! Therefore, in the face of a proven “non-use”, CFFC saw the two registrations canceled.
«Under Section 1(a) of the Trademark Act, a mark may not be registered unless it is “used in commerce.” Section 45 of the Trademark Act defines “use in commerce” as follows:
The term “use in commerce” means the bona fide use of a mark in the ordinary course of trade … on goods when — (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce».
But the case did not stop there, and the CFFC appealed against the TTAB’s decision to the Federal Circuit Court of Appeal, which overturned the previous ruling, on the grounds that if that single transaction for the purchase of two caps represents sufficient use in trade to register a trademark, the same de minimis sale must be sufficient to overcome a presumption of abandonment! And although there had been an interval of four years, during which no sales of products under that mark had been made, the church group demonstrated that the non-use was excusable, because it was due to restructuring, so that sales were subsequently resumed via their online store, which is why neither the word sign ADD A ZERO nor the stylised sign ADD A ZERO had been abandoned.
It seems clear that this decision, based almost exclusively on a bona fide economic transaction, creates an interesting precedent, binding the use of a trademark to minimum standards, and therefore easily replicable in other venues or circumstances. Moreover, in the Adidas application, although it has been shown that the claim ‘add a zero’ has been widely used for charitable transactions carried out by other organisations, and therefore not so distinctive as to represent a genuine mark, in this case, on the other hand, it has been held to be a «specific combination, placement and shading of the wording and design elements» such as to make it a unitary and distinct sign.
It remains to be seen whether Adidas will stop here and accept the federal decision or continue this duel in yet another court of law.
All Rights Reserved
Raffaella Aghemo, Lawyer