CA 563/11 ADIDAS SALOMON A.G v. Yassin, decided by the Supreme Court of Israel on 27 August 2012, is an important Israeli trademark decision concerning the scope of protection for a famous visual mark, confusing similarity, passing off, dilution and unjust enrichment.
The dispute arose after an importer brought into Israel sports shoes bearing four diagonal stripes and the word SYDNEY. Adidas relied on its well-known registered three-stripe trademarks and argued that the imported shoes infringed its trademark rights and created actionable confusion.
The Supreme Court, by majority, dismissed the appeal and held that the four-stripe presentation did not infringe Adidas’ registered three-stripe mark in the circumstances of the case.
For the general legal framework, see Trademark Infringement Litigation in Israel and Trademark Triple Test in Israel.
Background to the Adidas Trademark Dispute
Adidas owns registered trademarks in Israel that include its familiar three parallel stripes used on footwear and other sporting goods.
In 2005, the respondent imported shoes bearing four diagonal stripes. The shoes also displayed the name “SYDNEY” in several places. The shipment was detained by Israeli Customs because of concerns that the goods might infringe Adidas’ intellectual property rights.
Adidas brought proceedings arguing that the four-stripe design was confusingly similar to its registered three-stripe trademark and sought remedies including prevention of the import and sale of the shoes.
The District Court Rejected the Claims
The Tel Aviv District Court dismissed Adidas’ claims. It held that the four-stripe design, viewed together with the other features of the shoes, did not create the required likelihood of confusion with Adidas’ registered mark.
The District Court also rejected claims based on passing off, dilution and unjust enrichment.
Adidas appealed to the Supreme Court.
The Supreme Court Majority: No Trademark Infringement
The Supreme Court dismissed the appeal by a majority. The Court accepted that Adidas’ three-stripe mark had acquired very strong recognition and goodwill. However, the strength of a mark does not automatically give its owner a monopoly over every visually related design.
The Court emphasized the need to assess whether the challenged sign is sufficiently similar to the registered trademark to create the relevant likelihood of confusion.
In this case, the majority concluded that the use of four stripes together with the other features of the shoes did not amount to infringement of Adidas’ three-stripe mark.
The Importance of Distinctiveness and Scope of Protection
The decision illustrates an important distinction between the strength of a mark in the market and the legal breadth of the monopoly created by registration.
Adidas’ three-stripe mark had acquired very strong distinctiveness through extensive use and recognition. At the same time, the underlying visual idea of stripes on footwear is relatively simple. The Court therefore had to balance the legitimate protection of Adidas’ registered mark against the risk of granting exclusivity over stripe designs more generally.
The result was a relatively careful definition of the protected scope: strong recognition of the three-stripe trademark did not mean that every shoe displaying a different number of stripes necessarily infringed.
Applying the Triple Test
Israeli courts traditionally assess confusing similarity by considering the appearance and sound of the marks, the goods or services and relevant customers, and the remaining circumstances of the case.
In the Adidas case, the central issue was visual similarity. The Court considered the three-stripe trademark and the four-stripe design in the context in which consumers would encounter them.
The Court did not treat the shared use of diagonal stripes as sufficient by itself. The overall comparison remained decisive.
For a detailed explanation of the doctrine, see Trademark Triple Test in Israel: Infringement vs. Passing Off.
Visual Trademarks and the Product as a Whole
The decision is particularly significant because it involved a visual trademark placed directly on the product itself.
With a word mark, it is often possible to compare the two signs relatively independently from the product. A visual mark that appears as part of the design of a shoe can be harder to separate completely from the product on which it appears.
The Court therefore recognized that the appearance of the goods can have some relevance when assessing the allegedly infringing use of a visual mark. This does not convert trademark infringement into a general comparison of the parties’ products, but it may affect how the visual sign is perceived by consumers.
No Passing Off
Adidas also relied on passing off. That cause of action is separate from registered trademark infringement and requires proof of goodwill and a likelihood of confusion arising from the defendant’s overall conduct.
There was no serious dispute regarding Adidas’ reputation. The central issue was confusion.
The majority concluded that the respondent’s overall presentation did not create the required likelihood of deception. Among other matters, the shoes prominently used the name SYDNEY, which helped distinguish them from Adidas products.
For the separate legal requirements of the tort, see Passing Off in Israel.
Dilution of Reputation
Adidas also argued that the use of four stripes diluted the strength and reputation of its famous three-stripe trademark.
The Court recognized that dilution can, in principle, protect a strong trademark even where ordinary confusion is not established. However, dilution is not an automatic alternative whenever an infringement claim fails.
In the circumstances of the case, the majority did not find a sufficient basis for concluding that the four-stripe shoes eroded or blurred the commercial power of Adidas’ trademark.
Unjust Enrichment Claim
Adidas further argued that the importer had unfairly benefited from Adidas’ reputation even if the requirements of trademark infringement and passing off were not satisfied.
The majority rejected the unjust-enrichment claim. The Court was reluctant to use unjust enrichment to create a broader monopoly where the specific intellectual-property claims had already been considered and had failed on the facts.
Deputy President Rivlin dissented on this point. He considered that the respondent’s conduct could justify relief under unjust-enrichment principles and suggested a practical solution involving an additional stripe.
The Dissent: Adding a Fifth Stripe
Deputy President Rivlin would have allowed the appeal in part. His position focused on the commercial benefit obtained from selling a product that deliberately evoked the appearance of a famous branded product even if consumers understood that it was not genuine Adidas footwear.
He proposed a narrowly tailored remedy: requiring a change from four stripes to five stripes so as to further distance the imported shoes from Adidas’ visual identity.
The majority did not adopt that approach.
Why the Adidas Decision Matters
The case is important for several reasons. It confirms that even a highly famous and strongly recognized trademark does not necessarily extend to every similar design concept. It also illustrates how the scope of a visual trademark may depend on the way consumers encounter the sign on the product itself.
The decision further demonstrates that trademark infringement, passing off, dilution and unjust enrichment are separate causes of action. A claimant should not assume that failure on one theory automatically determines the others, although the same factual findings may influence several claims.
Practical Lessons for Trademark Owners
Owners of visual trademarks should define carefully what is protected by the registration and what aspects of the overall product presentation depend instead on passing off, design rights or other causes of action.
Where enforcement concerns a similar but non-identical visual sign, evidence of consumer perception, the strength of the registered mark, the appearance of the goods, the relevant price point, branding and purchasing environment may all become important.
The decision also shows why enforcement strategy should be developed before litigation begins. The strongest claim may depend on whether the dispute concerns the registered mark itself, the overall get-up of the product, the reputation of the brand or some combination of these.
Israeli Trademark Litigation Counsel
Drori Stav IP represents trademark owners and defendants in Israeli trademark infringement, passing-off, opposition, cancellation and related disputes.
For broader representation, see our Trademark Litigation in Israel practice page.
Case Details
Case: CA 563/11 ADIDAS SALOMON A.G v. Yassin
Court: Supreme Court of Israel
Decision: 27 August 2012
Result: Appeal dismissed by majority; no trademark infringement, passing off, dilution or unjust enrichment established on the facts.
