Adidas Sportschuhfabriken Adi Danker K.A. v Charles O'Neill Company Ltd

• Jurisdiction: Ireland
• Judge: Henchy J.,O'HIGGINS C.J.
• Judgment Date: 01 January 1983
• Neutral Citation: 1982 WJSC-SC 1641
• Court: Supreme Court
• Docket Number: 174/80
• Date: 01 January 1983

ADIDAS v. O'NEILL

ADIDAS SPORTSCHUHFABRIKEN ADI DASSLER K.A.

Appellants

and

CHARLES O'NEILL & COMPANY LIMITED

Respondents

1982 WJSC-SC 1641

174/80

THE SUPREME COURT

1 JUDGMENT delivered the 2nd day of July 1982by O'HIGGINS C.J.[HEDERMAN J. ConCURRING]

2 The Appellants (hereinafter referred to as Adidas) appeal to this Court against the dismissal by Mr. Justice McWilliam of their claim for passing off brought against the Respondents (hereinafter referred to asO'Neill).

3 Adidas originated in Germany but now has an international basis and standing. It manufactures and sells sports equipment of all kinds including boots, shoes, clothing, bags, footballs and various accessories. It has at present factories in nineteen countries situate in western and central Europe and the Far East. In addition it has a large international sales organisation. It was formed in 1947 and its growth over the years has been rapid and sustained. The processby an extensive advertising campaign, not only in newspapers, magazines and other periodicals, but also on radio and television in different countries. As a part of its promotional and advertising campaign, Adidas has concentrated on having its products worn and used by competitors in the big international athletic and sporting events which would be the cynosure of world television. When Adidas commenced operations in 1947 it confined its activities to the manufacture and sale of sports footwear of all kinds-football and other boots; track, tennis and other types of sports shoes. This footwear was manufactured and marketed with a distinctive design or fashion of three diagonal coloured stripes on the instep and outer side of each boot or shoe. As a result of the use of Adidas footwear by competitors at athletic and other events and the television coverage, this particular design or fashion became well known. In 1967 Adidas decided to launch into textiles and sportswear generally. To this end it proceeded to manufacture and sell, through itsorganisationfootball shorts, shirts, singlets, track suits, anoraks, bathing costumes and a variety of sporting and leisure gear. Most of these garments in addition to bearing the word "Adidas" or a particular trefoil, which are Adidas trade marks, also carried the design of three coloured stripes, not diagonal, but straight down the side of the arms or legs, where that was possible. Again, to the extent that competitors at Olympic or other sporting events used Adidas sports gear, the three-stripe design necessarily received extensive television coverage. So far as Ireland is concerned it appears that Adidas footwear came on the market in limited quantities in the late 1960's. Footwear was then subject to quota restrictions and such small quantities of Adidas products as were imported were brought in by commission agents.One of these was a Mr. Michael O'Connell. In 1970 when quota restrictions on footwear came to an end Mr.O'Connell succeeded in securing the sole agency for.Adidas in Ireland. In 1971 he formed a company called Three Stripes International Limited, through which thisagency operated. Initially, Mr. O'Connell's importation of Adidas products consisted of footwear although he did sell a small quantity of track suits and other sports gear. In 1976 Mr. O'Connell persuaded Adidas to commence manufacturing in Ireland and since then has been, on behalf of Adidas, in Competition with O'Neill in the sport market fortextiles.

4 O'Neill is an Irish company which was formed in 1918. It commenced with the manufacture and sale of footballs for the three codes of football in this country. Its products were identified by the name "O'Neill's" written across them. In the middle 1920's it produced a white football known as "The O'Neill All-Ireland" which has since become the standard ball for big GAA games. In 1927 in association with an English company called Umbro, O'Neill started importing sports gear - mostly shorts and jersies - and supplied these on order to teams playing the different codes of football. As a result of difficulties of supply and import restrictions both during and subsequent to thelast War, O'Neill decided in 1960 to manufacture its own textile products. Initially these consisted of football shorts and Jersies which were supplied on order, mostly to GAA teams. Apparently, the business expanded quickly. In 1965 O'Neill started putting stripes on its products. The number of stripes varied, according to what was ordered from one to three. In 1967 track suits first appeared on the Irish market, having been imported from Poland. Their appearance apparently started a fashion in Ireland and O'Neill responded by manufacturing its own track suits. Again in response to orders O'Neill commenced putting stripes on these articles. Initially the number of stripes varied in accordance with the order from one to three. O'Neill faced particular technical difficulties in affixing stripes to their products. However, because stripes were popular and were demanded, it persisted in efforts to overcome this difficulty and eventually secured a machine which enabled stripes to be added to the garment in a satisfactory and economical manner. By 1976O'Neill had four striping machines in production and were manufacturing in two centres - one in Dublin and one in Strabane. At this stage, and for some years before, it had concentrated on three stripes down the side of the legs and arms of jersies and shorts and also on track suits. At this stage, also, O'Neill's products were extensively used by supporters of the three football codes in Ireland. It had a virtual monopoly in the supply to the GAA of footballs and hurling balls and they supplied to clubs in the three codes the majority of the sporting gear used. In addition, their products were stocked by sports shops and were freely purchased by the public.

5 This was the situation which confronted Adidas when it decided in 1976 to open a factory in this country and thereby seriously to compete for the Irish sports gear market. It had the year before secured the registration in Ireland of a trade mark consisting of a treacute;foil with three horizontal stripes. This trade mark was in no way associated with a design of stripes on garments.

6 However, faced with the fact that O'Neill's garments were then commonly on sale with the three-stripe design, Adidas in May 1976 instructed their trade mark agent to write to O'Neill claiming that this was an infringement of Adidas' registered design. This letter only referred to track suits. In fact Adidas had no such design registered in Ireland. O'Neill' reply indicated that if such design were registered it was invalid as "a three-stripe pattern in ornament has been applied to sportswear since at least the late 1950's .......... Furthermore decorations of three stripes are widely used throughout the clothing trade." Subsequent to this letter, on the 22nd December 1976, through their trade mark agents Adidas applied for a registration of a trade mark consisting of "three equally spaced stripes, each of the same colour and width" on the arms and legs of sports clothing. This application has not yet been dealt with. This is probably due to the fact that these proceedings were commenced by Adidas against O'Neill's and involve incidentally the whole question as to whether anyparticular exclusive property or reputation can be claimed by Adidas in respect of the three-stripe design on clothing.

7 Adidas's claim in these proceedings is that O'Neill by putting three coloured stripes down the arms and legs of the shorts, jersies and track suits which it manufactures and sells, has been passing off these products as the products of Adidas. The claim is confined to the use of this three-stripe design in the manner indicated. No suggestion has been made that Adidas's name or trade marks have been used or that any other form of representation has been made. It is, therefore, a claim for passing off based exclusively on the alleged imitation of the general appearance or "get up" of Adidas products so as to confuse and mislead the public. A claim for passing off so based is rare. In Kerly's Law of Trade Marks 10th Edition, at 419, this fact is noted in the following passage:

"It is usually true in some degree that a trader's goods are recognised as his by their general appearance, or "get up".Accordingly, resemblanceof "get up" is not uncommonly an ingredient in passing off, and it is possible for imitation of "get up" alone to amount to passing off. Such cases are rare, since few traders rely on";get up" alone to distinguish their goods, so that trade names and word trade marks are ordinarily present too; and in these days, in this country, a difference in names is enough to warn the public that they are getting one trader's goods and not the other's. Accordingly, there can hardly be passing off by "get up"alone unless the resemblance between the goods is extremely close, so close that it can hardly occur except by deliberate imitation; and even that may not be enough."

8 Even if its claim be rare or exceptional, Adidas is entitled to succeed if it can establish that the three-stripe design used in the manner Indicated is clearly associated in the public mind with its products, and with those of no other trader, so that it has a clear reputation in the use thereof; and further, that what has been done by O'Neill is calculated to cause such confusion in the minds of probable customers of Adidas as would be likely to lead to O'Neill's goods being bought and sold as the goods of Adidas. I think it proper toadd that the public mind which is to be considered in relation to the establishment of a reputation for Adidas in the three-stripe design is the public mind in this country and, further, that the confusion which is relevant is the confusion of probable customers here. In this respect this case differs from C & A Modes and C &...