Adidas gets taken for a ride: Adidrip, unfair advantage and the power of reputation

In a recent decision, Adidas AG ("Adidas") successfully invalidated the series of "Adidrip/adidrip" trade marks (the "Adidrip Marks") registered by Marlon Grandison, an independent musical artist, in respect of goods in classes 24 and 25 for cloth and various clothing goods on the grounds that it took unfair advantage of Adidas's reputation, free riding on the sportswear giant's longstanding investment in its "adidas" mark. The decision reinforces a core principle of UK trade mark law that for established brands reputation-based protection remains one of the most powerful tools available to enforce their rights effectively and maintain the integrity of their brand. Here we unpack what it means.

A recap of the facts

Adidas advanced three grounds of challenge under the Trade Marks Act 1994: a likelihood of confusion under section 5(2)(b), an argument that their earlier marks enjoyed a substantial reputation in the UK under section 5(3), and a passing off claim under Section 5(4)(a).

Adidas failed on its arguments based on consumer confusion. The UKIPO found that, even where the goods were identical, the visual and aural differences between Adidas and Adidrip were sufficient to prevent a likelihood of direct or indirect confusion. For similar reasons, Adidas’s passing off claim also failed; although Adidas had evidence of goodwill, at least in respect of sports shirts and sports jackets, sports apparel and footwear, it could not establish the required element of misrepresentation. Consumers were unlikely to be genuinely deceived into believing that Adidrip goods came from, or were commercially connected with, Adidas.

Instead, Adidas succeeded under section 5(3) and the UKIPO concluded that the Adidrip Marks registered took unfair advantage of the reputation vested in Adidas's longstanding marks.

What is "Unfair Advantage"?

Under the Trade Marks Act 1994, a mark with a reputation enjoys protection against uses that do more than cause consumer confusion. A later mark can be refused or invalidated if it takes unfair advantage of the earlier mark's reputation, even where the goods are dissimilar and there is no suggestion that consumers are misled as to commercial origin.

Unfair advantage arises where:

• a 'link' can be made in the minds of the public between the later sign and the earlier reputed mark; and
• that link confers an unearned commercial benefit on the later user, such as instant recognition, brand credibility, or enhanced market appeal.

The doctrine is designed to combat "free-riding". It prevents businesses and creators from seeking to ride on the coattails of a mark with a reputation in order to benefit from the power of attraction, the reputation and prestige of that mark, and to exploit, without any compensating investment, the marketing effort expended by the proprietor of the mark in order to create and maintain the mark's image.

In determining whether a trade mark has the requisite reputation, it must be shown to be known by a significant portion of the relevant public for the goods and services it covers. Reputation is assessed by looking at factors such as the brand's market share, sales volumes, duration and intensity of use, and the scope of the proprietor's advertising and marketing efforts.

The decision

The facts of the case did not turn on the likelihood of confusion for the general public between the marks, nor the similarity of the goods, which were deemed unlikely to be in competition or be complementary. Instead, the outcome hinged on the association triggered by a reputed mark.

The UKIPO found that at least a significant portion of consumers encountering the “Adi” element of the "Adidrip" mark would naturally think of Adidas, even in situations where they did not believe the goods derived from Adidas, and that mental "link" would confer an unearned commercial benefit on Grandison. In essence, Grandison was leveraging Adidas's brand equity to enhance his own. This is precisely the kind of "free-riding" the Trade Marks Act prohibits where an earlier mark enjoys a reputation, just as Adidas does.

A central factor in Adidas’s success was the UKIPO’s finding that the sportswear giant holds a very strong reputation in the UK, at least in respect of the goods covered by its earlier marks. This conclusion was supported by evidence of multibillion-pound UK turnover, a significant market share in clothing, footwear and accessories, and strong sales of core products such as sports tops and jackets.

Adidas also demonstrated substantial and sustained investment in brand promotion, having spent approximately £772 million on advertising, marketing and promotion of the Adidas range of clothing, footwear and related items in the UK between 2016 and 2021 – around £445 million of which was linked to its commercial relationships with Manchester United FC, Arsenal FC and Chelsea FC, as well as the British Olympic Association.

Key takeaways

Although "Adidrip" is a compact decision, it serves as a clear reminder of the strength of reputation-based protection and the unique commercial and cultural value of reputable marks as signs of quality and consumer trust, beyond their function as indicators of origin. More practically, the UKIPO's approach reflects a strong commitment to protecting brand equity and offers valuable lessons for brand owners looking to build and maintain their reputation.

Need advice? Our IP team can help you clear, register, and protect your brand effectively. Contact us if you would like to discuss your options.