A David and Goliath matchup currently before the United States Trademark Trial and Appeals Board shows that aggressive, adversarial trademark enforcement may not always be the best approach.
The dispute pits global sportswear powerhouse Adidas AG against the Christian Faith Fellowship Church, a small-town congregation located outside of Chicago, Illinois. Adidas applied in 2009 to register the trademark ADIZERO for use with a lightweight line of shoes and other athletic apparel, but the United States Patent and Trademark Office rejected the application, reasoning that ADIZERO is confusingly similar to ADD A ZERO, a trademark registered by the Church in 2006. (U.S. law gives priority to the first party to use a trademark and prohibits later registration of other trademarks likely to cause confusion with the original.)
The Patent and Trademark Office’s decision left Adidas, like many brand owners whose trademarks run into a conflict, in a bind: it had no legal protection for the ADIZERO mark, but had already launched the ADIZERO product line and invested a substantial amount in advertisements for it. Indeed, Adidas signed Chicago Bulls point guard Derrick Rose to a $250 million sponsorship deal in part to promote ADIZERO footwear.
Adidas responded to the conundrum first by offering to buy the ADD A ZERO mark for $5,000. The Church rejected the offer, suggesting that it was insultingly low. Next, Adidas filed a petition to cancel the ADD A ZERO mark, alleging that the Church had failed to use it in commerce (a requirement for protection under U.S. trademark law). The Trademark Trial and Appeals Board preliminarily denied Adidas’s petition in May, citing evidence that the Church sold at least two ADD A ZERO shirts over the past four years. As a result, Adidas will have to make its case at a trial later this year.
After four years of expensive legal battles, Adidas is exactly where it started: it has no trademark registration for the ADIZERO brand name and no guarantee that it ever will.
So what could Adidas have done differently? As we have noted in the past, cooperative trademark enforcement strategies are often a faster, less costly way for brand owners to get the results they want. Instead of suing the Church, Adidas could have pursued a solution that promoted both parties’ interests, for instance by:
- leveraging its relationship with Mr. Rose and Mr. Rose’s fame in the Chicago area to raise money for the Church in exchange for permission to use the ADIZERO mark;
- using its marketing expertise to help the Church design and promote its new e-store (in which ADD A ZERO goods are sold) in exchange for a license agreement; or
- communicating with the Church in a supportive, non-adversarial—and perhaps in-person—manner, using an approach similar to that employed by attorneys for Jack Daniel’s whiskey in a well-received cease and desist letter.
Although there is no guarantee these strategies would have worked, each offered an opportunity to avoid the expense, delay, and occasional bad press associated with litigating a trademark claim against a sympathetic party like a university or local church.