Gap v Sports Group Denmark Clothing Dispute

What a workout! The UK High Court recently ruled in a lengthy IP dispute involving the clothing companies Gap and Sports Group Denmark. The parties clashed over the use of the trade marks ATHLETA and ATHLECIA. Our Intellectual Property team considers the practical implications for brand owners in the fashion industry.

The UK High Court has recently ruled in a trade mark infringement and passing off case. The case was brought by Athleta (ITM) Inc (Athleta), which is owned by Gap. The defendant in this case was Sports Group Denmark (SGD).

A number of issues arose in the case including:

• Trade mark infringement
• Invalidity
• Revocation, and
• Passing off

Of particular interest, is that the Court dismissed the infringement claim regarding the use of the word marks ATHLETA and ATHLECIA. In contrast, there was deemed to be a likelihood of confusion and trade mark infringement regarding the competing ATHLETA and ATHLECIA logo / device marks. We review the decision and consider the practical implications for brand owners in the fashion sector.

Background

Athleta sells women’s clothing, primarily activewear, under the brand ATHLETA. SGD is a Danish company that designs, produces and distributes clothing, accessories and footwear. It operates under several brands. One of its brands is ATHLECIA which focuses on women’s activewear. Athleta is the owner of the following UK registered trade marks:

• ATHLETA (No. 00907234503) in classes 3,9,14,18,25,28 and 35, and

• The below trade mark (00907234628) in classes 18,25 and 35:

In addition to the two registered trade marks, it also claims to own goodwill in the UK in the following additional signs:

• The Athleta Dark Pinwheel, and

• The Athleta Purple Pinwheel

SGD admitted that it has used the following signs in the UK on bags, clothing, headgear and footwear:

• ATHLECIA

• The Athlecia device

• The first Athlecia combination, and

• The second Athlecia combination

Athleta claimed trade mark infringement and passing off. SGD denied the claims. In response, SGD sought to invalidate the Athleta trade marks and/or revoke them for non-use.

Invalidity

SGD claimed that the ATHLETA marks lacked distinctive character. They also claimed the ATHLETA marks consist exclusively of signs that describe the intended purposes of the goods and services for which they are registered. The UK High Court rejected this claim as no evidence had been furnished to support it. The Court determined that ATHLETA is a coined term that, while evoking associations with "athlete" or "athletic," does not lack distinctive character.

Revocation

SGD applied to revoke the ATHLETA trade marks for non-use. The Court examined the use of the ATHLETA marks in great detail. The Court concluded that use of the marks on US websites does not constitute relevant use in a UK revocation for non-use counterclaim. It determined that "purely foreign use" cannot be taken into account.

Similarly, the Court noted that a US retailer posting on Instagram is not, by that act alone, attempting to create or maintain a market for those goods in every country worldwide. There must be additional factors such as specific targeting to establish such an intention. The Court commented that its task was to arrive at a “fair” specification of goods and services, having regard to the use which had been made of the marks. It was for Athleta to prove use of its trade marks for the goods and services covered in its specifications. Overall, the Court held that Athleta had only provided genuine use of the below mark on clothing.

This mark was revoked for all other goods and services. Genuine use of the ATHLETA word mark had been demonstrated for bags, clothing and headgear. Similarly, the remainder of the specification was therefore revoked for non-use.

Trade mark infringement

The Court considered that the competing marks are visually, aurally and conceptually similar. However, there was no evidence of actual consumer confusion. On the key question of trade mark infringement, the Court concluded:

• There is no likelihood of confusion between the ATHLETA word mark and ATHLECIA when used on clothing or bags. This is because the ATHLETA word mark is weakly distinctive. Therefore, it is not entitled to a scope of protection that would include ATHLECIA.

• There is a likelihood of confusion between the following competing marks and when both marks are used on clothing. This is because the roundels are sufficiently similar, particularly taking into account imperfect consumer recollection.

The trade mark infringement claim therefore succeeded regarding the above figurative mark on clothing, but otherwise failed.

Passing off

Finally, in deciding the passing off claim, the Court concluded:

• Athleta had established goodwill in ATHLETA for clothing but not bags.

• There was no goodwill in the mark which “has not really been used significantly in the United Kingdom in relation to clothing or bags.”

Despite the goodwill in ATHLETA, a substantial proportion of consumers will not be misled by SGD’s uses of ATHLECIA. Consumers will understand they are different activewear brands. The passing off claim therefore failed.

Comment

There are a number of takeaways for brand owners. On the issue of use of a trade mark, brand owners who are operating online should keep up to date records of where they are targeting their goods and their marketing spend.

In this case, the fact there “are no bricks and mortar stores operating under the brand ATHLETA, nor the bringing together of the goods of others under the brand” was taken into account. Equally, mere posting on social media or a website without active targeting is unlikely to amount to genuine use of a mark in a particular territory.

The case also serves as a reminder of the limitations of seeking to enforce marks which are not highly distinctive.

Lastly, before initiating litigation for trade mark infringement or passing off, brand owners should try and obtain evidence of consumer confusion as this will undoubtedly strengthen any enforcement claim.

For more information and expert advice, contact a member of our Intellectual Property team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.