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Why Adidas’ Lawsuit Against Thom Browne Is About More Than Just Stripes

By newadmin / Published on Friday, 06 Jan 2023 17:29 PM / No Comments / 4 views

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After more than a decade of legal wrangling, a jury in New York will in the coming weeks decide whether Thom Browne can keep his stripes.

Adidas sued the designer and CFDA chairman in 2021, alleging his namesake label is using a four-stripe pattern that’s confusingly similar to the activewear giant’s three-stripe logo, including on sportswear basics such as hoodies and joggers. Thom Browne argues that the two companies are not direct competitors, and that shoppers are unlikely to confuse his $750 leggings with Adidas’ much more affordable offering.

The trial began earlier this week and could conclude as soon as late next week, according to court documents.

The particulars are similar to countless other legal actions brought by designers and brands who felt their work was ripped off. But there’s more at stake here than who has the right to put parallel lines on a shirt.

The outcome of the case could expand the power to enforce trademarks across the fashion industry and beyond, at a time when what it means to be a fashion brand has fundamentally shifted. Today, few brands stay within the confines of their niche specialty, such as luxury suiting or running shoes. To grow and scale, it’s increasingly necessary to launch new categories, collaborate with other brands and operate across multiple price points. Regardless of the verdict, the Adidas-Thom Browne case will set new parameters for how brands go about this process.

The conflict goes back to 2007, when Adidas demanded the designer cease using what was then a three-stripe motif on a sport coat. The label switched to a four-stripe mark, and all was well. For a while.

Thom Browne put the four stripes on everything from hoodies to overcoats to socks. The designer sold his brand, which he founded in 2001, to Zegna in 2018 in a deal that valued the brand at $500 million. In 2021, Thom Browne generated €263 million ($280 million) in revenue (Adidas reported €21 billion in revenue in 2021).

It was Thom Browne’s expansion into activewear that put the brand back on Adidas’ radar, Adidas claims. In November 2020, the label released an official line of running apparel that included shorts, compression T-shirts and other athletic gear featuring the signature four stripes. Timing is a key point of contention: Thom Browne claims it’s offered sportswear-inspired products since its early days.

In June 2021, Adidas filed a trademark infringement lawsuit in New York federal court, claiming that because Browne had ventured beyond suiting and formalwear into “athletic-style apparel,” his stripes were once again “confusingly similar to Adidas’ three-stripe mark.” The conflict hinges on whether Thom Browne’s use of stripes on its casual sports-inspired styles creates confusion for consumers who would otherwise associate the stripes with the German sports giant.

Thom Browne has argued that the two brands are not direct competitors because they are in different sectors of the market, it as a luxury brand and Adidas as a mass player. The label also claims that Adidas, after 14 years, had missed the reasonable window of time to take legal action.

But what makes the case so interesting lies between the lines of legal text: both Thom Browne and Adidas have stepped outside the boundary that back in 2007 marked their respective domains in fashion, said Jeff Trexler, associate director of the Fashion Law Institute.

It’s true that Thom Browne has leaned into activewear, including becoming the official uniform maker for Spanish football club FC Barcelona in 2018. As consumers at all income levels have embraced more casual fashion, many other luxury brands have made similar moves. Even Zegna, best known for its suits, is basing its growth strategy around everyday attire.

Adidas also encroached upon Thom Browne’s territory, partnering with luxury brands like Gucci and Khaite in recent years. At $850, a pair of Adidas X Gucci Gazelles is more expensive than Thom Browne’s tech runners.

“It’s like in international politics, where you have peace as long as you stay in your own territory,” said Trexler. “You have one superpower with a sphere of influence and another with its own sphere of influence, and as long as they remain separate, they’re not going to fight.”

Thom Browne and Adidas are hardly the only fashion companies vying for market share outside their primary specialty. Today, collaborations and category expansion are key drivers of growth for brands big and small. In theory, a number of fashion companies can find themselves in the same position as Browne or Adidas, forced to defend a signature style because they’ve “crossed streams,” so to speak, with brands that are far from direct competitors.

“The idea that a brand is confined to one elite market and there are other brands out there to colonise other parts of the market, that’s an old idea. It’s a dying or already dead idea,” Trexler said. “Today, no brand will say any product line is off limits. Anywhere from sneakers to socks to belts to bed linens and cookware, brands want to be lifestyle brands, where they can conquer everything.”

Depending on the outcome of this week’s trial, brands may have to exercise more caution when it comes to new products and partnerships.

“This is going to make a lot of business for lawyers in the coming years,” Trexler said.

THE NEWS IN BRIEF

FASHION, BUSINESS AND THE ECONOMY

Katrina Lake. Courtesy. Stitch Fix

Stitch Fix to cut 20 percent of salaried workers as chief executive steps down. Founder Katrina Lake said she would return to the CEO role and announced layoffs amid slumping sales. In the three months ended Oct. 29, Stitch Fix’s net revenue fell by 22 percent from a year earlier, while active clients fell by 11 percent.

Britain’s Next sees lower profit in 2023 as consumer outlook darkens. The group raised its pretax profit forecast for the current year which ends this month to £860 million ($1 billion) from a previous forecast of £840 million after full price sales rose a better-than-expected 4.8 percent in the nine weeks to Dec. 30. But it forecast full price sales down 1.5 percent and pretax profit of £795 million, down 7.6 percent year-over-year.

Everlane slashes 17 percent of corporate workforce. The DTC basics brand announced internally on Wednesday that it will cut staff to help improve profitability by the end of the year amid rising inflation and recession fears, according to an internal email viewed by BoF.

Rolex gets more expensive in UK and US with latest price hikes. Rolex prices climbed by an average of about 2.6 percent in the UK and 2.2 percent in the US, according to analysts at Barclays.

Hong Kong’s retail sales post surprise drop in November. Retail sales value fell 4.2 percent from a year ago, the Census and Statistics Department said Wednesday. That was far worse than the economists’ forecast of a 4.8 percent rise. It was the worst performance since March, when sales plunged 13.8 percent.

THE BUSINESS OF BEAUTY

Morphe parent Forma Brands is reported to be exploring options to shore up its finances.

Morphe brand, once valued at $2 billion, closing all US stores. On Thursday, the beauty label listed about 20 locations on its website.

PEOPLE

Amy Hauk

Victoria’s Secret brand chief executive Amy Hauk departs. Hauk will step down as chief executive of the Victoria’s Secret and Pink brands effective Mar. 31, according to an SEC filing from the company on Tuesday that also announced the completion of its acquisition of DTC lingerie brand Adore Me. Martin Waters, CEO of Victoria’s Secret & Co. will assume her responsibilities.

MEDIA AND TECHNOLOGY

A collage shows six MetaBirkins in different colors, including one in bright yellow and another emblazoned with a reproduction of the Mona Lisa.

Hermès and the MetaBirkins creator are set to go to trial. In a one-page ruling on Dec. 30, US district judge Jed Rakoff shot down each side’s hopes of obtaining an immediate conclusion to the saga, with a trial set to commence on Jan. 30.

Compiled by Joan Kennedy.

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