West Bank Resident Prevails Against Adidas in Israel Court

Galel Yassin, an Arab resident of the Palestinian administered territories imported cheap training shoes from China that were sold in local markets for NIS 20-30 (about $6-9). The shoes included four parallel diagonal stripes on each side and Adidas claimed that this infringed their famous three-stripe logo.

The Israel Customs Authorities seized the goods on entry into Israel for suspected trademark infringement. The importer tried to negotiate a compromise with Adidas, and offered to add a line crossing through the four stripes, or to add a big cross on top. Either solution would be implemented before the shoes would be released from the docks. To no avail.

In court, Judge Michal Agmon-Gonen dismissed claims by Adidas and ruled that there is neither an objective nor a subjective likelihood of confusion. Customers would be aware that the shoes are cheap substitutes and not market leaders. The importer clearly marked the shoes with the brand “Sydney” in three places and did not write Adidas or use Adidas’s three-leaf symbol.

Yassin provided evidence that other shoe manufacturers, notably Skechers, also use a four stripe decoration. Adidas cited previous rulings in their favor, both in Israel and abroad. Agmon-Gonen suggested that Adidas was aggressively throwing its weight against weak competitors, generally unable to bear the financial strain of defending themselves and saw this as trademark abuse. The Basic Law, Freedom of Trade, allows others to import footwear and competition is in the public interest. In addition to the market for leading brands, there is also a market for unbranded, generic products, and the four-striped shoe is such a generic alternative.

While accepting the existence of various legal doctrines such as dilution of famous marks, Agmon-Gonen considers these trends an issue of policy and generally considers the public good and competition of primary importance.

The gist of the ruling is that Agmon-Gonen is not enamored of recent trends that see brands and trademarks as property per se. She believes that trademarks should simply be an indication of the supplier or manufacturer of the goods thus marked. With such a narrow interpretation of trademark law, the legal issue is essentially that of likelihood of confusion. While prepared to acknowledge that the inspiration of the four stripe mark may well have been Adidas’s product line, there was no likelihood of confusion. Rather Yassin was providing a cheap alternative for the lowest socio-economic level.

Although some Israeli case law was cited, the 46 page ruling is more notable for referring to both recent and classical journal articles and textbooks, and for quoting the minority opinion in the A.Sh.I.R. case. (Appeal 5768/94 A.Sh.I.R. Import, Export & Distribution et al. vs. Forum of Accessories and Necessities LTD. et al.).

In conclusion, Adidas’s case was dismissed. Yassin is able to continue importing generic, non-branded training shoes and was awarded NIS 85,000 (about $23,600). Adidas is appealing.

The Case: T. A. 2177/05 Adidas-Salomon vs. Galel Yassin and others.