A New York federal court has finalized a win for Thom Browne in the closely-watched trademark battle waged against it by adidas over stripes. In a July 29 opinion and order, Judge Jed Rakoff of the U.S. District Court for the Sothern District of New York reconfirmed the court’s May 3 “bottomline” order, in which it denied adidas’s motion for a new trial. On the heels of a January 2024 jury finding that Thom Browne did not infringe adidas’ three-stripe trademark by way of its use of a “four-bar and grosgrain” design on activewear, adidas (unsuccessfully) lodged an appeal with the U.S. Court of Appeals for the Second Circuit and also filed a motion for relief from judgment with the district court based on Browne’s failure to produce four emails during the parties’ discovery.
Adidas argued in its motion for relief from judgment and corresponding bid for a new trial that the four emails – which were produced in a separate trademark lawsuit between the parties in the United Kingdom but not in the U.S. – show that Thom Browne employees, including Mr. Thom Browne, himself, “knew that there was a likelihood” that Thom Browne’s four-bar design could be confused with adidas’s three stripes mark. At the same time, the German sportswear giant also argued that if presented to the jury, the content of the emails could have changed the outcome of the case.
With the foregoing in mind, adidas argued, among other things, that the non-production of the four emails “must have been the product of intentional, bad faith conduct on the part of Thom Browne, and that even if the non-production was purely accidental, it still constituted ‘misconduct,’” thereby, justifying relief pursuant to Rule 60(b)(3). (Under Rule 60(b)(3), a court may relieve a party from a final judgment, order, or proceeding on the basis of “misconduct by an opposing party.”)
In opposing this portion of adidas’s motion, Thom Browne argued that “some intentional misconduct” was necessary for Rule 60(b)(3) to apply, and that adidas had failed to show that that its non-production of these emails was intentional.
Likelihood of Confusion
Siding with Thom Browne, Judge Rakoff stated in his opinion, as first reported by TFL, that while the four emails are “not irrelevant” to adidas’ case, they “hardly seem material to the central issues … as they actually played out at trial.” For instance, the court stated that the jury, by way of their verdict, “plainly indicated that they were not persuaded by the much more directly relevant evidence that adidas presented.” This includes the results of an adidas-commissioned consumer survey that showed actual consumer confusion between its three-stripe mark and Thom Browne’s allegedly infringing design. (The survey polled 2,400 consumers in the U.S. and showed that somewhere between 14 percent and 38.6 percent of consumers were confused, depending on the product type.)
“The four emails now at issue, even when viewed most favorably to adidas, express the view of a few individuals at Thom Browne and FC Barcelona” – the European football team that Thom Browne collaborated with – that there was “a risk of confusion,” the court stated. “By contrast, [the] survey purported to show that hundreds of consumers were in fact confused.” If the jury was “willing to believe that there was a risk of confusion between the two marks,” Judge Rakoff asserted that “the views of these actual consumers would presumably have been far more powerful [for the jury] than the views expressed in the four emails.”
Beyond that, Judge Rakoff asserted that “the essence of Thom Browne’s defense in this case was simply that adidas’s claims amounted to a contention that they owned all stripe designs and that this was a masked attempted to monopolize the sportswear market.” In fact, in his closing statement, counsel for Thom Browne summarized this argument by declaring that “this case isn’t about confusion. It isn’t about competition. It’s about whether adidas can own all stripes.” Further weighing in Thom Browne’s favor, the court stated that its “perception of the jury’s ‘body language’ [in response to the aforementioned argument] suggests that it was this argument that most likely influenced the jury in Thom Browne’s favor.”
This is significant, according to the court, as the four emails now at issue “say nothing about this argument.”
Alleged Misconduct
In addition to claiming that the emails would have been relevant to the outcome of the trial, thereby, warranting a new trial, adidas also argued that Thom Browne’s non-production of the emails constitutes “misconduct” under Rule 60(b)(3). In order to successfully argue misconduct, Judge Rakoff stated that adidas needed to show by “clear and convincing evidence” that Thom Browne was obligated to produce the emails at issue and failed to do so – at least as a result of negligence. Given that the non-production was the result of “a miscommunication between Thom Browne’s counsel and its e-discovery vendor” and since there is “no evidence in the record that suggests the non-production … was intentional or knowing,” the court found that adidas did not satisfy its burden of establishing misconduct.
TLDR: The Court determined that adidas failed to show either that “the four emails probably would have changed the outcome of trial as required to obtain relief pursuant to Rule 60(b)(2) or that Thom Browne engaged in ‘misconduct’ in failing to produce the emails as required to obtain relief pursuant to rule 60(b)(3).”
The parties’ stateside case may be over but they are still locked in international clashes over stripes, including in the United Kingdom, where they went to trial on July 17. In that separate but similar case, counsel for adidas argued before the High Court of Justice in London earlier this month that Browne has infringed adidas’ well-known three-stripe trademark and escalated its infringement scheme by launching a competing activewear collection that “strikes at the heart of adidas’ business.” Meanwhile, Thom Browne’s legal team argued that adidas has engaged in an attempt to monopolize the market by way of its three-stripe mark, weaponizing its trademark rights to “threaten the basic freedom of fashion designers to design clothing in the manner they wish.”
The case is adidas America, Inc., et al., v. Thom Browne, Inc., 1:21-cv-05615 (SDNY).
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