Trademark litigation in the fashion world is not a novel concept. For decades, Adidas has been engaging in a long list of trademark infringement cases in the US and across the world. Ending a case that had been active since 1997, on October 8th of this year, the Dutch Supreme Court shot down Adidas’s bid to appeal a trademark infringement decision made by the Hague Court of Appeals that pointed to the difference between Adidas’s three-stripe mark and H&M’s usage of two vertical stripes on the sides of t-shirts and athletic trousers. Meanwhile, this past summer, Adidas filed a trademark infringement and dilution complaint against Thom Browne in New York Federal Court, claiming that Thom Browne infringed Adidas’s three-stripe mark by selling athletic apparel and footwear with two, three, or four parallel stripes in a “manner confusingly similar.” Even though Thom Browne is already well known for its placement of four stripes on suits and other formal wear apparel (which use by Thom Browne is allegedly consented by Adidas).

While these cases exemplify the tension between different brands and their trademarks, they also allude to the growing misalignment between the luxury fashion industry and trademark law. Traditionally, trademarks and trade dress have been used to communicate price and quality information to a consumer about the goods they are purchasing. Brands like Tide, Sharpie, and Nintendo sell at a premium because customers trust that they’re getting high quality products. However, within the fashion industry, and particularly regarding Veblen goods and other luxury items, the strength of a brand’s trademarks often lies not in the actual quality of a brand’s goods but rather in the status they confer upon its wearer. The brand itself becomes the product, and people are willing to pay a premium for anything associated. For example, one can hardly argue that a single clay brick is worth $30, but emboss it with a Supreme logo and that very item is sold out within minutes. But while trademark law may be equipped to handle the protection of Supreme’s logo, I argue that it is ill equipped to handle the full range of brand and value development strategies in the luxury fashion world.

Just as Adidas’s three stripes signify to an audience that a consumer is wearing a particular brand, there are other ways that companies can evoke a sense of luxury, sometimes in ways that can’t be trademarked. Take Chanel: For generations, the company has continued to produce and develop its iconic tweed jacket, eventually turning it into an instantly recognizable classic. Because of its success, many other brands now produce their own, very similar, tweed jackets, no doubt inspired in part by the success and status of the original. And while Chanel may be able to protect specific parts of their jackets through trademark law, for example the Chanel embossed buttons, they are unable to do so when recognition of the product hinges on non-trademarkable and utilitarian aspects like material choice and silhouette. The lack of a comprehensive trademark protection schema creates a gap through which other companies can create their own versions of this style of clothing, subsequently giving fashion writers, critics, and consumers the power to not only put Chanel trademarks at risk of genericide but simultaneously gives them the power to dilute the product’s value through associations with brands of “less status” (for example, Alexander Wang’s F/W 2016 show, containing various tweed jackets, dresses, and mini-skirts, was described by many reporters as Chanel-inspired). Because the functionality of tweed jackets blocks any company from claiming trademark rights over this particular type of product, it puts at risk the value and exclusivity Chanel has striven towards over the past century through continuing cycles of development and marketing of this tweed jacket. Indeed, fast fashion has already flooded the market with similar products at a lower price point. Trademark law, though effective in helping brands protect their names, symbols and other logos, nonetheless cannot be relied upon to fully ensure a fashion brand’s protection of its image and value.

One of these jackets is H&M, and the other is Chanel: can you tell which is which? What if you were far away and couldn’t see the Chanel button detailing or the tag?

For Adidas, time will tell whether they succeed in their claim against Thom Browne, and more broadly reveal how they continue to navigate the challenges of brand ownership and development. As more and more fashion companies expand into the athletic apparel space, Adidas will need to think creatively and intelligently as they continue testing the boundaries of what they can and can’t claim with regards to their brand value, brand identity and trademark law.