IP Law Daily, TRADEMARK NEWS: adidas alleges Fashion Nova’s use of Three-Stripe Mark breached prior settlement agreement, (Mar 7, 2025)

By Carolin Dennis, B.Sc., LL.B., LL.M.

The lawsuit alleges that Fashion Nova breached a 2022 settlement agreement from a previous trademark suit by promoting, offering for sale, and/or selling many of the exact same designs it had promised to discontinue.

An eight-count complaint has been filed against Fashion Nova, LLC (Fashion Nova) in the federal district court in Los Angeles, California, by adidas America, Inc. and adidas AG (collectively, adidas). According to the complaint, Fashion Nova’s willful infringement of adidas’s Three-Stripe trademark (Three-Stripe Mark) constituted a clear breach of its obligations under a 2022 settlement agreement. The complaint also alleges Fashion Nova’s marketing and/or sale of the infringing apparel and footwear is likely to cause consumer confusion and deceive the public regarding its source, sponsorship, or affiliation. The complaint seeks injunctive relief and damages for breach of contract, trademark counterfeiting, infringement, dilution, and unfair competition arising under: the laws of Oregon; the Lanham Act; the fair business practices and unfair and deceptive trade practices acts of several states; and the common law (adidas America, Inc. v. Fashion Nova, LLC, No. 2:25-cv-01878-PVC (C.D. Cal. filed March 4, 2025)).

Background. For decades, the Three-Stripe Mark has been famous among consumers in the United States and is associated specifically with adidas. Fashion Nova is a fast fashion company that has demonstrated a concerning disregard for the intellectual property rights of adidas. Their past lawsuits with adidas over the Three-Stripe Mark clearly indicated their awareness of adidas’s rights and the potential for infringement. In a settlement agreement between the parties signed in 2022 (the 2022 settlement agreement) resulting from one of the prior lawsuits, Fashion Nova (i) acknowledged adidas’s rights, (ii) agreed not to contest or impair adidas’s rights in the Three-Stripe Mark, (iii) agreed to stop selling apparel and footwear adidas had identified as infringing the Three-Stripe Mark (disputed products), and (iv) committed to stop manufacturing, marketing, or selling any product bearing the Three-Stripe Mark or any design, mark, or feature confusingly similar to it. However, Fashion Nova breached the 2022 settlement agreement by promoting, offering for sale, and/or selling many of the exact same designs it had promised to discontinue. Thus, adidas filed a complaint alleging that Fashion Nova’s breach of its contractual obligations has damaged adidas, and Fashion Nova’s ongoing breach of the 2022 settlement agreement is inflicting irreparable harm on it.

Three-stripe mark. adidas, one of the world’s leading manufacturers of athletic apparel, sportswear, footwear, and sporting equipment began using the Three-Stripe Mark on its footwear as early as 1952, both in the United States and globally. By 1967, the Three-Stripe Mark was also incorporated into their apparel line. The Three-Stripe Mark which is nonfunctional in its application and quickly came to signify the quality and reputation of adidas footwear and apparel. Fashion Nova began selling the infringing apparel and footwear long after adidas had established protectable trademark rights in the Three-Stripe Mark and well after the Three-Stripe Mark became famous among the general public in the United States. According to the complaint, the likelihood of confusion, mistake, and deception engendered by Fashion Nova’s misappropriation of adidas’s famous Three-Stripe Mark is causing irreparable harm to the goodwill symbolized by the Three-Stripe Mark and the reputation for quality that it embodies. Further, Fashion Nova’s marketing and sale of the infringing apparel and footwear is: causing adidas to lose control over adidas’s brand, as represented by the Three-Stripe Mark; diverting consumers from adidas; causing consumers to associate adidas’s Three-Stripe Mark with a cheaper, lower quality, and/or budget-minded brand; causing consumers to affiliate adidas’s Three-Stripe Mark and brand with imagery and/or communications that are different from those adidas wishes to have the consuming public associate with its Three-Stripe Mark; and diminishing the goodwill adidas has built up over numerous decades in the Three-Stripe Mark.

Claims, remedies sought. ITG asserts eight causes of action: (1) federal trademark infringement, (2) trademark counterfeiting, (3) federal unfair competition, (4) federal trademark dilution of the three-stripe mark, (5) state trademark dilution and injury to business reputation, (6) unfair and deceptive trade practices, (7) common law trademark infringement and unfair competition, and (8) breach of contract. Among other relief, adidas is seeking a jury trial, and asks the Court to: permanently enjoin Fashion Nova from distributing, marketing, or selling apparel and footwear using or bearing confusingly similar imitations of the Three-Stripe Mark; award adidas monetary damages and to treble that award; award adidas statutory damages; require Fashion Nova to disgorge all of its profits from its sale of the Infringing Apparel and Footwear; and award adidas punitive damages, attorney fees, and costs.

The Case is No. 2:25-cv-01878-PVC.

Judge: Castillo, P.

Attorneys: Kollin J. Zimmermann (Kilpatrick Townsend and Stockton LLP) for adidas America, Inc, and adidas AG

Companies: adidas America, Inc.; adidas AG; Fashion Nova, LLC

News: Trademark CaliforniaNews