Nike Inc. (NYSE:NKE) has been given the green light to feature three stripes on some of its trouser designs in Germany following a court ruling.

The ruling marks a significant moment in the ongoing legal battle between the U.S. sportswear giant and its German competitor, Adidas AG (OTC:ADDYY).

The Duesseldorf regional court had previously barred Nike from using two or three stripes on five of its trouser designs after Adidas filed a trademark infringement lawsuit in 2022, according to a report from Reuters.

However, the court partially overturned its earlier decision in a second appeal hearing.

Nike is now permitted to use the stripes on four of the five disputed models, with the restriction remaining for one model, according to the court's statement.

This ruling adjusts the initial verdict, which had favored Adidas entirely. Adidas is known for vigorously defending its iconic three-stripe trademark globally.

Despite this, the German brand chose to withdraw its legal challenge against the Black Lives Matter organization's use of a yellow three-stripe logo last year, fearing that the objection might be interpreted as a stance against the anti-racism movement.

Nike has argued that Adidas' claims on the three-stripe design are overly restrictive. The company maintains that striped decorations do not necessarily denote a specific brand, challenging the breadth of Adidas' trademark protections.

Price Action: NKE shares were trading higher by 0.20% at $91.93 at the last check on Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.