Background

Over the course of 2009, some French operators in the sector for leather footwear and, more generally, leather goods, filed an action on the merits before the Court of Milan, Company Law Division, requesting the court to issue a declaration of invalidity and/or a declaration of illegality of the trademarks owned by the Italian National Tanning Industry Association, the Unione Nazionale Industria Conciaria (hereinafter UNIC).

Those marks revolve around the “vachetta”, meaning “little cow”, which is a stylized depiction of an animal skin. The marks include the logo alone, shown in the UNIC trademark (http://jacobacci-law.com/_nodnn/20160330-imgA.jpg) as well as the logo accompanied by verbal expressions such as “vera pelle” and “vero cuoio” – “genuine animal skin” and “genuine leather”, respectively –, as well as other lesser-used variations like “vera pelle italiana” and “vero cuoio italiano” – meaning “genuine Italian animal skin” and “genuine Italian leather” – and “cuoio tradizionale ad alta qualità”, which translates to “high-quality traditional leather”.

The UNIC marks were registered in the 1970s, however it was only in 2007-2008 that the UNIC began to license the marks consisting of the logo alone and the logo accompanied by “vera pelle” and “vero cuoio”. Companies that did not enjoy the benefit of a license for such marks became vulnerable to numerous customs stops and seizures of footwear products arriving from abroad and bearing the cow hide logo.

Meanwhile, European Directive 94/11/EC, which was implemented in Italy in 1996, regulates the practices for labelling for the footwear industry in Europe concerning the use of symbols that are capable of identifying the materials used in the production of these items. The symbol selected by the Directive to identify leather goods is that of a stylized animal skin (http://jacobacci-law.com/_nodnn/20160330-imgB.jpg). This symbol is  essentially identical to the UNIC ‘s vacchetta  trademark.

The court action was therefore commenced to obtain not only the invalidity of the trademarks at issue, but also a declaration that the licensing agreements provided by the UNIC were null and void, due to the fact that they constituted a violation of the European norms in the area of freedom of competition.

Partial decision by the court of first instance

As previously published on Lexology [http://www.lexology.com/library/detail.aspx?g=3c700e2a-4603-4323-90d4-279aee4c0909], the Court of Milan issued a partial and non-definitive decision in 2013 in which it declared the vachetta null and void because it lacked the requirement of novelty at the time it was filed in 1977, given the well-established diffusion of the sign on the global scale since 1800. The Court also held that the sign was invalid as contrary to the law, finding that the UNIC’s monopoly over the sign was incompatible with European norms in the area of labeling for footwear products as set forth in Directive 94/11/EC.

Following its issuance of this partial decision, the Court then elected to suspend the proceedings in order to investigate the remaining allegations set forth by the plaintiff, including those relating to the other marks at issue and antitrust claims.

Appeal of the partial decision  

The UNIC appealed the partial decision before the Court of Appeal of Milan, which rejected the appeal and confirmed that the decision of the lower court in its entirety, finding that the vachetta is invalid because it lacks novelty and is contrary to the norms provided by law. The UNIC then appealed this decision before the Italian Supreme Court, which case is currently pending.

The final decision of the Court of Milan

The Court of Milan then proceeded to issue its full and final decision in the first instance. On 15 January 2016, the Court declared the additional vachetta logo presented by the UNIC during the course of the proceedings, which was identical to that registered the 1970s that was declared invalid by the Court and confirmed on appeal, invalid. Analogously to the partial decision, the declaration of invalidity was based on the lack of novelty (given its general use since the beginning of 1900s and the fact that the mark was found to be in conflict with the norms set forth by Directive 94/11/EC).

The Court further found that the monopoly held by the UNIC was entirely incompatible with the norms in force, holding that the effect of the EC Directive is retroactive (an eventuality that may be recognized in exceptional situations where the purpose to be achieved prevails over legal certainty). In the instant case the scope foreseen by the Directive – the free use of the logo depicting an animal skin by operators in the sector when their products meet the legal requirements – did not permit the UNIC to hold a monopoly over the sign.

The Court therefore determined that the UNIC’s actions in restricting use of the vachetta was illegal as it created a prohibition on the free use of the cowhide logo in the Italian territory as of the date the law regarding labeling of footwear goods was enacted in Italy (1996), thus issuing an order that the UNIC may not continue  its conduct as seeking to prevent third party the use of the vacchetta trademark. On the other hand, the Court’s decision rejected the request for invalidity of the complex marks including the image of the vachetta along with the expressions “vera pelle” and “vero cuoio”, finding them to be valid despite the presence of a descriptive element (the logo itself) contained therein, and further rejected the other requests set forth by the plaintiffs.

Although the Court declared that the complex marks constituted by the logo along with the expressions “vera pelle” and “vero cuoio” were valid trade marks, it took a clear position by stating that the UNIC may not prevent operators in the sector from using the cow hide logo accompanied by the indications “cuoio/leather” or “pelle/animal skin” when the elements are placed and graphically presented in a manner that differs from the UNIC’s marks.

Conclusions

This decision, which may still be appealed, is of the utmost importance on both a national and international level in that the Court of Milan’s findings against the UNIC are immediately enforceable, and will remain so unless and until the decision is overturned by a higher court. Therefore, at present operators may use the cowhide logo, even accompanied by the indications “pelle/cuoio” (though not in the way that corresponds to the valid UNIC marks), with reference to leather goods directed to the Italian market, in conformance with the norms of the sector.