A dispute regarding trademarks with reputation recently gave the Business Court of Milan “A” the opportunity to reiterate some of the principles relating to their protection. By judgment of 13 February 2015, the Court in fact ruled on the use of the trademarks “D&G” and “Sicily” held by Dolce & Gabbana, who challenged the use of the same signs for food (chewing gum) by the company and relevant director sued, demanding protection among others pursuant to art. 20 (1) (c) of the Italian IP Code (“IPC”).

As known, the abovementioned provision grants the registered trademark holder the right to prevent all third parties without consent from using in the course of trade “any sign which is identical with, or similar to, the registered trademark in relation to goods or services which are not similar to those for which the trademark is registered, where the latter has a reputation in the country and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trademark”. In the case at issue, the Court states, the enforced trademarks undoubtedly enjoy a reputation, and “their illicit use constitute an undue tool to lure consumers, making them mistakenly believe that the same company or the same organisational structure has entered a new market sector”. This use is detrimental to reputed trademarks as it “affects the distinctive character of the marks. Acting on the symbolic and evocative value that the trademarks have subliminally achieved amongst the public, the defendants obtained an unfair advantage represented by the goodwill engendered also by the association, on the part of the consumer, with the products marketed by the plaintiffsAnd, as known, this unlawful lure, even for products or services which are not similar to those protected by the trademark, violates the rights of the trademark holder, since it represents a parasitic coupling of the products or services of the imitator to the image of the imitated trademark, so as to allow the defendants to acquire on the market a specific space that otherwise they would not have occupied“. From here, the judgment concludes, derives the applicability to the present case of the protection granted by Article 20 ( 1 ) ( c ) IPC.

On the other hand, the defendants’ conduct is also sanctioned by the judges as amounting to unfair competition. In particular, the judgment primarily states that such conduct amounts to unfair competition under art. 2598 (1) (1) Italian Civil Code (“ICC”), under which anyone who “uses names or distinctive signs capable of producing confusion with the names or signs legitimately used by others, or slavishly imitates the products of a competitor, or puts in place, by any other means, acts liable to create confusion with the products and the business of a competitor” commits unfair competition. In the present case, the judges in fact observed that “the packaging used by the defendants, bearing the sign “DG” and a design recalling a leopard’s mantle, determines a confusion on the market and a link to the original trademark (so-called “initial confusion”), and also a confusion following the use of the product (so-called “post-sale confusion”) because a consumer of average intelligence mistakenly links the product to the fashion house Dolce & Gabbana or to the “Sicily” product in the relevant case“.

Secondly, the Court considered that the conduct of the defendants also constitutes unfair competition under art. 2598 (1) (3) ICC, under which anyone who “uses, directly or indirectly, any other means which do not comply with the principles of professional correctness and is capable of damaging the other’s business” commits unfair competition. Specifically, the judgment says, the professional misconduct of the defendants is made evident by: 1) the fact that they had already concluded a settlement agreement with Dolce & Gabbana relating to the use of the D&G trademark, but they had then repeatedly and systematically violated that agreement; 2) following the signing of that agreement, the defendants began to violate even the brand Sicily (which, the judges said, “seems to correspond to the systematic and repeated mimicking of the actions of another entrepreneur otherwise known as parasitic competition, aimed at taking advantage of the other’s reputation“); 3) an interim injunction had already been issued but the defendants had failed to comply with it, repeatedly offering the infringing products for sale.

Of particular interest, then, is the finding that as liable for the illicit acts at issue, not only was the company sued, but also the sole director and partner, personally. The ruling states that he had had a “central and autonomous role in the commission of the illicit acts“, so that “to the same extends the company’s liability for infringement and unfair competition, being he a natural person who, because of the position covered (the sole shareholder and director of the company who put in place the illegal conduct) actually and effectively contributed in the infringement“.

In conclusion, the defendants were therefore condemned to pay the damages caused and the costs of litigation, in addition to the withdrawal from the market and destruction of counterfeit products, and enjoined from continuing the infringement, with the establishment of a penalty of € 1,000 for each day of further violation. The Court also ordered the publication of the judgment as a specific form of compensation for the injury suffered by the plaintiff, “being it appropriate to restore the correct commercial information regarding the ownership of the trademarks in dispute“.