On 17 February, the Milan IP Court (Judge Mrs Zana) issued an interesting order relating to unregistered design protection and parasitic unfair competition with reference to the copy of the designs of some fabrics.
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The proceedings were initiated in late December 2015 by an historic Italian cotton mill specialising in the manufacture and sale of fabrics for high-end shirts (the “claimant”) against another Italian company active in the resale of fabrics (the “defendant”). The latter was accused of having infringed the rights of the cotton mill through the commercialisation of 54 models of tissues constituting copies of those of the applicant. The company defended itself stating that: i) it did not produce but rather purchased the fabrics from Chinese companies; ii) the latter started manufacturing the fabrics in question before the claimant, which determined a lack of novelty – and therefore of protectability – in the enforced designs; iii) in any event, its fabrics were different from those of the claimant.
In the order under review, the judge preliminarily assessed the validity of the claimant’s unregistered designs and their consequent protectability at the Community level for three years from disclosure, pursuant to EC Regulation no. 6/2002. In particular, the decision stated that the claimant had provided adequate proof of the exhibition of its fabrics at the “Unica” trade fair in Milan (one of the largest fairs in the industry) in September 2014 and February 2015. This was deemed sufficient to “infer the probable knowledge of the specific tissues in question in the specialised circles“, as required by the Regulation so that they could be protected as unregistered designs. On the other hand, the judge continued, the respondent had not provided evidence of previous marketing by its Chinese suppliers, which evidence should have been provided with regard to marketing in Europe, in order to deprive the claimant’s designs of novelty. The latter then possessed the “novelty” requirement imposed by the law, in addition to the “individual character” also required for their protection: the products in fact generated in the informed user a dissimilar impression compared to those disclosed previously, given the “peculiar combination of lines and colours” that characterised them.
Having thus ascertained the validity and protectability of the designs, the judge also ascertained their infringement by the defendant’s fabrics, all of this obviously within the limits of preliminary proceedings. In this regard, the decision first stated that, being unregistered designs, the protection of the same is limited to their reproduction by third parties, and cannot be extended beyond the cases of overlap (unlike for the registered design, where the protection “includes any design which does not produce on the informed user a different overall impression“). This consideration is actually debatable, as confirmed by the same decision, which mentions the authors stating that the scope of the exclusive rights granted to a design cannot change depending on whether the same design has been registered or not. In any case, in the proceedings in question, the judge believed that such overlap occurred: “the variants (which are present in only some of the defendant’s designs) are so small and imperceptible even to the informed user (consisting of minimal variations in the shades of colours or in the design size) to make the fabric at issue completely identical“.
In addition, the decision considered that the defendant’s conduct also constituted parasitic unfair competition under Art. 2598 (1)(3) Italian Civil Code, being made of several acts (i.e. copying 54 models) that, taken as a whole, amounted to the exploitation of another’s work contrary to honest practices, resulting in the misappropriation of the claimant’s research and development investments in order to enter the market at a reduced cost. In fact, the judge noted, “the fact that we are talking of 54 designs, which constitute 13.5% of the defendant’s entire collection, makes it implausible from a mathematical-probabilistic viewpoint to believe that the reproduction of the same formal solutions was accidental and unconscious and therefore configurable as a sort of coincidence“.
In light of the above, also finding that the production of the fabrics by the Chinese suppliers did not exclude the wrongfulness of the marketing put into place by the defendant, the judge enjoined the latter from further commercialising the fabrics in question, with a penalty of € 1,000 for each subsequent violation, ordered the publication of the order in “Il Corriere della Sera” and “Vogue”, and condemned the defendant to pay the legal fees of € 7,000 in addition to 15% of overheads and accessories.
The decision might now be appealed, or called into question in possible merits proceedings between the parties.