(An Italian version of this post is published on Diritto 24 – Il Sole 24 Ore)

By judgment no. 3806/15, published a few days ago, the Italian Supreme Court ruled on the infringement of an earlier registered trademark by a company name and corresponding unregistered trademark containing a surname identical to the earlier mark. Specifically, the earlier registered trademark was the CTM “Alessi”, held by the plaintiff Alessi S.p.A., operating in the advertising industry, whilst the defendant, operating in the same field, was named “Exclusive di Giacinto Alessi s.r.l.” and used the corresponding unregistered trademark.

In the proceedings on the merits, the seised District Court and Court of Appeal of Palermo, at first and second instance respectively, had excluded any infringement of the Alessi trademark, believing that its subsequent use in the Exclusive’s company name and unregistered trademark had a mere descriptive function, did not cause any likelihood of confusion, and was therefore legitimate. The Supreme Court expressed a different view, which in the judgment under review traces the principles on the limitation of the use of the surname corresponding to a prior registered trademark.

The Court noted that “once a sign consisting of a legal name was validly registered as a trademark, even the person who legitimately has that name can no longer adopt it (as a trademark) in identical or similar business sectors. The right to a name is, therefore, clearly compressed, in the economic and commercial activities” by the prior registration of the name as a mark by another party.

It is true that, under Article 21 of the Italian IP Code, a person retains the right to use his/her name in business despite the existence of another’s registered trademark; and yet, recalls the Supreme Court, this right exists only if that use is “consistent with the principles of professional fairness”. Accordingly, the writer adds, although Article 2563 of the Italian Civil Code requires that “at least the last name or initials of the entrepreneur” be included in the company name, art. 2564 ICC states that “when the company name is identical or similar to that used by another entrepreneur and can be confusing for the object of the company and the place where it is run, the second company name must be supplemented or amended with indications capable of distinguishing it”.

In the case at issue, the Court continued, the earlier trademark “Alessi” had to be considered a strong trademark (having no link with the advertising products/services offered), and its inclusion in Exclusive’s trademark and company name could be lawful only if it was “justified by the existence of a real need to describe the activities, products or services” of Exclusive. On the contrary, that trademark simply corresponded to the surname of one of the shareholders of Exclusive, which “does not connote the goods or services offered by the same company” and is not required to describe the latter; so much so that “the shares could be sold without the need to consequently change the company name”.

The Supreme Court therefore concluded by invoking the principle already expressed in judgment no. 6678 of 1987: “if two corporations fit, in their name, the same surname, which in both cases identify the companies, and a possibility of confusion occurs in relation to the object and the place of their activities, the obligation to make additions or modifications appropriate to differentiate that name, posed by art. 2564 ICC on the second company to use it, is not waived when said name is the name of an individual entrepreneur” owning the company’s shares.