By first instance decision no. 5732/16 of 3 May, the Milan IP Court granted protection to the “Gancini” trademark held by Salvatore Ferragamo S.p.A. against the competitor DC Brands International Ltd. Here are Ferragamo’s three registered trademarks enforced in the proceedings, the first two being national trademarks and the third being a European (three-dimensional) trademark.
Click here to view the image.
According to Ferragamo’s defences granted by the Judges, DC Brands marketed bags in Italy belonging to the “LYCD” collection and bearing a trademark identical to the “Gancini” trademark: it in fact sold – and delivered – the bags to an Italian retailer against which Ferragamo had already initiated legal proceedings (and then entered into a settlement which involved the payment of damages).
On the infringement of the trademark by DC Brands, the Judges observed: “All the bags at issue have, at the closing on the front, and for purely decorative purposes, a three-dimensional hook consisting of an upside down omega having size and overall appearance almost equal to that of Ferragamo, which does not add any additional utility to the model on the whole, poorly concealing the fraudulent intent of a direct reference to the famous luxury brand. (…) the choice of DC Brands to combine its own brand with a blatantly counterfeit version of the ‘Gancini’ trademark cannot be ignored (…). This combination could easily lead the consumer into error about the possibility that the bags belong to a secondary collection by Ferragamo, or are the result of a collaboration between brands; or may even lead to the belief that a trademark licence agreement is in force between the two companies: the idea of launching ‘limited edition’ collections realised through the collaboration of celebrated artists, designers, and stylists with chains such as H&M is not strange (think of the collections by Cavalli, Versace or Jimmy Choo for H&M)“.
The Judges then noted that the commercialisation put in place by DC Brands also amounted to unfair competition against Ferragamo under art. 2598 of the Italian Civil Code (“c.c.”): “the DC Brands products are of the same kind as those marketed by the plaintiff. It is undeniable that the reference to the more well-known brand, faithfully reproduced by the defendant, in addition to causing the danger of confusion provided by art. 2598(1) c.c., brings immediate and unfair advantages to the competitor given by the parasitic exploitation of the trademark reputation, causing a nullification of the investments made by the plaintiff in its brand protection“.
Consequently, the judgment ascertained both the infringement of the plaintiff’s trademarks and the unfair competition for the passing off and parasitic hooking put in place by the defendant against Ferragamo, and enjoined the defendant from continuing such conduct, with the fixation of a penalty for each subsequent violation.
Moving on to the assessment of damages, the Judges preliminarily rejected the DC Brand defence that this was already covered by the settlement agreement between Ferragamo and its Italian retailer. On the one hand, the ruling states, “every person involved in the distribution of the goods is autonomously and independently liable. Therefore, that settlement is not relevant for the quantification of the damages due from the defendant“. On the other hand, even if this was not the case, in order to benefit from that transaction, the defendant should have stated it expressly, as required by art. 1304 c.c., which it failed to do.
The ruling, consistent with the plaintiff’s requests, therefore ordered the restitution of the infringer’s profits to Ferragamo, in addition to the compensation for non-pecuniary damages due to the brand dilution. In addition, it ordered the defendant to withdraw the infringing products from the market, to pay the costs of the litigation and to publish the decision once in Vanity Fair magazine and the Corriere della Sera newspaper (at double the normal font size), and, for thirty consecutive days, on the home page of the website www.lycd.co.uk.