Background
Appeal decision


On September 4 2013 the Milan Court of Appeal (Specialised Company and IP Division) issued a landmark decision in which it ordered the revocation for non-use of the famous LAMBRETTA trademark for motorcycles (the reasoning for the decision was published at a later date).

Background

LAMBRETTA had been one of the main trademarks in the Italian mechanical sector since the Second World War, when it was launched to designate a scooter which for many years was the main competitor of the Vespa scooter (still produced by Piaggio). Use of the LAMBRETTA mark by the original owner (Innocenti, which had registered it in Class 12 in 1947) ceased in 1971, when the transferee of the company's rights (Scooters India Ltd) moved the production facilities to India, exporting the motorcycles to Italy only until 1985.

In the 2010 first-instance proceedings, the Court of Milan decided that although use of the trademark had ceased, the fact that the new owner resumed use in 2002 was a sign of the company's intention to take advantage of the symbolic value of the old LAMBRETTA mark (however, the use was not for motor vehicles, but only for items of clothing and accessories).

Appeal decision

The appeal court reversed the decision, finding as follows:

  • Termination of use had occurred before December 31 1992, when the Italian legislation implementing the EU First Trademarks Directive (89/104/EC) entered into force.
  • Under the Italian law in force at that time, the renewed use was insufficient to counteract the revocation of the trademark, which had occurred in the meantime.
  • The transitional provision relating to this issue (now contained in Article 235 of the Intellectual Property Code) did not provide for the application of the new scheme – in line with the directive – to trademarks that had lapsed before the directive entered into force.(1)

Consequently, the court did not take a position on the relevance and effects of the renewed use of a trademark for products dissimilar to those originally manufactured by the mark owner. However, the decision stated that "a trademark can be adequately and sufficiently used only if its use is at least potentially able to alter the state of the market, and, consequently, at least potentially able to affect the competitors' position". The ruling is consistent with EU case law on this point.(2)

The decision thus seems to take the view that 'reputation' is not merely an abstract element that can be used and marketed independently; rather, reputation is a quality attached to a trademark, which must be valid and used on the market.

This point was expressly addressed in a Court of Milan decision,(3) in which the court declared that trademarks registered for luxury goods by the transferee of the original owner (which had continued to use the old trademark only for boat engines) and then transferred to third parties could not "take advantage" of the reputation related to the trademark ISOTTA FRASCHINI (still known today for being used until 1948 for the production and marketing of cars). In that decision the Court of Milan ruled that as significant time had passed since use of the trademark for cars had ceased, the new trademarks "could not take advantage of the connection with the old mark". Instead, they were deemed to be the result of "an independent initiative, legitimate because the previous trademark had been revoked" due to non-use, notwithstanding the enduring memory of that use. Consequently, the court declared that "since the trademarks are new, any arguments relating to the reputation of the [old] trademark are already included in the original court ruling", as those trademarks were considered to be "completely unrelated to the name and history of the automobile factory".

In Isotta Fraschini the parties owned registered trademarks that were different from the original mark (which related to the automotive sector and had been revoked for non-use), and the court specifically stated that "none of the parties can claim to be the repository of the history of the old ISOTTA FRASCHINI mark". On this basis, the court considered that the new trademarks could be validly registered and used in their respective fields (cars on the one hand, and clothing items and luxury goods on the other) by their owners, which were unrelated to the previous owner.

As neither of the new owners could claim continuity with the old and revoked trademark, but could only introduce their activities as new economic initiatives in their respective sectors, inspired by the values of the original trademark, they could not take advantage of the old trademark's reputation to expand the scope of protection of their mark.

For further information on this topic please contact Cesare Galli at IP Law Galli by telephone (+39 02 5412 3094), fax (+39 02 5412 4344) or email ([email protected]). The IP Law Galli website can be accessed at www.iplawgalli.it.

Endnotes

(1) See Galli, "Il diritto transitorio dei marchi", Milano, Giufffré, 1994, pages 29 et seq.

(2) See the European Court of Justice decision in Ansul BV v Ajax Brandbeveiliging BV (Case C-40/01).

(3) Isotta Fraschini Milano Srl v CO.RI.MEC SpA, Court of Milan, Specialised IP Section, March 15 2006.