On 25 May, the Italian Supreme Court issued decision no. 10826/16 in a dispute about which much has been said in recent years, both because of the reputation of the parties involved, and the extensive litigation to which it gave rise: the dispute between the fashion designer Elio Fiorucci and the companies that bought the “Fiorucci” brands in 1990 (Edwin Co. Ltd. and Edwin International Gmbh), with which the designer collaborated until 2002. We talked about this also here on this blog.
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This specific case dealt with the use, by the designer and by companies linked to him, of the trademark “Love Therapy by Elio Fiorucci”: this was used on clothing and accessories sold in the Milanese designer’s shop and – on the basis of a co-branding agreement – on sweetener products marketed by a third company. In front of the complaints by Edwin, which claimed infringement of its “Fiorucci” trademarks and unfair competition, the Milan Court had found for the trademark infringement only, while the Milan Court of Appeal had ruled out the subsistence also of the latter. Hence Edwin’s appeal before the Supreme Court.
In the decision under review, the Court first of all stated that the heart of the trademark being challenged is the “Fiorucci” surname, and pointed out that surnames are normally strong trademarks. It then recalled its own earlier decision stating that“the commercial use of the surname must conform to the principles of professional fairness and, therefore, it cannot have a trademark function, that is a distinctive function, but it can only have a descriptive function: this is the limit of the provision preventing the trademark proprietor from prohibiting a third party from using his/her name in the course of business. It follows that there is infringement when the challenged trademark includes the protected surname, even if accompanied by other elements“. The preceding, said the judges, derives from Article 21 IP Code, according to which the trademark proprietor cannot prohibit a third party from using his/her name in the course of business “provided that the use is in accordance with the principles of professional fairness“.
In other words, the decision continued, “once a sign consisting of a name was validly registered as a trademark, even the person who legitimately has that name cannot use it as a trademark for the same or similar categories of goods“. In the present case, however, that had been done: the third party’s strong trademark had been unlawfully included in the designer’s trademark and in the name of his Milanese shop.
According to the Court, in fact, the use of the surname “Fiorucci” within the sign in dispute did not appear as legitimate descriptive use under art. 21 IP Code: that use was substantial and not limited to the creative work of the designer, but also relative to “the co-ordination of other people’s work, the marketing of products of other companies and in various fields, and merchandising, co-branding and co-marketing activities. These do not conform to the restricted area in which the use of the surname, first registered as a trademark by its creator who then sold it at a reasonable price, is still allowed to be used by its creator with descriptive reference to his professional activities, without producing the effect of hooking and confusion of which the claimants rightly complain“.
Hence the statement of the following principle of law: “the inclusion in the trademark of a surname that coincides with the name of the person who had previously included it in a trademark that became famous, and then sold it to a third party, is not in accordance with honest practices if it is not justified, to a strictly limited extent, by the existence of a real descriptive need inherent in the activities, products or services offered by that person. The latter certainly has the right to carry on its own business and intellectual or creative activities, but not to transform the same business into a parallel activity to that for which the earlier mark is not only registered but has also played a significant distinctive function“.
In light of the foregoing, the Supreme Court granted Edwin’s claims, annulled the Milan Court of Appeal decision and referred the case back to the Court of Appeal for it to issue a new decision in accordance with the principles expressed above.