Italian Supreme Court grants copyright protection to store layouts

With sentence no. 8433/2020, the Italian Supreme Court granted copyright protection to the layouts of the stores of the well-known cosmetic chain Kiko, confirming the conclusions previously reached by the Milan IP Court and by the Milan Court of Appeal and taking the opportunity to summarise the relevant case-law. We already spoke about the Milan first instance decision here on this blog. We also commented on the same topic here on this blog with reference to an order from the Venice IP Court relating to the protection of a yacht’s layout.

In the case in question, Kiko sued a competitor complaining that it had copied the layout of its stores, thus violating its copyright on the relevant project pursuant to Art. 2 no. 5 of the Italian Copyright Law (ICL) which protects “drawings and works of architecture“. Furthermore, according to the plaintiff, the defendant had also committed acts of unfair competition to its detriment, having copied various elements of its  promotional and commercial initiatives.

The Court of Milan found that the defendant’s conduct both infringed Kiko’s copyrights pursuant to Art. 2 no. 5 ICL and amounted to unfair parasitic competition sanctioned by Art. 2598 no. 3 of the Italian Civil Code and condemned the defendant to pay damages of € 700,000. The ruling was then confirmed by the Milan Court of Appeal, and later appealed before the Court of Cassation by the defendant.

With the ruling in question, the Supreme Court confirmed that “an interior design project, in which there is a unitary design of individual components organised and coordinated to make the environment functional and harmonious, in a scheme that is visually appreciable in itself and reveals a clear “stylistic key” or the personal imprint of the author, can be protected as a work of architecture, pursuant to Art. 5 no. 2 ICL“. This obviously applies “regardless of whether the single furnishing elements that compose the layout are simple or common and already used in the field“: what matters is that the layout is an “original combination, not imposed by a technical-functional problem that the author wants to solve“. In this regard, the Court also recalled that the degree of creativity required of a work so that it can enjoy copyright protection is minimal “and cannot therefore be ruled out only because the work is composed of ideas and notions which are ‘simple’ and already belong to the intellectual patrimony of people ‘having experience in the matter’. This is all the more true since the object of copyright protection is not the idea or the intrinsic content of the work, but the formal and original representation in which it is realised“.

However, the Court specified, in order to be protected, “the interior design project or work must always be identifiable and recognisable as a unitary work of the author, due to the precise choices of composition of all the elements (e.g. the colour of the walls, the particular lighting effects, the constant repetition of decorative elements, the use of certain materials, the dimensions and the proportions). In fact, exclusivity is granted to the composition, the unitary work of organising the space, the joint use of the furniture elements according to the same organisational design“.

Thus having confirmed that the layout in question enjoys copyright protection, the Supreme Court also confirmed its infringement by the appellant. On this point, in reply to the appellant’s complaints, the Court recalled, “infringement exists not only when the work is copied in its entirety, but also when there is counterfeiting of the previous work involving differences as well as similarities“. Consequently, the Court continued, “the existence of differences in details is not conclusive to deny infringement, as what matters only is that the essential features that characterise the previous work are recognisable in the later work“.

On the other hand, the Supreme Court granted the appeal for the part relating to unfair competition: in agreement with the appellant, the Court noted that the Milan judges had identified the existence of unfair parasitic competition without checking whether the allegedly copied initiatives where sufficiently original, as the appellant had contested. In this regard, the Supreme Court stated: “a punctual evaluation must be carried out in relation to the precise exceptions raised by the appellant. The use of generic statements, based on a mere similarity between the commercial initiatives as a whole, is not enough and amounts to a lack of decision or motivation regarding the existence of the elements that integrate the parasitic competition“.

The Supreme Court also granted the appeal in relation to the sentencing to compensation for damages, which the Milan judges had liquidated on an equitable basis in € 700,000 multiplying by ten the price paid by Kiko to the design studio that had designed the layouts. The multiplier (10) used by the Milan judges, in fact, had not been justified and was therefore found to be arbitrary, in contrast with the principles governing equitable liquidation of damages: “the judge must indicate, at least briefly and within his/her wide discretionary power, the criteria he/she followed to determine the extent of the damages and the elements on which he/she based his/her decision on the amount. In fact, his/her assessment cannot be questioned by the Supreme Court provided that the criteria he/she followed are stated in the reasons for the decision and are not manifestly inconsistent with respect to the concrete case, or radically contradictory, or macroscopically contrary to the data of common experience, or the outcome of their application is particularly disproportionate for excess or defect“.

In light of the partial granting of the appeal, the case was referred back to the same Milan Court of Appeal, which shall now decide the case by means of judges other than the ones that issued the previous decision.