Slavish imitation of competitors’ packaging: a decision from the Milan Tribunal

Judgment no. 8817/2015 of 17 July 2015 of the Business Matters Section of the Milan Tribunal is one of a long list of rulings by this Court on the imitation of the packaging of competitors’ products (such as those we discussed here and here).

The manufacturer of a renowned consumer glue filed a lawsuit against a former distributor, claiming they had imported and marketed (in Italy) a competing glue of lower quality and price, whose tube and outer packaging imitated those of its trademark product. The plaintiff argued that this constituted acts of unfair competition in the form of slavish imitation, appropriation of merits and free-riding, as well as passing-off the unregistered shape trademark allegedly made from the outer packaging of its product. On such grounds, the plaintiff, which had already been granted provisional seizure, injunction and recall from commerce in preliminary proceedings, sought the confirmation of said precautionary measures, damages and the publication of the ruling.

The defendant replied by pointing out the different size formats in which the competing products were sold, the difference in colour of the cap on the respective tubes, the presence of its own trademark both on the tube and on the outer packaging of its glue, and the difference in quality and price.

In judging the case, the Court preliminarily denied the claim that the plaintiff’s product packaging could be enforced as a de facto trademark, noting that the plaintiff had failed to provide the required evidence of the building up of the unregistered trademark’s reputation on the market.

On the other hand, the judges found that the plaintiff’s unfair competition claims were substantiated.

They agreed that the external packaging of the defendant’s products slavishly imitated the plaintiff’s, except for the name of the product – albeit printed in the same colour and font – and the presence of the defendant’s company trademark on the sides of some of the packaging. The judges found a similar overall resemblance between the tubes containing the two glues. The Court held that these similarities were significant especially in light of the fact that likelihood of confusion must be assessed on the basis of a hypothetical distant, rather than side-by-side, comparison. In such a context, according to the Court, the presence of a different product name or company brand, or differences in price or in size formats, are not decisive, since consumers will still confuse the products or assume they belong to two different lines coming from the same company. The fact that the products were sold in the same stores and that they were of different quality only added, in the Court’s view, to the harmfulness of the defendant’s conduct.

The Court furthermore found that the defendant’s conduct constituted misappropriation of the plaintiff’s product merits under article 2598, no. 2, of the Italian Civil Code.

The judges denied the occurrence of parasitic free-riding, since the imitative acts had been limited to only one product, and thus did not amount to a proper parasitism of the plaintiff’s business strategy.

Having thus partially upheld the plaintiff’s claims, the Court awarded economic damages – based on the profits earned by the infringer, as calculated by a Court appointed expert – and moral damages, which were equitably determined to amount to half of the former. The plaintiff was also granted a permanent injunction and the publication of the judgment in a national daily newspaper at the defendant’s expense.