The Court of Cassation on the infringement of the Rolex designs

In Judgment No. 24006/2023, the Court of Cassation dismissed the appeal of Swift Company S.r.l. against Rolex S.A. and Rolex Italia S.p.A., which had accused it of producing and marketing bracelets purportedly inspired by Rolex watch bezels and bearing the MGT sign, allegedly confusable with Rolex's GMT Master trademark.

International design no. DM/068 823, and International design no. DM/064 683

Rolex Submariner and Swift Company bracelets     

In the first instance, the Court of Turin had dismissed Rolex's claims, denying that Swift had infringed the registered designs of its bezels and its copyrights and engaged in the unfair competition alleged by Rolex. Instead, it had upheld a counterclaim for a finding of unfair competition brought by the defendant, due to Rolex having warned some of its distributors of the presence of Swift’s products on the market and urging them not to market them and, additionally, for having secured the removal of the alleged infringing products from the defendant's stands at the “Baselworld” exhibition.

Rolex had then submitted an appeal against the Court’s decision, which was partially upheld by the Turin Court of Appeal. The latter had in fact found that unfair competition acts were indeed put in place by Swift, as the Swift bracelets were slavish imitations of Rolex bezels, capable of confusing the average consumer who associated them with Rolex and was not able to perceive the differences between them. It had therefore enjoined Swift from producing, distributing, marketing and advertising the bracelets in question and ordered their withdrawal from the market and destruction.

However, the Court had denied infringement of Rolex's registered designs, finding that the differentiating elements of the bracelets from Rolex’s bezels, whilst not perceptible to the average consumer, as referenced above, would be perceived by the informed user, on whose basis design infringement should be assessed. The following had also been deemed to be non-existent: i) the prerequisites for copyright protection, due to the impossibility of attributing to Rolex’s bezels the necessary characteristics of creativity and artistic value; ii) infringement of the GMT Master trademark, due to the lack of any likelihood for confusion with the MGT trademark.

Swift subsequently appealed against this Court judgment on four grounds.

Firstly, the appellant argued that the judgment under appeal relied on an erroneous interpretation of Article 2598 no. 1 of the Civil Code: according to Swift, in the absence of other elements amounting to unfair competition, the confirmed non-existence of the infringement of the designs should have led to the automatic exclusion of unfair competition by slavish imitation as well.

The Supreme Court found the plea to be unfounded, pointing out that the scope of Art. 33 Legislative Decree 30/2005 on designs is different from that of Art. 2598 No. 1 Civil Code on slavish imitation. In fact:

i) the first provision protects designs with individual character, i.e. capable of creating a general impression different from that of earlier designs in the eyes of an informed user. This is an intermediate person between the average consumer and the person skilled in the field, experienced and endowed with in-depth technical knowledge, and is identifiable, therefore, as a person having a good(not necessarily professional) knowledge in the relevant field, who is diligent and careful in verifying the similarity of a given good to the one protected by the design right;

ii) the second rule protects against the reproduction of the external characteristics of the product which, by their novelty and originality, set it apart from similar ones and denote its origin from a particular company in the eyes of the average consumer (i.e., an averagely intelligent, shrewd and informed user of the product). From this perspective, the protection ensured by Article 2598 No. 1 of the Civil Code is signified by the more specific nature of its subject matter, consisting only of those elements that, insofar as they are characteristic of the products of a given entrepreneur, indicate their provenance, and by the fact that the assessment of these elements is anchored on a degree of discernment lower than that of the informed user required by Art. 33 of Legislative Decree 30/2005: the violation can be established even in the presence of elements of diversification, if they are not sufficient to be perceived by the average consumer (while they would be by the informed user).

The Court therefore confirmed the possibility of cumulation of the two protections, pointing out, moreover, that even in the presence of registration, the owner of the model may have an interest in asserting cumulatively the two protections or even only that provided by Article 2598 no. 1 of the Civil Code, in order to prevent the infringer from opposing the invalidity of the design or even only to achieve more favourable results from the compensation point of view, due to the greater breadth of the audience of consumers potentially misled by the imitation.

It can also be ruled out that the admissibility of such cumulation would deprive the protection ensured by Article 33 Legislative Decree No. 30/2005 of its content, in favour of that provided by Article 2598 No. 1 of the Civil Code. In fact, the almost unlimited duration of the latter corresponds to a much narrower scope, which may lead to the refusal of the protection if the external characteristics of the product do not allow the average consumer to understand the origin of the product (whereas they would be sufficient to obtain a registered design).

The additional grounds of appeal were assessed together as all of them of regarded  prerequisites for a finding of unfair competition. With them, Swift had complained that the Court of Appeal had erred in the following assessments:

i) after ruling out infringement of the plaintiffs' bezel designs due to the existence of highly similar bezels in the sports watch market, it was inconsistent in recognising individualising efficacy of the same bezels to establish unfair competition under Article 2598 No. 1 of the Civil Code;

ii) it had failed to consider that the Swift bracelets only reproduced common elements of the bezels, lacking distictiveness, and that their intended audience was different from that of Rolex watches, so there was no competitive relationship between the two companies;

iii) it had asserted the similarity of the products marketed by the plaintiff with the Rolex watches, whilst the Swift products in dispute were bracelets and garments. Furthermore, in assessing the likelihood of confusion between the products, it had failed to consider the characteristics of the consumer in the sector, who is characterised by a higher level of attention than the average user.

The Supreme Court found the appellant's arguments to be unfounded, reiterating first of all the absence of contradiction between the denial of infringement of Rolex's registered designs and the recognition of slavish imitation of the products based on them, for the reasons explained above.

Second, the Supreme Court recalled that the appreciation of the individualising elements of the Rolex bezels and their likelihood of confusion with the plaintiff's bracelets constitutes a factual judgment reserved to the Court of Appeal. In the specific case, the judgment of the Court of Appeal was not illogical from any point of view, having applied criteria shared in the field of industrial models and designs, such as the following in particular:

i) as to the individualising elements, in a market characterised by the presence of a large number of products of the same kind, even slight differences may be individualizing;

ii) as to likelihood of confusion, the perceptual capacity to be taken as a parameter is that of consumers interested in the specific product under dispute and its sector;

iii) the comparison between products does not require an analytical and separate examination of the individual characterising elements, but a synthetic assessment of them as a whole, carried out from the consumer's point of view, also taking into account that the lesser the product's commodity importance, the greater the impact on the consumer's choice of immediate sensory perception over data requiring reflexive attention, and vice versa.

Finally, regarding the existence of a competitive relationship between the parties, the Supreme Court acknowledged that the appellate judgment correctly pointed out the similarity existing between the Rolex watches and the Swift bracelets, in particular as they both target  consumers that love sports watches with bezels and as they  the present the bracelets as complementary to the latter.

For all these reasons, the Court dismissed Swift Company's appeal.