The Gucci case: the strenghtened protection of trademarks with a reputation.

The Italian Supreme Court of Cassation has recently issued an interesting decision on well-known trademarks. The case was between the renowned Florentine fashion house Gucci and the owner of an independent company that produces leather goods. The subject-matter of the dispute was two trademarks registered by the latter, which, according to the Italian fashion house, infringed their own trademarks depicting the iconic “double G”.

The Court of Florence had rejected Gucci’s application for a declaration of invalidity, for lack of novelty, of the defendant’s trademarks, on the grounds that there was no likelihood of confusion; the Court of Appeal had upheld the first instance decision, observing that, although the signs were similar, the reputation of the Florentine House’s trademarks, whose products would be aimed at informed consumers, made the likelihood of confusion extremely unlikely.

Despite two negative consecutive rulings, the fashion house decided to assert its reasons before the Supreme Court of Cassation.

The Supreme Court, in upholding Gucci’s appeal, held that the second instance decision incorrectly applied the rules that Italian law provides for well-known trademarks.

Such rules, in fact, afford trademarks with a reputation a strengthened protection which does not require likelihood of confusion – which was the deciding factor in the appealed ruling – but only the existence of a similarity between the signs, sufficient to establish a connection between them in the mind of the consumer (therefore, something less than the similarity that gives rise to a likelihood of confusion), together with the requirement that the use of the latter sign without due cause takes unfair advantage of the distinctive character of the earlier sign or can be detrimental to it.

The Supreme Court has noted, in this regard, that damage can be caused to the owner of the renowned mark by the use of the conflicting one, in two different ways: dilution by blurring, “which occurs when the ability of the mark to identify the goods or services for which it was registered is weakened”; and dilution by tarnishing, “which occurs when the goods or services for which the similar sign is used by the third party can be perceived by the public in such a way that the power of attraction of the mark is impaired“.

As for unfair advantage or parasitism, it occurs in particular when “thanks to a transfer of the brand image or of the characteristics projected by it on the products designated by the identical or similar sign, there is a clear parasitic exploitation in the wake of the mark that enjoys the reputation … (omissis) … without the owner of the conflicting mark having had to make its own efforts in this regard and without any economic remuneration to compensate for the commercial effort made by the owner of the mark to create it and maintain its image.”

In order to make a correct assessment of the requirement of unfair advantage, the Court of Cassation has specified that the elements to be taken into account are, in particular, the strength of the reputation, the degree of similarity between the conflicting marks and the nature and proximity of the goods or services concerned. From this point of view, the Supreme Court stressed that “the stronger the distinctive character and the reputation of the mark in question are , the more easily it will be admitted that there has been an infringement”.

The Court of Cassation therefore overturned and referred back the decision of the Court of Appeal of Florence, which will now have to make a new decision, taking into account the indications given by the Supreme Court with the order commented upon here.

The Italian Supreme Court of Cassation has recently issued an interesting decision on well-known trademarks. The case was between the renowned Florentine fashion house Gucci and the owner of an independent company that produces leather goods. The subject-matter of the dispute was two trademarks registered by the latter, which, according to the Italian fashion house, infringed their own trademarks depicting the iconic “double G”.

The Court of Florence had rejected Gucci’s application for a declaration of invalidity, for lack of novelty, of the defendant’s trademarks, on the grounds that there was no likelihood of confusion; the Court of Appeal had upheld the first instance decision, observing that, although the signs were similar, the reputation of the Florentine House’s trademarks, whose products would be aimed at informed consumers, made the likelihood of confusion extremely unlikely.

Despite two negative consecutive rulings, the fashion house decided to assert its reasons before the Supreme Court of Cassation.

The Supreme Court, in upholding Gucci’s appeal, held that the second instance decision incorrectly applied the rules that Italian law provides for well-known trademarks.

Such rules, in fact, afford trademarks with a reputation a strengthened protection which does not require likelihood of confusion – which was the deciding factor in the appealed ruling – but only the existence of a similarity between the signs, sufficient to establish a connection between them in the mind of the consumer (therefore, something less than the similarity that gives rise to a likelihood of confusion), together with the requirement that the use of the latter sign without due cause takes unfair advantage of the distinctive character of the earlier sign or can be detrimental to it.

The Supreme Court has noted, in this regard, that damage can be caused to the owner of the renowned mark by the use of the conflicting one, in two different ways: dilution by blurring, “which occurs when the ability of the mark to identify the goods or services for which it was registered is weakened”; and dilution by tarnishing, “which occurs when the goods or services for which the similar sign is used by the third party can be perceived by the public in such a way that the power of attraction of the mark is impaired“.

As for unfair advantage or parasitism, it occurs in particular when “thanks to a transfer of the brand image or of the characteristics projected by it on the products designated by the identical or similar sign, there is a clear parasitic exploitation in the wake of the mark that enjoys the reputation … (omissis) … without the owner of the conflicting mark having had to make its own efforts in this regard and without any economic remuneration to compensate for the commercial effort made by the owner of the mark to create it and maintain its image.”

In order to make a correct assessment of the requirement of unfair advantage, the Court of Cassation has specified that the elements to be taken into account are, in particular, the strength of the reputation, the degree of similarity between the conflicting marks and the nature and proximity of the goods or services concerned. From this point of view, the Supreme Court stressed that “the stronger the distinctive character and the reputation of the mark in question are , the more easily it will be admitted that there has been an infringement”.

The Court of Cassation therefore overturned and referred back the decision of the Court of Appeal of Florence, which will now have to make a new decision, taking into account the indications given by the Supreme Court with the order commented upon here.