Trademark infringement and unfair competition: Chanel wins before the Florence IP Court

In a ruling published on 26 January 2016, The Florence IP Court upheld a trademark infringement and unfair competition lawsuit waged by the historical fashion house Chanel against a locally well-known perfumery, which happened to be an official retailer of the former. The trademarks in suit were two international figurative trademarks representing the renowned Chanel logo made of two interlocked and opposing Cs.

The plaintiff had become aware – in the context of parallel criminal proceedings – that the Tuscan perfumery was selling unoriginal, low-quality hair accessories bearing its famous logo and had consequently filed a civil lawsuit, requesting injunction and damages for alleged trademark infringement and unfair competition (in the form of consumer’s confusion and parasitic competition).

The defendant claimed it was impossible for the allegedly infringing products to create any confusion on the market, in light of differences in the decoration (circular/semi-circular) and sale price, and of the absence on the products themselves of any labels or tags relating to the plaintiff’s brand; it actually filed a counter-claim against Chanel for unlawful termination of the distribution agreement under which it had earlier sold the original Chanel products as an official retailer, seeking damages.

The defendant also joined to the proceedings the supplier of the products in suit, requesting to be indemnified by the latter in case of adverse judgment. Following the third-party joinder, the supplier appeared before the Court denying to have ever sold any products infringing Chanel trademarks and claiming lack of locus standi. Chanel extended its damage claims to the additional defendant.

Chanel International trademark no. 517325The sign seen on the allegedly infringing products

The Court of Florence found the claims of unfair competition and trademark infringement to be grounded, considering the signs to be almost identical, giving rise to the likelihood of both pre- and post- sale confusion.

With regard to pre-sale confusion, the Court found that, upon a global appreciation of the signs and their overall impression, both the casual and loyal consumer could be confused, especially with a view to the context in which the infringing products were sold, i.e. a regular retailer which was also known as an official Chanel retailer.

With respect to post-sale confusion, the Judges stated that the infringing products, once bought and worn by the purchaser, would appear to be original in the eyes of most onlookers, thus transferring the perceivable lower qualities of the infringing products onto the plaintiff’s original line.

In light of the above, the Judges granted Chanel’s claims and accordingly rejected the main defendant’s counterclaim.

As for the third-party defendant, its lack of locus standi defence was dismissed – in light of invoices and catalogues proving that it had, in fact, sold and advertised the infringing products – while the Court denied the main defendant’s indemnity claim against the former, considering that the latter could not expect to be indemnified for an intentional and wilful conduct such as the sale of the products in suit.

Both the defendants were ordered to pay damages according to the infringer’s profits criterion, while actual losses were not compensated as according to the Court, the plaintiff had failed to prove them.