Two recent CJEU decisions and the fuzzy border between trademarks and designs

While no definite trend toward the approximation of trademark and design law has so far emerged in European case law, two recent decisions of the CJEU relating to designs show how fuzzy the border between trademark and design rights may be.

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In Doceram (C-395/16, ECLI:EU:C:2018:172), the CJEU had to interpret the concept of designs subsisting “in features of appearance of a product which are solely dictated by its technical function”, which are excluded from protection under Article 8(1) of Regulation 6/2002 on Community designs (RCD). The Court was asked, in particular, to state whether such exclusion applies even when alternative designs exist which can perform the same technical function, so that the features of the design cannot be considered indispensable for performing said  function.

It is a classic dilemma. As AG Henrik Saugmandsgaard Øe noted in his opinion, in Europe the Courts and legal scholars have given both negative and positive answers.

The position whereby Article 8(1) RCD and the corresponding national provisions only apply when copying the design is the sole way to achieve the technical result is commonly referred to as the “mandatory” (or “multiplicity of forms”) theory. The opinion whereby, to the opposite, it does not matter whether or not alternative designs can fulfil the same function, insofar as the function in question is the sole driver of the shape, is usually referred to as the “causative theory”. In the past the EUIPO has ruled in line with the first theory [also supported by AG Colomer in the opinion submitted in Philips v. Remington (paragraph 34); and followed by the EU General Court in Industrias Francisco Ivars (see paragraph 22)], which is much more favorable to design right holders. Recently it seems to have veered towards the latter. As far as Italy is concerned, there is probably greater support for the “mandatory theory”.

In Doceram the Court (and before the Court AG Saugmandsgaard Øe) endorsed, with little hesitation, the “causative” theory:

if the existence of alternative designs fulfilling the same function as that of the product concerned was sufficient in itself to exclude the application of Article 8(1) of Regulation No 6/2002”, it said,

then

“a single economic operator would be able to obtain several registrations as a Community design of different possible forms of a product incorporating features of appearance of that product which are exclusively dictated by its technical function” (paragraph 30).

 That, added the Court,

“would enable such an operator to benefit, with regard to such a product, from exclusive protection which is, in practice, equivalent to that offered by a patent, but without being subject to the conditions applicable for obtaining the latter, which would prevent competitors offering a product incorporating certain functional features or limit the possible technical solutions, thereby depriving Article 8(1) of its full effectiveness” (ibidem).

By stating this, the CJEU de facto extended to designs the principles it affirmed with regard to trademarks “consisting exclusively of the shape of goods which is necessary to obtain a technical result”.

As is well known, in Philips v. Remington the CJEU stated that the relevant impediment to registration [now contained in Article 4(1)(e)(ii) of Directive 2015/2436] “cannot be overcome by establishing that there are other shapes which allow the same technical result to be obtained: which is, mutatis mutandis, what the CJEU said in Doceram.

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Interestingly, another recent CJEU decision ended up extending the interpretation of provisions concerning trademarks to provisions concerning designs.

In Nintendo v. Bigben (C‑24/16 and C‑25/16, ECLI:EU:C:2017:724), the Court had (inter alia) to issue a preliminary ruling with regard to Article 20(c) RCD, which prevents design right holders from exercising their rights in respect of “acts of reproduction for the purpose of making citations or of teaching, provided that such acts are compatible with fair trade practice and do not unduly prejudice the normal exploitation of the design, and that mention is made of the source”.

The dispute in the main proceedings concerned the use of images of goods corresponding to EU registered designs in the advertisement of goods intended to be used as accessories to the above goods corresponding to EU registered designs. As in the following picture, which shows Nintendo Wii remote controllers, registered as EU designs, together with the charger for such controllers produced and sold by the defendant Bigben.

bigben

In addressing the issue, the Court said that Article 20(c) RCD, insofar as it refers to “acts … compatible  to fair trade practice”, can be interpreted in the light of the case law regarding uses of trademarks made in accordance with “honest practices in industrial or commercial matters” under Article 6(1) of Directive 89/104 [now Article 14(2) of Directive 2015/2436]. And it explicitly applied to designs – again: mutatis mutandis – the principles asserted in Gillette (17 March 2005, C-228/03, ECLI:EU:C:2005:177) with respect to the limitation of trademark rights:

an act of reproduction of a protected design for the purpose of making citations or of teaching is not compatible with fair trade practice … where it is done in such a manner that it gives the impression that there is a commercial connection between the third party and the holder of the rights conferred by those designs, or where the third party, who wishes to rely on that limitation in the course of selling goods that are used jointly with goods corresponding to the protected designs, infringes the rights conferred on the holder of the design protected by Article 19 of Regulation No 6/2002, or where that third party takes unfair advantage of the holder’s commercial repute” (paragraph 80).

Riccardo Perotti

May #hashtags safely rely on trademark protection?

In recent years, trademark offices worldwide have been assisting to a new trend: brand owners are increasingly trying to protect hashtags as trademarks. However, some substantive differences existing between these two figures suggest that trademark protection is most of the time improper – and even unnecessary. This, for a number of reasons.

  1. A hashtag can be defined as the symbol # followed by a word, a phrase or a symbol. Hashtags are used on social media in connection to a certain content to synthetically describe or comment it. They were firstly introduced on Twitter, then the main other social networks followed. It must be emphasized, even for legal purposes, that they are freely usable by anyone.

twitter

Technically, the social network indexes and groups all the contents using the same hashtag. Hashtags function as hyperlinks: by clicking on a single hashtag, the user is redirected to a page where all the contents using the same hashtag have been grouped and organized together by the social network.

From a consumers’ view, hashtags are helpful in following topics and finding contents. From a brand’s view, they are useful to control and attract online consumer traffic and enhance the brand appeal. In particular, hashtags are used in advertising campaigns to redirect users to the company website and social networks, where the consumer experience can be enhanced and the brand loyalty reinforced. From a social network’s view, they are a new way of organizing information and topics.

  1. Let’s come to trademarks. As known, besides their essential legal function of indicating the origin of the product or service covered by the trademark, they can perform, if famous (“with reputation”) other factual functions, such as that of ‘guaranteeing’ the quality of a product or service, or that of supporting advertising of, and investment on, the ‘brand’. However, it must be noted that quite often hashtags are not perceived as trademarks, as they do not perform any of the above functions.

Focusing on the distinctive function, if a sign does not have distinctive character the trademark owner shall retain its exclusive right only by proving that the sign has acquired – typically by strong advertising – a ‘secondary meaning’ – i.e.- the capacity to identify, in the eyes of consumers, the product or service as originating from a firm.

Now, as concerns hashtags, it seems all too evident that, except when the word component is wholly or in part of coincident with a trademark already known on the market (e.g. #cokecanpicks or #CokeZeroSugar, as in the below example), it is indeed hard to say that a hashtag is inherently distinctive: in such cases, it would be normally necessary to prove secondary meaning to secure a valid registration.

coke

In this respect, hashtags shall be considered as a mix of domain names and slogans. As for the top level domain names such as “.com” or “.it”, the symbol “#” is considered as not capable of conferring to the sing any distinctive value. Therefore, if the word or the phrase composing a hashtag are not per se distinctive, the presence of the symbol # cannot save the trademark from being prevented registration for lacking of distinctive character. On the other hand, hashtags are often composed by small phrases and shall, therefore, be compared to slogans. As for slogans, the proof of the existence of a distinctive character is more difficult than for ordinary trademarks, as slogans are usually not perceived as source indicators. Against this background, it seems more efficient to try to secure registration to a phrase or word, and not to the same in the form of a hashtag.

Further, their functional character may prevent hashtags registration as trademarks. The functionality doctrine, based on the ‘imperative of availability’ (“the need to keep free”, “Freihaltebeduerfnis”) prevents to use trademark law for inhibiting legitimate competition by allowing a single company to claim a monopoly either on a descriptive term or a useful product feature. And a product feature is considered functional if it is essential to the use or purpose of a good. Now, as hinted, hashtags function as hyperlinks and tags, to group contents. This function is essential for their success.

In the light of the considerations just submitted registering a hashtag as trademark could be quite difficult. That said, provided that a company succeeds in obtaining trademark registration, its enforcement towards third parties could be difficult for a number of reasons:

a) in most cases, hashtags are not perceived as trademarks. As said, they are typically a form of metadata or tag, through which a word or a phrase becomes a searchable expression on a social network. On the one hand, therefore, it is inevitably that the hashtag registered as trademark is used by all social network users willing to do so. Such users would likely not perceive the hashtag as a trademark, a source indicator, but more likely as a descriptive text or as a tool having a specific function.

Obviously, though, trademark owners have an interest to control the use of their hashtag, if registered as trademark, in order to protect it from dilution and/or consumer confusion with a similar trademark. Here lies one of the most strident paradoxes of hashtag registration as trademarks: as trademark registrants, hashtag owners are encouraged to enjoin unauthorized third parties from using their registered sign. At the same time, it is their interest to encourage social network users to make use of the hashtag for commercial benefits — expand brand awareness, ‘lock in’ consumers, and so on. More precisely, brand owners use hashtags in social media contexts for marketing purposes, often in a way that results detrimental to their distinctive character (and, as a consequence, to their possible enforcement). They convert the hashtag into a means through which the public is encouraged to comment, share and ‘talk’ about the brand and its products or service, while gathering information and data about consumers tastes, preferences and so on. Thus, again, notwithstanding a possible registration, even registered hashtags are hardly used as indicators of origin, but merely as collectors of data and comments (of course not possibly subject to any monopoly).

b) Even when hashtags are used and perceived as trademarks, descriptive use, functionality, legitimate use play in most cases play a crucial role in excluding the existence of a trademark infringement.

Here, the constitutionally ranking principle of freedom of expression would play a role in determining where there is a legitimate use of a hashtag. If people are encouraged to use a hashtag to get involved in a topic and participate to a discussion, their use of the hashtag, as such, shall be considered indeed legitimate under the principle of freedom of expression.

c) Therefore, the sole relevant case when the use of hashtags could be protected under trademark law seems that of competitors adopting hashtags confusingly similar to a hashtag that includes (or corresponds to) a registered trademark. This position seems reflected by the main social networks policies, preventing the use of third parties trademarks when such use creates confusions for consumers.

But even in such a case, there is room to affirm that the use of an identical or similar hashtag by a competitor is legitimate. Considering that the hashtag is a means to tag and categorize contents, the well-known case law on keyword advertising could well apply to a third party use of a registered hashtag. In this context, if the use a third party hashtag by a competitor enhances competition and offers consumes an alternative or a wider range of offer, this use could be considered fair according to the keyword advertising case law.

One last remark. Trademark law is just one of several laws that are relevant to the use of hashtags. Among others, privacy law, consumer law, licensing, image rights and advertising are strictly connected to hashtags use and shall be carefully considered by all users adopting hashtags.

Maria Luigia Franceschelli

Shape trademarks: the Court of Florence’s innovative interpretation of “substantial value”

The Court of Florence recently expressed an interesting view on the interpretation of absolute grounds of registration invalidity provided for signs constituted by the shape of a product, and, in particular, substantial value.

The case concerned the shape of the world wide famous Hermes’ “KELLY” and “BIRKIN” bags, the shape of which was registered as 3D trademark in Italy and before the EUIPO.

Capture

Hermes alleged the infringement of its famous trademarks by an Italian company offering for sale bags highly similar to the ones protected with Hermes shape trademarks. The alleged infringer resisted claiming, as usual in these cases,  that the above trademarks were invalid since, besides other things, they consist of a shape giving substantial value to the bag.

The Court of Florence dismissed such claim, excluding the existence of a substantial value with an unusual (and deeply interesting) interpretation of this prevention.

Firstly, the decision (available heredefines substantial value as a real and concrete aesthetic plus-value – relevant per se to the product, being instead irrelevant the existence of any particular decoration or added part – that cannot be separated from the product itself and is capable of prevailing on the product’s shape features that are necessary to its function.

Then, the Court expressly excluded that the mere ornamental attitude of the product’s appearance could be of relevance in the evaluation on the existence of a substantial value. Differently from the main case law on this ground of refusal (see decision of 15 February 2012 of the Court of Venice on Crocs shoes or decision of 16 June 2015 of the Court of Milan on Flou’s Nathalie bed), the decision essentially denies that substantial value consists in the capability of the shape to influence the consumer’s choice of purchase, so to be itself the main reason why the product is in fact chosen and bought. In the Court’s view, this capability of the object’s shape to catch the consumers’ attention is connected only with trademark reputation.

Only when the aesthetic appearance of the product’s ornamental shape is so relevant to give a particular aesthetic value inseparable from the product itself trademark registration is prevented. Having this interpretation of substantial value in mind, the Court affirmed that “KELLY” and “BIRKIN” bags where valid trademarks as their shape trademark may be separated from the product itself and does not merely consist in the standard appearance of bags.

This decision interestingly tries to plot a demarcation line between substantial value and trademark reputation/distinctiveness that are often overlapped in the context of the discussions on substantial value. The distinction proposed by the Court of Florence could indeed be of help in drafting a clear and new definition of substantial value, whose interpretation is still not crystal clear when applied to real cases. As a matter of fact, and as actually noticed by the Vespa case (see here), the current interpretation of this condition often leads the trademark owner to deny the attractiveness and distinctiveness of the shape of a product when substantial value is under discussion on the basis that an actual recognition of the shape of the product on the market may lead to the assertion of the existence of a substantial value.

The interpretation of the Court of Florence would not fall into this trap and appears to be more logical in the overall context of the trademark protection, as it denies any relevance of the trademark distinctive character in the context of absolute grounds of registration invalidity provided for signs constituted by the shape of the product. This interpretation, although interesting, is however new and currently isolated. While certainly providing food for thought, it downplays the meaning, and legal sense , of the requisite of substantial value as a reason to attract consumers. If only reputation is attractive, what is the meaning, and sense, to verify the occurrence of a substantial value? ‘Substantial’ to what effect?!

Maria Luigia Franceschelli

Court of Florence, case No. 5850/2010, 31 January 2017, Hermes International Scpa, Hermes Sellier SA, Hermes Italie SpA vs. Papini Paolo & C. Snc and Corsini Giorgio di Gianna e Paola Corsini Snc.

The Court of Appeal of Milan and the active role of the ISP in selling infringing services via the e-marketplaces White Pages and Yellow Pages

The liability of the Internet Service Providers (ISPs) is still an unsettled area of the case law both at European and national level, with a lot of recent cases that deal with ISPs and the unauthorized online distribution of audio-visual contents (see CJEU case C-610/15 and Court of Appeal of Rome – case Break Media – and Court of Turin – case Delta TV). Anyway, there is also another side of the case law on the liability of ISPs that deals with the selling of goods and services which infringe IP rights via e-marketplace (the leading case of the CJEU is case C-324/09 L’Oréal Vs eBay). In a recent decision, the Court of Appeal of Milan (here) shed light on the joint liability of the ISP and the professional users of its services.

The case at stake is based on the alleged infringement of the trademarks of some major manufacturers of domestic appliance (Electrolux, Candy, Ariston, Bosch, Hoover, Smeg and others, collectively the “Claimants”) by the company ABB, with others (the “Defendant”) via some adverts on the Italianonline’s websites White Pages and Yellow Pages. ABB offered maintenance and support services for domestic appliances – on the White Pages and Yellow Pages edited by Italiaonline – using the ABB’s registered trademarks “Boschexpert”, “Candyexpert”, Aristonexpert” and so on. The Court of Milan in first instance held that ABB’s trademarks were void and found ABB liable of trademark infringement and unfair competition against the manufacturers, since the consumers were misled by the use of ABB’s trademarks on the real origin of the support and maintenance services. Italiaonline has been found jointly liable of such IP violations and both ABB and Italiaonline have been ordered to jointly pay damages to the Claimants. Italiaonline reached a settlement with the Claimants while ABB appealed the Court’s ruling of first instance.

The Court of Appeal of Milan has confirmed the ruling of the Court of first instance in terms of determination of the illicit conduct and quantification of the damages but has clarified the position of Italiaonline as ISP whose electronic means have been use for committing an IPR infringement. Indeed, in the first instance Italiaonline has been fully indemnified by ABB since ABB had a preeminent role in the illicit conduct. This seemed to ABB inconsistent, since Italiaonline has been declared jointly liable for the same illicit conduct. According to ABB, Italiaonline as a technical ISP is the sole responsible of the search engine for the adverts on the websites White Pages and Yellow Pages, which results are misleading and determining confusion to the consumers.

According to the Court of Appeal, Italianonline’s websites can be considered Information Society Services pursuant to E-commerce Directive (despite the fact the White Pages and the Yellow Pages are published both in paper and in electronic form). This leads to the fact that Italianonline can be considered a host provider pursuant to Article 14 of the E-Commerce Directive for the websites White Pages and Yellow Pages, since it technically hosts on such websites the adverts of its professional clients, such as ABB. More in detail, in this case the ISP cannot invoke the safe harbour provision pursuant to Article 14 of the E-Commerce Directive due to its active role for the third-party adverts in return for payment, where Italiaonline does not merely technically process third party adverts but also edits promotional messages coupled with the third-party adverts and identifies the key-words for its search engine. While playing this active role – according to the Court of Appeals – the ISP is responsible for lack of control and for not having expeditiously removed the infringing adverts after the notices of the Claimants (the earliest ones dated 2003).

With regards to the relation between the infringing activity of ABB and the cooperation of Italialonline, the Court of Appeal found that, even if jointly liable, ABB had effectively a preeminent role in terms of relevance and wilfulness of the conduct and that the joint liability must be evaluated according to Article 2055 of the Italian Civil Code, pursuant to which, where two or more parties are held jointly liable, the party paying the damages can recover from the other parties the pro quota of damages attributable to the level of wilfulness and to the consequences of the conduct of the other parties (so called, right of recourse). The request raised by Italianoneline for indemnification of the damages determined by ABB is considered by the Court of Appeal as a right of recourse aimed at clarifying the pro quota  of responsibility of Italiaonline. The right of recourse is applicable pro quota also to ABB as party paying the damages. In light of this interpretation, the Court of Appeal awarded also to ABB a recourse against Italiaonline equal to the 30% of damages to be paid to the Claimants.

This precedent seems of interest because the Court of Appeal of Milan, while making clear application of the principles set forth by the Court of Justice in the leading European case law L’Oréal Vs eBay (an e-marketplace cannot invoke the safe harbour provisions under E-Commerce Directive if it plays an active role by optimizing and promoting the selling of infringing products or services), has even moved forward by clarifying a possible criterion for the attribution of responsibility between professional users and e-marketplaces. It would be of interest verifying whether the same approach could be adopted by other foreign jurisdictions, since the regime of joint responsibility under tort law seems to be matter of domestic jurisdiction.

Gianluca Campus

Court of Appeal of Milan, case No.  1076/2014, 14 December 2016, Italiaonline Spa Vs ABB Srl and Others (President of the Court: Hon. A.M. Vigorelli; Judge-Rapporteur Hon. F. Fiecconi)

The shape of the worldwide famous Vespa obtains protection in Italy under copyright law

Piaggio, the Italian company producer of the world wide famous Vespa scooter, was recently sued by the Chinese company Zhejiang Zhongneng Industry Group (“ZZIG”) in a quite complex case.

ZZIG offered for sale three scooters named “Revival”, protected by a Community design registration no. 001783655-0002, “Cityzen” and “Ves”, the shape of which was not covered by any registered IP right in Italy or in the European Union.

Capture ZZIG

As to Piaggio, the company owns the Italian 3D trademark no.1556520 claiming priority of the Community trademark no. 011686482, filed on 7 August 2013 and registered on 29 August 2013.

Capture Vespa

When Piaggio obtained the seizure of the three above motorbike models in the context of a Fair held in Milan, the Chinese company started an ordinary proceeding on the merits before the Court of Turin against Piaggio, seeking the declaration of non-infringement of Piaggio Vespa 3D trademark by its “Revival”, “Cityzen” and “Ves” scooters. Besides, it asked a declaration of invalidity of Piaggio’s Vespa trademark, based on the fact that it was anticipated by their design and thus not novel. Also, it held that the 3D trademark was void, as it does not respect the absolute ground for refusal established by the law.

Piaggio resisted and asked the Court of Turin to reject the above claims, declare that the Vespa shape is protected under copyright law, trademark law and unfair competition law and that those rights were infringed by ZIGG three models of scooters. As a matter of fact, Vespa was offered for sale by Piaggio since 1945.

First of all, the Court of Turin declared that the Vespa trademark does not lack of novelty, as it reflects a model of Vespa marketed since 2005, before the commercialization of ZZIG first scooter, i.e. “Cityzen”. Moreover, the Court of Turin excluded the existence of any absolute ground for refusal, stating that its shape was not technical nor standard and not even substantial as the reason why consumers chose the Vespa were not merely aesthetical. Based on these findings, the Court finally affirmed that only the “Ves” scooter constitute an infringement of Piaggio trademark.

This  said, the Court of Turin further held that the Vespa shape is eligible for protection under copyright law, as it is since long time worldwide recognized as an icon of Italian design and style, shown in advertising and movies, presented plenty of times at museum and exhibitions and part of many books, articles, magazines and publications. All considered, safe and sound evidence show that the shape of Vespa is unequivocally believed to be an artistic piece of designs by the main communities of experts worldwide. Nevertheless, the Court held that, again, only Ves scooter infringed Piaggio rights vested on its scooter as it presents features similar to the ones protected both under the Vespa trademark and copyright.

The decision (full text here) is indeed interesting as it critically examines the similarities and differences between the “original” good and the ones that are claimed to be infringing products and, while asserting the eligibility for protection of the Vespa shape both under trademark and copyright law, it excludes infringement for two products through a detailed and careful examination. This narrow approach is indeed interesting because it affirms the principle that the infringement of designs protected under copyright law shall be evaluated with an analytical examination similar to those applied in cases of trademark infringement.

A doubt might remain about the overlapping of trademark and copyright protection. Since the former never expires as long as the product is on the market (plus the subsequent five years, according to Italian law), one might ask what advantage for the right holder might subsist by ‘adding’ a protection limited in time, such as copyright’s. The answer might be: the dual protection functions as a ‘parachute’ for the case that one of the two, in a subsequent Judgement (Appeal or High Court: Cassazione in Italy) should be successfully challenged by a competitor.

Maria Luigia Franceschelli

Court of Turin, case No. 13811/2014, 6 April 2017, Zhejiang Zhongneng Industry Group, Taizhou Zhongneng Import And Export Co. vs Piaggio & c. S.p.a..

HOW MUCH A TRADEMARK SHALL BE USED BY A NON-PROFIT ASSOCIATION TO AVOID BEING DECLARED REVOKED FOR NON-USE? THE SEVERE OPINION OF THE COURT OF BOLOGNA

According to article 24 of the Italian Intellectual Property Code, an Italian trade mark shall be revoked (i) if, within a continuous period of five years, it has not been put to genuine use in connection with the goods or services in respect of which it is registered, and there are no proper reasons for non-use or (ii) if the use is suspended for the same amount of time.

Not many Italian decisions addressed the question of which uses are considered “genuine” and which is the sufficient amount of use that would put the right-owner safe from any contestation.

The Court of Bologna had the chance to investigate this question in a case (available here) involving a non-profit sailing club that sued a company when it discovered that it had started the production and commercialization of sailing cloths and accessories using the exact same trade mark already registered by the club and had registered a number of identical and similar trademarks for identical products (i.e. sailing accessories and garments).

immagine-iplens-moro

According to the defendants, however, the plaintiff could not enforce its earlier trademark because it had been used on the market in a manner that was not effective. Thus, they counter-claimed to declare it revoked for non-use.

The plaintiff resisted claiming that the use made of the “IL MORO” trademark in the years was genuine and continuous, in line with the purposes of the sailing club and the activities organized by its members. In particular, the plaintiff showed, by filing a number of pictures and invoices, that the trademark was used for clothes, shoes and accessories that were distributed for free during sailing races and similar events.

Bearing in mind that the rationale behind the provision on revocation for non-use is to “clean” the register from those trademark registration preventing third parties from registering and using a name or a logo as trademark in absence in the right owner of any interest in being secured such monopoly – which is indeed a goal consistent with the pro-competitive rationale of the requirement of availability (i.e. the need to keep free) – the case law actually adopts different approaches on the notion of use that is sufficient to evidence the subsistence of said interest.

According to a first theory, any type of use is sufficient, as long as it shows an actual interest of the right holder in continuing to distinguish its products/services on the market. Consequently, only the complete and total cessation, in any mode, of the trademark’s use would cause its revocation. Even a local, restrained in time or intermittent use could be thus considered sufficient (see Court of Milan decision of 10 October 1996, Court of Milan decision of 30 September 2002, Court of Turin decision of 21 December 2004 and Court of Rome decision of 22 May 2003 and, among the leading scholars, A. Vanzetti – V. Di Cataldo, Manuale di diritto industriale, Milan, 2012, page 283).

According to a second theory, to which the decision in comment adheres, only a sufficiently intense, stable and continuous use of the trademark on products or services offered for sale on the market can prevent revocation. This use shall be not symbolic: consumers shall be aware of the sign so that it is capable of distinguishing the products or services from the competitors’ (see Supreme Court case no. 16664 decision of 1 October 2012, Court of Naples decision of 2 February and Court of Milan 20 September 2002).

By upholding this second theory the Court of Bologna non only affirmed that the use made by the plaintiff was too limited for the small amount of sailing clothes and accessories produced by the club, but also claimed that said use was not genuine. This because the garments and accessories on which the trademark was fixed were promotional gadgets intended to be distributed for free to club members and in occasion of sailing events. In other words, they were not for sale. Thus, the “IL MORO” figurative trademark was, according to the Court of Bologna, not used to distinguish the sailing club’s products from the ones offered by other companies on the relevant market.

Even if the ‘requirement of availability’ would support the result of the decision, due to the limited use made of the trademark on the market, it is also true that trademark law does not require that only companies with a profitable business (and the consequent capability of demonstrating wide sales made on the Italian market) are entitled to register a trademark.

In particular, the provision requires the existence of a use and not that such use has generated incomes to the right owner. The EU Court of First Instance seems to have confirmed this point, having assessed – with respect to EU trademarks, but the provision is equivalent – that “the purpose of the provision is not to assess commercial success or to review the economic strategy of an undertaking, nor is it intended to restrict trade-mark protection to the case where large-scale commercial use has been made of the marks” (Case T-191/07 Anheuser‑Busch v OHIM, Inc. see also case T‑169/06, Charlott v OHIM and case T‑203/02 Sunrider v OHIM).

It thus seems that the evaluation of the existence of a use should be carried on taking into account also the type of business of the right-owner, on the basis of a case-to-case analysis. Otherwise, the trademarks registered by non-profit organizations would be seriously compromised.

Court of Bologna, case No. 9754/2013, 9 September 2015, Europa Yacht Club, Moro S.r.l. and Giovanni Benito Ballestrazzi v. Punta della Maestra S.r.l., Overseas Property LLC, ASD Il Moro di Venezia Yacht Club and Rama S.n.c..

MISLEADING FOOD (WINE) INDICATIONS STIGMATIZED BY THE ITALIAN COMPETITION AUTHORITY

In a recent decision (full text in Italian here), the Italian Competition Authority (“AGCM”), which is competent also for misleading advertising under the Italian Consumer Code, sanctioned the famous Italian high-quality food retailer Eataly, the wine distributor Fontanafredda, and the association Vino Libero for having marketed a series of wine bottles bearing the sign Vino Libero (“Free Wine”).

Vino Libero is an association promoted by Eataly which counts a series of wine producers, with an alleged “ethic” project of sustainable agriculture and oenology. Actually Vino Libero wines are not sulphites-free, however the maximum dosage thereof is lower by at least 40% than the limit set by EU Regulation 606/2009 (in fact, sulphites limits set by Vino Libero disciplinary are quite similar – a little lower – to those of the organic wine set out by EU Regulation 203/2012).

During a preliminary phase the AGCM considered the expression Vino Libero misleading and invited the parties to adopt an additional claim that must follow each mark Vino Libero: “free from synthetic fertilizers, free from herbicides and free from at least 40% of sulphites than the limit set by law. After having found that Eataly and Fontanafredda failed to fully respect the commitments on the additional claim, the AGCM issued a final decision and fined them.

Indeed, the AGCM held that the expression Vino Libero on a wine bottle, without further specifications, can effectively lead consumers to believe the wines bearing that mark are totally absent chemical fertilizers, herbicides and – above all – sulphites. Thus misleading them about the initiative Vino Libero and the actual presence of sulphites. In this regard, the AGCM excluded that the mere mandatory indication on the label about positive presence of sulphites (required by EU Regulation 1169/2011) is able to reduce the deceptive effect of the sign Vino Libero.

The AGCM’s reasoning is well grounded and stands against marketing initiatives playing with organic evocations. However, the optimal solution to put an end to the debate on sulphites would consist in imposing on wine producers stricter obligations to list ingredients and dosage on the labels.

Francesco Banterle

Italian Competition Authority (“AGCM”), decision No. 25980 of 13 April 2016, bulletin n. 15 of 9 may 2016

Are Concept stores eligible for copyright protection?

With a decision issued on 13 October 2015 (full text in Italian here), the Court of Milan stated that concept stores are eligible for copyright protection, even if they consist of a simple and straightforward design.

magi

The decision is the last of a long court-battle fought between two companies active in the cosmetics field.

Here the relevant facts. Kiko S.r.l., one of the protagonists in the Italian market of cosmetics, contacted an architectural firm asking them to project the interiors of their new stores, to be innovative and strongly distinctive. When the project was completed, approximately 300 stores were opened in Italy with a minimalist design, featuring essential symmetries and clear lines.

Afterwards, Wjcon S.r.l., one of Kiko’s competitors, opened a number of new stores in Italy that, according to Kiko, recalled the concept, design and colours characterizing the project of its stores.

Various decisions followed, with different reasoning and that, in essence, declined any type of copyright protection to the concept of Kiko’s stores. In 2010, by a decision as of 3 May 2010 (full text in Italian here), the Court of Milan rejected Kiko’s copyright and design infringement claims, resulting from the copying of all the essential features of its retail stores arguing that Kiko and Wjcon’s stores were similar only for details that were common and not distinctive in the field of cosmetics’ stores.

A similar ruling was issued a couple of years later by the Court of Rome (decision of 5 September 2012, full text in Italian here), that rejected Kiko’s copyright infringement claim, arguing that concepts stores do not fall under the scope of protection of copyright law, unless they have artistic value. The decision maintained that concept stores could not be protected under copyright law as works of architecture, but only as designs. Given that Italian Copyright Law provides that designs could enjoy copyright protection insofar as they present artistic value, the existence of a valid copyright on Kiko’s stores was excluded. As a matter of fact, the latter did not prove the existence of such a value for its stores.

With the October decision the Court of Milan followed a third approach. In short, the Court rejected the arguments according to which Kiko’s concept stores’ features were not original since they were common in the field and consisted of functional elements (and, hence, not copyrightable), and clearly affirmed that interior designs may be protected as works of architecture under copyright law as long as it is possible to identify an original act of creation.

According to the Court, originality may not be excluded even if the project consists in essential or simple features, part of the cultural heritage of the field, since the threshold for originality for concept stores is not different from the usual one, which is indeed quite low.

With particular regard to interior designs, originality must be recognized every time the project is not merely functional and the choice, coordination and organization of the singular elements of the store are arranged to obtain a new and creative final result.

In the Court’s view, Kiko’s shops were undeniably characterized by creative elements and their overall concept was peculiar and original. Even if such elements were already known in the field, originality may be inferred from the fact that no competitor had ever arranged before the features of Kiko’s shops in such a way. The fact that Wjcon copied the overall impression of Kiko’s concept stores, with merely minor differences, is not relevant in excluding copyright infringement considering that almost all the original solutions of the project where copied.

A distinct solution – in-between the approach requesting artistic value and the one satisfied with a low originality – had previously been adopted by a third group of decisions, granting copyright protection to interior design only when the architectural elements composing it were inextricably bound to the real estate and, nevertheless, original (see Court of Milan decision of 31 May 2006, Court of Milan decision of 10 July 2006 and Court Catania decision of 17 June 2000).

The complexity of the protection of concept stores under copyright law is demonstrated by the number of different theories proposed by the various decisions and is further confirmed by the provisional decree issued by the Court of Appeal of Milan as of 26 January 2016, where the October decision of the Court of Milan has been appealed by Wycon. The Court of Appeal decided to suspend the enforceability of the Court ’s decision, recognizing that the protection of concept stores under copyright law is a complex issue.

A last note: recently, also EUIPO Board of Appeal had the chance to examine Kiko’s shop and, with a decision dated 29 March 2016 (proceeding no. R 1135/2015-1), declared it not eligible for protection also under trademark law. We’ll see what’s next.

Maria Luigia Franceschelli

Court of Milan 13 October 2015, RG n. 80647/2013, Kiko S.r.l. vs Wjcon S.r.l.

The Kit Kat case: the famous chocolate bar doesn’t deserve to be protected as a trademark

On 20 January 2016 the England and Wales High Court (Chancery Division) issued its final decision on the Kit Kat case (the text is available here) dismissing the appeal filed by Société des Produits Nestlé SA (Nestlé) against the decision by which the Trademark Office rejected the trademark application for registration of the famous four stripes chocolate bar.

Preliminarily, it must be emphasized that the trademark application rejected by the Office concerned the three-dimensional sign corresponding to the shape of Nestlé’s four-finger KIT KAT product without the KIT KAT logo normally embossed onto each of the fingers of the product. This circumstance was decisive for both the decision of the English Court and that of the EU Court of Justice to which the former had applied for a preliminary ruling.

  kitkat

The dispute started in 2011 when Cadbury UK Ltd (Cadbury) filed a notice of opposition against Nestlé’s trademark application for infringement of

  • Article 3.1 lett. b) and lett. e), sub i) and ii) of Directive 2008/95/EU, according to which a trademark which is devoid of any distinctive character or which consists exclusively of the shape which results from the nature of the goods themselves or the shape of goods which is necessary to obtain a technical result shall not be registered or, if registered, shall be liable to be declared invalid, and
  • Article 3.3 of Directive 2008/95/EU, which provides that the registration shall not be refused or the trademark shall not be declared invalid if following the use which has been made of the trademark, it has acquired (before or after the date of application for registration or after the date of registration) a distinctive character (the so called “secondary meaning“).

In 2014 the England and Wales High Court (Chancery Division) addressed the CJEU for a clarification, in order to determine the appeals filed both by Nestlé and Cadbury against the Trade Marks Registry of the United Kingdom Intellectual Property Office’s decision issued in 2013. In its  decision, the Office had held that the Nestlé’s trademark was devoid of inherent distinctive character and had not acquired a distinctive character in relation to all goods covered by the application except for “cakes” and “pastries” and that the trademark consisted exclusively of the shape which was necessary to obtain a technical result.

 The CJEU’s decision

The Court of Justice’s decision was delivered on 16 September 2015 (available here) and has undergone many critics probably because it has determined the rejection by the English Court of the registration of the famous chocolate bar.

The decision, on one hand, is convincing where it states that the proof of the use of a shape trademark can be given also through the proof of the use as part of another trademark or in conjunction with such a mark (Nestlé’s trademark application for registration concerned, as said,  the shape of the bar without the KIT KAT logo). On the other hand, by affirming that the occurrence of  “secondary meaning” can be ascertained only by proving that the relevant class of persons (that is the “average consumer of the category of goods or services in question, who is reasonably well-informed and reasonably observant and circumspect”, and not also the trader) perceive the goods or services designated exclusively by the trademark applied for, as opposed to any other mark which might also be present, as originating from a particular company, the Court has given a very restrictive interpretation of the function of the trademark, since it seemingly excludes that the association of the shape with the trademark owned by the company is enough to assess the acquisition of the distinctive character.

The Court was requested of a preliminary ruling also about the obstacles under Article 3.1 lett. e) of Directive 2008/95/EU. On this point, it confirmed its previous case law according to which the grounds for refusal of registration set out by the provision operate independently of one another and it is sufficient that one of them is fully applicable to the shape at issue for precluding registration as a trademark of a sign consisting exclusively of the shape of goods (even in a case such the KIT KAT one), where that shape contains three essential features, one of which results from the nature of the goods themselves (the basic rectangular slab shape of the Nestlé’s chocolate bar) and two are necessary to obtain a technical result (the presence of the grooves running along the length of the bar, which, together with the width of the bar, determine the number of ‘fingers’).

 The English Court’s decision

However, in its final decision the English Court not only ignored the issue concerning the necessity to obtain a technical result but didn’t consider the case law, also recalled by the Court of Justice, according to which a sign which is refused registration under Article 3.1 lett. e) of Directive 2008/95/EU can never acquire a distinctive character (that is a “secondary meaning”) for the purposes of Article 3.3 (see C-299/99 Philips case, point 57 and 75; C-53/01 Linde case, point 44, C-371/06 Benetton case point 23-28 and C-48/09 Lego case point 47). Thus, the Court dismissed the appeal exclusively on the basis of the lack of proof of the consumer’s perception of the goods as originating from Nestlé.

Both decisions evidence, once again, how difficult is to validly register shape trademarks – especially shape trademarks concerning amorphous products like those in the food industry (however, the Court of Justice confirmed that the criteria for assessing the distinctive character of three-dimensional trademarks consisting of the shape of the product itself are not different from those applicable to all other categories of trademarks).

                                                                                                             Sara Caselli

England and Wales High Court (Chancery Division), 20 January 2016, Société Des Produits Nestlé SA v. Cadbury Uk Ltd

CJUE confirms that Adidas may oppose the registration, as a Community mark, of parallel stripes placed on the side of sports shoes: the degree of attention of the average consumers in purchasing “sport shoes” (second episode)

On 17 February 2016 the Court of Justice of the European Union (Case C-396/15, full text here), confirmed a decision of the General Court (commented on this blog) upholding Adidas’ opposition against Shoe Branding’s Community trademark (“CTM”) application for two stripes positioned on a shoe.

Adidas

The General Court found that “the difference in length of the stripes arising from their difference in inclination are minor differences between the marks at issue that will not be noticed by the consumer with an average degree of attention and will not influence the overall impression those marks produce on account of the presence of wide sloping stripes on the outside of the shoe”.

The CJUE’s order confirmed the General Court’s finding that the trademark applied for was similar to Adidas’ 3-stripes mark on footwear, and that there was both a likelihood of confusion and dilution under Articles 8(1)(b) and 8(5) of the CTM Regulation.

The Court states that since the General Court held that the differences between two and three stripes and in the length of the stripes were not sufficient to affect the similarities arising from the configuration of the signs at issue, it did conduct the overall assessment requested by the law and, therefore, did not err in law.

Unfortunately, the Court dismissed the ground of appeal relating to the General Court’s observation that the degree of attention of the average consumer of sports clothing is low, as the appellant did not indicate which paragraphs of the judgement under appeal it disagreed with or in any other manner substantiate its argument.

As noted in our previous comment, while the Board of Appeal stated that the average consumer is accustomed to seeing geometric designs on shoes and pays attention to the details of “sport shoes”, the General Court judged that since “sport shoes” are everyday consumer goods, the relevant public is made of the average consumer with an average degree of attention.

We were wondering how to reconcile what the General Court stated in his decision with the principles stated in decisions which have admitted that, with respect to famous trademarks, the public knows almost every detail and, therefore, can more easily recognize ad distinguish imitations, so that the risk of confusion between the signs is more difficult to occur (see Claude Ruiz-Picasso and Others, T-185/02, 22 June 2004, confirmed by C-361/04, 12 January 2006).

Even if the case demonstrates that position marks and other non-traditional trademarks can be very effective tools for famous brand owners to use against those who copy their trade dress in the EU, we reiterate our doubts regarding the degree of attention of the average consumer when purchasing “sport shoes” or, better perhaps, “sneaker” (normally bought by boys or girls very detail-oriented).

Finally, it must be noted that according to this case-law the extent of the exclusive right granted to Adidas by a position mark is very strong. Too much ?

Order of the Court of 17 February 2016 in Case C-396/15, Shoe Branding Europe BVBA v. Adidas AG

Gianluca De Cristofaro