Court considers designer's right to use own name after leaving namesake company

On April 8 2014 the Court of Milan (Specialised Company and IP Division) issued a landmark decision in a case concerning the right of a fashion designer to keep using his name as a trademark after leaving the company that he founded and that still holds the rights to both the trademarks containing the designer's name and the company name (in the present case, the company name consisted of the designer's name followed by the initials 'SpA', the Italian acronym for 'joint stock company').

The case concerned well-known fashion designer Alviero Martini, creator of the famous 'map' print, who in 2005 left the company he had founded. The company still bears his name (Alviero Martini SpA) and holds several trademarks created by the designer, including ALVIERO MARTINI PRIMA CLASSE (in which the font used for the word 'Alviero Martini' is smaller and less conspicuous than that used for the words 'Prima Classe'). The court held that, notwithstanding the existence of such trademarks, the exclusive right to use the name Alviero Martini in the course of trade still belonged to the designer, as it was a well-known sign protected by Article 8(3) of the Italian Industrial Property Code. Accordingly, the court found that use by the company of the name Alviero Martini alone on apparel (ie, not within the trademark ALVIERO MARTINI PRIMA CLASSE) was unlawful; the court prohibited the continuation of such illicit behaviour and ordered the company to pay damages to the designer.

The court also found the company liable for breach of the contract governing the relationship between the parties, both for having used the name Alviero Martini alone in the course of trade and for having failed to communicate the end of the collaboration between the designer and the company.

However, the court rejected the designer's claim of forfeiture of the company's trademarks on the ground of deceptiveness, since it had not been proven that the company had "actively operated, with specific and concrete means, for the purpose of confirming in the consumer's perception that the assigned trademarks maintained a connection with the person and the activity of the designer, now totally estranged from the company".

The decision is important in two respects. First, it confirms that Italian law gives the holder of a famous name not only the (exclusive) right to register his/her name as a trademark (see the decision of the EU Court of First Instance in the Fiorucci case (Case T-165/06), confirmed by the Court of Justice of the European Union in Case C-263/09 P), but also the exclusive right to use the name in circumstances where such use implies a connection to the famous person or brings that person to mind.

Article 8 of the Industrial Property Code was amended in 2010 and now expressly provides for such protection (see Galli, "Codice della Proprietà Industriale: la riforma 2010", Milano, 2010, page 22 e ss). Therefore, well-known signs are considered in Italy as a sui generis category of distinctive signs, protected (even without being registered as trademarks) against any commercial activity aimed at exploiting the market value of such signs without authorisation. This is consistent with a comprehensive system for the protection of famous names (civil and commercial) and of the value of the sign as a communication tool, by protecting both the rights owner against any behaviour which constitutes a parasitic exploitation of such value and the public against deception. These two types of protections, considered as a whole, represent - within the perspective of Italian scholars and case law - the rationale of the rules on distinctive signs.

Second, and in line with such general approach, the decision also confirms that, in Italy, the deception of the public is a relevant factor for the forfeiture of trademarks, not only with regard to the material features of the products, but also with regard to any other circumstance which is essential in the consumers' opinion. Such deception gives rise to forfeiture when the rights holder does not comply with the message connected to its trademark (see, among other Italians scholars, Vanzetti-Galli, "La nuova legge marchi", Milano, 2001, page 5; Frassi, "Lo statuto di non decettività del marchio tra diritto interno, diritto comunitario ed alla luce della disciplina sulle pratiche commerciali ingannevoli", in Riv dir ind, 2009, I, pages 29 ff; Galli, "Lo statuto di non decettività del marchio: attualità e prospettive di un concetto giuridico", in "Studi in memoria di Paola Frassi", Milano, 2010, pages 371 ff; and Ricolfi, in Auteri-Floridia-Mangini-Olivieri-Ricolfi-Spada, "Diritto industriale. Proprietà intellettuale e concorrenza", Torino, 2009, page 114).

However, the decision does not seem to follow such approach completely, since it does not burden the rights holder with a positive and permanent "duty to inform the public" for the purpose of avoiding forfeiture, but simply imposes a "duty to use the mark in a non-misleading manner" - that is, the rights holder must avoid engaging in misleading behaviour, but is not required to rectify any actual deception among the public not caused by its positive behaviour.

This, however, does not seem to be consistent with the primary role that the perception of the public plays with regard to the distinctiveness of signs. In particular, Italian scholars have highlighted, especially for fashion products, the existence of "immaterial" features (creative authorship and stylistic consistency) which take on a critical importance for consumers. The fact that, nowadays, trademarks are protected against non-confusing uses of identical or similar signs, where such uses are detrimental to, or take advantage of, the distinctiveness or reputation of the trademark, requires extensive protection against deception among the public, with the aim of balancing the different interests of players in the field - rights holders, competitors and consumers - and coordinating trademark law with other aspects of business communications, such as advertisements (Galli, "Lo statuto di non decettività del marchio: attualità e prospettive di un concetto giuridico", cit).

Therefore, the present decision is an important contribution in the debate on the functions of trademarks and other distinctive signs, and on the necessity to adjust the assessment of validity and protection to the reality of the market.

Cesare Galli, IP Law Galli, Milan