Court rules on use of third-party trademarks in commercial advertising

In an order dated June 15 2012, the Specialised IP Division of the Court of Turin has issued its decision in a case involving Nestlé SA and Italian company Vergnano SpA (which sells coffee and coffee-makers), which concerned the use of a third-party trademark in commercial advertising. According to the court, such use is lawful if:

• it is necessary to clarify the purpose of the products in question; and
• it adheres to the principles of professional fairness.

In February 2012 Nestlé had applied for an interim measure based on the unlawful use by Vergnano of the trademark NESPRESSO. In particular, Nestlé was concerned about the fact that Vergnano claimed to sell coffee capsules that were compatible with Nespresso machines. Vergnano’s products were advertised with the claim: “Vergnano’s new capsules Èspresso1882, compatible with Nespresso coffee machines”.

According to Nestlé, the marketing of Vergnano’s capsules constituted unfair competition and unlawful comparative advertising, since the reference to the NESPRESSO mark intended to lead customers, who relied on the quality and goodwill of the brand, to switch to Vergnano, on the basis of the same quality standard.  

The Specialised IP Division of the Court of Turin ruled that the reference to the trademark NESPRESSO, without specifying the type of Nespresso coffee-maker that could have been used with Vergnano’s new capsules, exceeded the limits allowed by Italian law to use a third-party trademark in a descriptive manner.

According to Article 21 of the Italian Industrial Property Code, the holder of a trademark cannot prevent the use of its mark by third parties provided that such use is:

• necessary to clarify the purpose of the products in question, especially with regard to accessories and spare parts; and
• within the ambit of professional fairness - that is, the sign is not used as a trademark, but only for descriptive purposes.

In the present case, the statement “compatible with Nespresso coffe machines” was deemed to be too generic to be descriptive. Therefore, the court ordered that Vergnano add in its commercial communications specific information regarding the exact type and series of Nespresso machines with which its capsules were compatible.

The court, however, did not state that the manufacturing and sale by Vergnano of capsules compatible with Nespresso coffee machines represented, in itself, an act of unfair competition. Therefore, it limited its order to Vergnano's commercial communications.

Margherita Barié and Pietro Pouché, Carnelutti Studio Legale Associato, Milan