Injunction upheld in largest case of imitation of unregistered shape marks ever heard

Italy

With an order dated May 27 2013, the Court of Milan, Specialist Companies Division, has upheld an injunction prohibiting the manufacture, marketing, offer for sale and advertising of over 200 types of copycat products (eg, tables and chairs), in the biggest case of unfair competition for imitation and infringement of unregistered shape trademarks ever heard in Italy.

The court also ordered that the defendants:

  • pay a penalty for violation of the injunction (€10,000 for each day of delay in the execution of the decision, and €300 for each single violation, namely for every product sold or advertised); and
  • publish the decision in the most authoritative and widespread Italian newspaper, Corriere della Sera, and in the leading Italian magazine for architecture and design, Domus.

The case originated from the discovery by Pedrali spa (one of the leading Italian companies in the field of furniture production, winner of a 'Compasso d’Oro' prize in 2012) of some copycat products. The features of these products were protected by registrations as designs or models owned by Pedrali. These copycats were later found to be part of a systematic programme of imitation implemented by two other Italian companies (Vela Arredamenti srl and Iumex spa), covering more than 200 types of products, which were put on the market by the defendants with the slogan “the same as Pedrali’s products, but cheaper”. This is the biggest parasitical operation ever found within the Italian design market.

The Court of Milan, in a preliminary injunction dated July 2 2012 (which extended a previous decree granted ex parte), noted that the vast majority of Vela's and Iumex’s production was a “copycat imitation of almost all of Pedrali’s products”, to the extent that “they could not argue in their defence that it was a random selection of the most widespread products on the market”. According to the court, this:

confirmed the existence of a constant copying activity of Pedrali’s entrepreneurial initiatives put in place by the defendants, leading to a systematic exploitation of the ideas and initiatives of Pedrali, in order to obtain in a short period of time a strong market position in the sector.”

Subsequently, this decision was subject to review by the court’s board, which confirmed the court's findings by a decision of November 8 2012.

The case concerns mainly the issue of unfair competition for parasitical exploitation and "direct exploitation of another's performance" ("ripresa diretta della prestazione altrui") under Article 2598(3) of the Italian Civil Code, which punishes, among others, unfair behaviours intended to harm the business of others, namely:

  • the systematic imitation of products and commercial initiatives of a competitor, by means of a plurality of acts or a general behaviour (Supreme Court of Cassation, February 16 1988, Case No 1667); and
  • the copying of a competitor's product - whether the product is imitated in its entirety or taken as a starting point and changed slightly - because this conduct allows to save time, effort and money, and offers the possibility to put the product on the market in a shorter time than would normally be necessary (Supreme Court of Cassation, December 2 1993, Case No 11953).

Moreover, the Court of Milan granted protection to the shape of some of Pedrali’s products, considering them to be unregistered trademarks. In particular, the court noted that the shape of Pedrali’s products represented, at the time, an innovation in the relevant sector, with the consequence that these products had acquired a degree of distinctiveness through constant use and widespread advertising. Therefore, the defendants had developed "the same idea in different ways", thereby “strengthening the originality of Pedrali’s products”.

The decision is consistent with European case law, which clarified in several decisions how a shape can have inherent distinctiveness or gain distinctiveness through use (see, eg, Mag Instrument v OHIM (Case C-136/02); Storck v OHIM (Case C-24/05 P) and Unilever v OHIM (Case T-194/01)).

This case also confirms the high level of protection granted in Italy to the shape of products, whether registered or not, and the efficiency of the specialist divisions of the Italian courts in handling IP matters.

Cesare Galli, IP Law Galli, Milan

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