Supreme Court rules on unfair competition under Civil Code

The Italian Supreme Court has held that use by a third party of a trademark similar to a mark used by a major competitor for similar goods constitutes an act of unfair competition under the Italian Civil Code (Case 17144, July 22 2009).

The dispute involved a small shoe manufacturer, Calzature Carpan Srl, and well-known shoe company Salvatore Ferragamo Italia SpA. On November 11 1997, after finding in a store called MD several pairs of shoes manufactured by Calzature and sold under the mark F.LLI FERRAZZANO, Ferragamo filed a petition for pre-trial injunction with the Court of Florence. Ferragamo asked that the court:

The court ruled in favour of Ferragamo, pointing out the visual and phonetic similarities between F.LLI FERRAZZANO and Ferragamo's mark FERRAGAMO.

 

Subsequently, Ferragamo started proceedings against MD and Calzature before the Court of Florence, alleging that their conduct amounted to unfair competition and trademark infringement. Following a settlement agreement between Ferragamo and MD, the proceedings continued between Ferragamo and Calzature. The unfair competition claim was eventually heard by the Supreme Court.

 

The Supreme Court held that use by a third party of a trademark similar to a mark used by a well-known competitor for similar goods constitutes an act of unfair competition under Article 2598 of the Civil Code, even where the relevant goods differ vastly in price and quality. The court pointed out that unfair competition may occur despite the fact that the parties have different target markets.

 

Furthermore, the court clarified that the concept of 'confusion', which constitutes one of the elements of unfair competition under Article 2598 of the code, results not only from the identity of the products, but also from the fact that the parties engage in the same activity. Therefore, even though Ferragamo's goods were of a superior quality, the relevant public might be led to believe that Calzature's products were part of a lower-quality range launched by Ferragamo.