Two Guccis enjoined from using their names as trademarks

United States of America
In Gucci America Inc v Gucci (Case 07 Civ 6820, August 5 2009), the US District Court for the Southern District of New York has enjoined members of the Gucci family from using their own names in connection with the sale of various consumer products.

The plaintiff, Gucci America Inc, owns the famous GUCCI mark in the United States for use with designer consumer products. The defendants included, among others:
  • Jennifer Gucci, who was married to Paolo Gucci, the grandson of the Gucci company’s founder and, until 1978, the chief designer for Gucci America's parent company in Italy;
  • Gemma Gucci, the daughter of Jennifer and Paolo Gucci; and
  • Edward Litwak, the licensing agent for Jennifer and Gemma Gucci.
The court recognized that several principles were relevant to its decision in this case. First, there is no absolute right to use one's surname as a trademark. Where a newcomer seeks to use his or her surname as a trademark, he or she must take reasonable precautions to prevent confusion with an earlier mark including the same surname. Second, in cases where the later user enters a particular line of trade for no apparent reason other than to use a conveniently confusing surname, a court may enter a broad injunction against such use. An absolute ban on the use of the surname will be appropriate where the enjoined party’s only interest in using the surname is to free-ride on the reputation of a better known party.

The court noted that there had been earlier litigation between Gucci America - under its prior name, Gucci Shops - and Paolo Gucci. In 1983 Paolo Gucci sued Gucci Shops for a declaration that he had the right to use his name as a trademark. In 1988 the district court held that Paolo Gucci committed trademark infringement and false designation of origin by designing handbags and other leather goods for an Italian company called Italia Italia and licensing that company to use his full name for those products. The court noted that the US Patent and Trademark Office (USPTO) had refused to register marks consisting of or including the name Paolo Gucci. 

While the Gucci Shops decision precluded Paolo Gucci from using his name as a trademark, the court, recognizing Paolo Gucci’s experience and reputation as a designer for Gucci, held that he could use his name to identify himself as the designer of products sold under a separate trademark that did not include the name Gucci. The court stated that Paolo Gucci’s name should always appear after the trademark in advertisements and in labels, and that it should be no more prominent than the trademark. Paolo Gucci was also required to use a disclaimer to notify consumers that he was not affiliated with any Gucci entities. Finally, the court held that these rights and obligations were personal to Paolo Gucci.

In the present case, Jennifer and Gemma Gucci argued that the Gucci Shops order was applicable to them, even though by its terms it was personal to Paolo Gucci. They also argued that if it was not applicable to them, a similar order allowing limited use should be applied to them. The court rejected these arguments, noting that:
  • the Gucci Shops order, by its terms, applied only to Paolo Gucci; and
  • Jennifer and Gemma Gucci were not entitled to a similar order. 
The court observed that because Paolo Gucci had been a leading designer of Gucci products for many years, “it seems implausible to place him in the same legal context as Jennifer Gucci and Gemma Gucci, who had little or no reputation, skill or experience as designers”. 

Moreover, even if Jennifer and Gemma Gucci were entitled to make the same type of limited use as Paolo Gucci, the court held that they had used their names in ways that would have violated the Gucci Shops order. For example, one product bearing Jennifer Gucci’s name bore only her name and no other trademarks, as would have been required by Gucci Shops. Similarly, none of the products bearing Gemma Gucci’s name displayed a disclaimer of non-affiliation with Gucci America.

The court thus found trademark infringement, holding that:
  • several confusion factors strongly favoured Gucci America (eg, the strength of its marks, the similarity of the competing marks, the defendants’ bad faith and the effect of the awareness of designer marks on confusion); and
  • other factors also favoured Gucci America, though not as strongly (eg, the proximity of the goods, actual confusion and lack of quality control over the defendants’ products). 
The court also found dilution by blurring.

Turning to relief, the court decided to enter a broad injunction. It enjoined the defendants from any commercial use of the names Jennifer Gucci or Gemma Gucci, and from attempting to register Jennifer Gucci or Gemma Gucci or any other name or mark that is confusingly similar to Gucci America's marks for products involved in the case (ie, coffee, bedding, housewares, cosmetics, hosiery, handbags, wine and gelato). 

The court based this broad injunction on several factors, including the following:    
  • bad faith by the defendants;
  • the defendants’ awareness of Gucci America's famous GUCCI marks; 
  • the defendants’ knowledge that the USPTO had refused to register the JENNIFER GUCCI and GEMMA GUCCI marks due to likely confusion;
  • the defendants had engaged in an unlawful licensing scheme notwithstanding the USPTO's refusal to register their marks; and
  • the defendants had failed to obtain a written legal opinion as to the scope of their licensing rights.
The court decided that Jennifer and Gemma Gucci might in the future be permitted to use their full names on new products or services not within those involved in this case, but only if several requirements were met: 
  • prior written approval from the USPTO, presumably in the form of a registration;
  • service on Gucci America of a copy of any application for registration;
  • a written opinion from recognized trademark counsel that the proposed use is lawful;
  • the use must relate to goods or services actually designed by Jennifer Gucci and/or Gemma Gucci;
  • Jennifer and/or Gemma Gucci must have acquired demonstrable reputation(s), skill and knowledge with respect to such goods or services; 
  • all uses of the marks JENNIFER GUCCI and/or GEMMA GUCCI must be accompanied by a prominent disclaimer stating that Jennifer and Gemma Gucci are not affiliated or associated in any way with Gucci America or Gucci products; and
  • Jennifer and Gemma Gucci must comply with the requirements that were imposed on Paolo Gucci in the Gucci Shops decision.
The court also decided to award an accounting of profits against all the defendants, based on factors such as bad faith, inapplicability of laches and the absence of any evidence of unclean hands. The court also awarded punitive damages against the licensing agent. The court left it to the magistrate judge to determine the amounts of profits and punitive damages. Finally, the court awarded reasonable attorneys' fees against all the defendants, finding that the case was “exceptional” - the Lanham Act's requirement for awards of attorneys' fees.

David S Fleming, Brinks Hofer Gilson & Lione, Chicago

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