Trademark assignment agreement and counterfeiting

On the issue of trademark and counterfeiting, we propose here below the case concerning the trademark Love Therapy by Elio Fiorucci, initially considered a counterfeit trademark by the Court of Milan, a statement not shared by the Court of Appeal of Milan but finally approved by the Italian Corte di Cassazione. Let’s find out why.

The Italian “Corte di Cassazione” (Section I, May 25, 2016 n.10826) has had occasion to rule on the matter of the assignment of a patronymic trademark, consisting of the name of a stylist, and on the possibility that such stylist uses, after the assignment, new brands formed by his name in addition with further words.

The main issue can be summarized as follows:

can a famous fashion designer, after selling his trademarks composed of its name, use new trademarks also containing his name?

In the matter in exam the new trademark used by the designer was formed not only by his surname, but also by his first name (absent in the assigned trademarks), in addition to other verbal elements (LOVE THERAPY by ELIO FIORUCCI).

The case Love Therapy by Elio Fiorucci: judgment of the Court and of the Court of Appeal

The Court of Milan affirmed the infringement of the assigned trademarks (in which there was the name “FIORUCCI”) by the trademark “LOVE THERAPY by ELIO FIORUCCI”.

On the contrary, the Court of Appeal of Milan considered that

“the personal right to the name (guaranteed by article 22 of the Italian Constitution by article 6 of the Italian Civil Code and by ECHR) remains intact, even if it involves the assignment of the economic rights, so that it is impossible to think to a kind of “perpetual non-competition clause”.

The case Love Therapy by Elio Fiorucci: judgment of the Italian Corte di Cassazione

The Corte di Cassazione points out that in its previous judgement (n.29879 of 2011) stated the principle according to which

“the commercial use of a patronymic name must be conform to the principles of professional integrity and, therefore, it cannot be done with the function of a trademark, namely distinctive, but only descriptive; this is the rule according to which the owner of a trademark cannot prohibit to a third party to use its name in the economic activity; as a result, there is counterfeiting when the contested trademark includes the protected patronymic, even if it is accompanied by other elements”.

The Corte di Cassazione also notes that patronymic trademark

“generally is a strong mark and for this reason its inclusion in another trademark or trade name cannot be considered neither legitimate nor lawful, unless the use by a third party of its own name (which collides with a former trademark, registered by another party) is justified by the existence of a real descriptive exigency related to its activity, products or services”.

The Cassazione, therefore, annuls the judgment of the Court of the Appeal and establishes a new trial on the merits, taking into account the following principles of law:

“In case of a distinctive sign consisting of a patronymic name and validly registered as a word mark, it is not possible to adopt an identical or similar name, neither as trademark nor as company name, not even by the person who has that name, because the right to the name has a compression in the economic and commercial activity, when the name has been registered as a trademark, first, and has become famous, then, thanks to the same stylist who has later assigned such mark”.

“The inclusion, in a trademark, of a surname which coincides with the name of the person who has previously assigned a trademark (become famous) including such name, is not in accordance with honest practices if it is not justified, in a strictly limited extent, by the existence of a real descriptive need inherent to the activities, products or services offered by the person who has certainly the right to conduct its own economic, intellectual or creative activity but who has not the right to transform its activity in an activity parallel to that for which the earlier mark has been registered and played a remarkable distinctive function”.