TRADEMARKS – ITALIAN CASE LAW

A decision of the Italian Supreme Court has confirmed that a weak trademark can enjoy the same level of protection as a strong one if it has acquired distinctiveness through use, and that likelihood of confusion and unfair competition must be assessed by applying the correct criteria.

The Italian Supreme Court’s decision No 1861, issued on 2 February 2015, concerns the dispute between Italian sofa and armchair manufacturers Natuzzi S.p.A., owner of the earlier Divani&Divani trademark, and Divini&Divani S.r.l., owner of the later Divini&Divani trademark.

Facts in the case

Natuzzi S.p.A. brought proceedings before the District Court of Bari, claiming trademark counterfeiting as well as unfair competition, and requesting that Divini&Divani be barred from using its trade name and the Divini&Divani trademark for sofas and armchairs.

The first instance decision upheld the counterfeiting claim and awarded damages for undue advantage, but found against the unfair competition claim.

Divini&Divani appealed the decision, denying any likelihood of confusion and claiming weakness of Natuzzi’s Divani&Divani trademark. The Court of Appeal of Bari upheld the appeal, amending the first instance decision and rejecting all of Natuzzi S.p.A.’s claims.

The Supreme Court decision

Natuzzi S.p.A. appealed to the Supreme Court claiming, in essence, that the appeal decision was contrary to the provisions on trademarks of the Italian Industrial Property Code, for the following reasons:

1) by considering the Divani&Divani trademark weak, on the ground that it has a low degree of distinctiveness because it consists of a commonly used term describing the product, the decision failed to take into consideration the distinctive character acquired by the trademark in eighteen years of substantial use in trade and advertising;

2) the decision failed to consider the high likelihood of confusion for the average consumer due to the extreme similarity between the two marks.

The Supreme Court upheld both of Natuzzi S.p.A.’s arguments.

Concerning the first argument, the Supreme Court found that in considering the Divani&Divani sign a weak mark, and as such deserving to be protected only from identical imitations, the appeals court had not followed the principle set forth by Supreme Court case law that originally weak trademarks can acquire distinctiveness (also knowns as “secondary meaning”) as an effect of a high degree of sales and advertising.

According to the Supreme Court’s case law, weak trademarks are protected from counterfeiting if it is not possible to rule out a likelihood of confusion with regard to the nucleus of the trademark.

Regarding the second argument, the appealed decision failed to apply the criteria necessary to assess the likelihood of confusion between two signs. Such criteria required the appeal court to assess whether the Divini&Divani sign was likely to be confused with the earlier Divani&Divani trademark from the point of view of the average consumer, whereas the court merely assessed the similarity between the single elements of the two signs. Moreover, the court of appeal should have assessed whether by using the trade name Divini&Divani the company intended to appropriate the nucleus of the earlier trademark for the purpose of orienting the consumer’s choices.

In conclusion, the Supreme Court’s decision orders the Court of Appeal of Bari to re-examine the case in accordance with the principles expressed in the decision.