UNFAIR COMPETITION – ITALIAN CASE LAW

The Italian Supreme Court’s decision in the Jean Louis David case has confirmed that advertising a product as identical to the product bearing a competitor’s renowned trademark amounts to a parasitic exploitation of the competitor’s investments in that trademark.

The Italian Supreme Court has recently handed down a decision involving the interpretation of Italian unfair competition law.

The licensee for Italy of the JLD (Jean Louis David) trademark, used for franchise hairdresser salons and for hair care products also employed in the salons, had brought an action against PLM Srl, a company that markets hair care products to hairdresser salons.

The plaintiff claimed that PLM Srl had launched an advertising campaign targeted at Jean Louis David franchise hairdresser salons, in which the advertised products were presented as identical to those bearing the JLD trademark.

In the first instance decision, the District Court of Milan ruled that the message conveyed by the campaign at issue was a case of unlawful comparative advertising as well as unauthorised use of the JLD trademark, and that it amounted to unfair competition. The court had consequently ordered the defendant to pay damages.

After losing a second instance appeal, PML Srl brought the case before the Italian Supreme Court, which rejected the appeal in decision No. 100 of 7 January 2016.

PML Srl essentially claimed that since the advertised products did not bear the JLD trademark, there was no confusion between the products, and therefore the court of fist instance had erred in finding that the advertisement was intended to free ride on the renown of the products bearing the JLD trademark.

The Supreme Court’s decision rejects this claim, making it clear that confusion between products is not a condition for comparative advertising to be considered unlawful.

Article 2598 of the Italian Civil Code stipulates that misappropriating the qualities of a competitor’s products or business amounts to unfair competition.

Presenting one’s own products as similar or identical to the product of a competitor, thus exploiting the renown that that product has already gained with the target of the comparative advertisement, violates the above provision.

The decision underlines that what makes PML’s conduct unlawful is precisely the act of stating a substantial identity between the advertised product and the product bearing a renowned trademark, with the aim of exploiting the renown of a competitor’s product and capitalising parasitically on that competitor’s investments in trademark advertising.

The decision refers to the Supreme Court’s own case law, pointing out that unfair competition by appropriation of the qualities of a competitor’s products “exists when an undertaker, by advertising or equivalent means, attributes to its own products or its own undertaking qualities (…) that they do not possess, but are possessed by the products or the undertaking of a competitor, in such a way as to perturb the free choice of consumers”.

5 February 2016