The Milan IP Court, on 12 July 2017, decided on a proceeding commenced by two Chinese shop owners against the Florentine fashion house Ferragamo S.p.A. (Docket no. 7940/2017). The plaintiffs had asked the Court to declare their non-infringement of Ferragamo’s historical trademarks – as represented below – reproducing the metal buckles “Vara”, which have been applied to Ferragamo’s leather goods since 1978, and to order the defendant to pay damages for the alleged unfair competition put in place against them.

Ferragamo, in 2015, twice warned the counterparties to stop selling some shoes whose buckles were allegedly infringing its trademarks; this, in the plaintiffs’ opinion, amounted to unlawful aggression against them as they considered the charge of infringement unfounded: hence the alleged unfair competition. In addition, the plaintiffs complained that Ferragamo had taken similar initiatives only against Chinese dealers and not against its more significant European competitors. To the plaintiffs, there could be no confusion between the signs, nor infringement, since their own shoes were on the market at a price ten times lower than that of Ferragamo’s shoes and they showed word trademarks different from the Florentine fashion house’s.

Ferragamo asked the Judges to reject the counterparties’ claims, considering them unfounded, and counterclaimed to condemn the claimants to pay it damages for trademark infringement and unfair competition.

 

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Ferragamo’s EUTM no. 101931 and 551390Plaintiffs’ products

 

In the decision under review, the Court firstly pointed out that the plaintiffs’ assumption that Ferragamo would act only against Chinese infringers was totally baseless, recalling some previous legal cases in which the Vara trademarks had already been protected against competitors such as Bata, Bally and H&M.

Then the Judges stated that the buckles on the shoes commercialised by the claimants were counterfeits since they slavishly reproduced the Vara trademarks. Consequently, the Judges concluded, there was infringement regardless of whether or not there was a real likelihood of confusion between the goods. In any case, the Judges continued, even if this were not the case and even if such likelihood of confusion were to be excluded in light of the concrete circumstances of the trademark use (as argued by the plaintiffs), the confusion between the signs must be considered not only at the time of purchase, but also during their subsequent use by the purchasers (i.e. so-called post sale confusion). This is because third parties who see the goods at issue used by the purchasers may be wrongly induced to believe that they come from a particular company rather than from the actual one. The considerably different price and the indication of different trademarks on the plaintiffs’ buckles, far from excluding the confusion between the signs (as argued by the plaintiffs) showed, to the Judges, the intentional appropriation of the qualities of Ferragamo’s trademarks – undoubtedly well-known – put in place by the plaintiffs in order to confuse consumers about the true origin of their goods and to parasitically couple the defendant’s customers. This is particularly true given that most customers are more interested in exhibiting those trademarks, which have become the symbol of a high social status, rather than in the relevant goods themselves.

The Judges also noted that, even by applying the rules regarding well-known trademarks – which the Vara trademarks were considered to be – the commercialisation of the shoes put in place by the plaintiffs constituted infringement, since it was detrimental to the reputation of Ferragamo’s trademarks and, at the same time, took unfair advantage of such reputation.  The unlawful use of signs similar to Ferragamo’s trademarks for low quality and cheap goods, in fact, degraded and diluted those trademarks not only because it created uncertainty about the fact that the goods originated from Ferragamo, but also because it affected Ferragamo’s capacity to evoke quality, elegance, exclusivity and prestige. This was also considered to be relevant to prove the unfair competition put in place by the plaintiffs.

In light of all the above, the Court dismissed the plaintiffs’ claims, enjoining them from continuing to produce and sell shoes bearing the counterfeit buckles (with a penalty of € 100 for any breach of the order and € 500 for each day of delay in complying with it) and condemned each plaintiff to pay a total of € 15,000 for damages, € 6,000 for legal fees and € 1,500 for having twice failed to comply with the order to submit in court their accounting records relating to the shoes at issue.