By order of 6 May 2019, the Milan IP Court ruled in favour of the owner of a well-known textile brand against a retailer who marketed its products in substantially undervaluing ways, and which was therefore enjoined from this activity.

Specifically, the Court found that, even if the products had been original, the marketing at issue would be detrimental to the petitioner’s trademark rights and therefore unlawful pursuant to Article 5(2) Italian IP Code. According to this provision, in fact, the proprietor of the trademark has the right to oppose the further commercialisation of their goods, although they are put on the market with their consent, when there are legitimate reasons for this. In the present case, the following were considered “legitimate reasons” by the Court:

  • the sale in a single large stock in a manner detrimental to the prestige of the brand, given that the products were shown in stacked boxes;
  • the sale at ridiculous prices;
  • the use, for the purpose of product promotion, of images taken from the website of the brand owner;
  • the false indication, on the retailer’s website, of the existence of a collaboration with the owner of the trademark.

According to the decision in question, the above determined “the applicant’s right to oppose such commercialisation pursuant to Article 5(2), of the Italian IP Code, also in light of recent rulings by the Court of Justice (see CJEU in the Coty Germany judgment of 6 December 2017 (C-230/16), which excluded the exhaustion of the trademark rights where the use of the trademark causes a prejudice to its function of indication of origin, or gives an undue advantage to the user)”.

In addition, the order stated that “the above also amounts to – at least – unfair competition for lack of professional correctness, as it creates an undue connection with the well-known trademark holder and exploits images and photographs taken from the official website of the same“.

Finally, on the subject of risk in delay (periculum in mora), which is required by law for a preliminary injunction to be issued, the order found that this was given by “the disturbing effect on the customers and the market due to the infringement of the proprietor’s trademark rights and to the illegal economic use of the same trademark. To this, it must be added the risk of dilution of the value of the brand, that is linked to its prestige, with the consequent risk of contraction of its attractive power, which is difficult to restore”.

In light of the foregoing, the retailer was enjoined from further marketing the products and using the trademarks, with a penalty of € 300 for each day of delay.

In accepting the applicant’s request, the Judge also concluded that “the publication of the provision must be ordered, both as a preventive measure – as it is aimed at preventing further prejudice, by making the market aware of the likely illicit act – and on account of compensation. In this case, the really worrying quantities of counterfeit products found, together with the incorrect ways of selling them, also in terms of communication, make it advisable to make the market aware of the damage to the prerogatives of the brand owner”. Hence, the Court ordered the publication of the order in the Corriere della Sera newspaper in double the font size compared to the standard, at the expense of the retailer.