Ambush marketing and protection of promotional investments between past and future

Gaia Bellomo - Associate

In view of the next Winter Olympics, which will feature the mountain territories of Lombardy and Veneto as the protagonists of the world sports scene, an important regulatory instrument will protect registered trademarks and companies from parasitic and misleading advertising, carried out not only during the Olympics, but also during all sporting events or trade fairs of national or international importance that will take place on Italian territory.

The new discipline that counteracts unauthorized advertising, is contained in the decree-law on 'Urgent provisions for the organization and holding of the Winter Olympic and Paralympic Games Milan-Cortina 2026 and the ATP Finals Turin 2021 - 2025, as well as on the prohibition of parasitic advertising', published in the Official Gazette n.66 of March 13, 2020, converted into Law no.31 of May 8, 2020 and published in the Official Gazette no.121 of May 12, 2020, and represents the first organic intervention of the Italian legislator in this matter, having been preceded only by contingent measures for individual sports events.

Unauthorized advertising associated with events of national or international resonance is defined in practice as 'ambush marketing' and identifies the unauthorized conduct of those who associate their brand with an international event, for the sole purpose of exploiting its media resonance and without bearing the costs of sponsorship.

Ambush marketing gives rise not only to a deception for the public - which will associate the brand illegally connected to the event with the event itself - but also to a parasitic link with the actual sponsors of the event and may constitute a violation of the rules protecting unfair competition (art. 2598 Civil Code) and fair advertising communication (Legislative Decree no. 145 of August 2, 2007 and the Advertising Self-Discipline Code).

In particular, the regulation prohibits the following activities:

1. the creation of an indirect link between a trademark or other distinctive sign and one of the events, suitable to mislead the public about the identity of the official sponsors;
2. falsely stating in one's advertising that one is an official sponsor of one of the events; or
3. the promotion of one's own brand or other distinctive sign, through any action, not authorized by the organizer, that is suitable to attract the attention of the public, carried out on the occasion of one of the events, and suitable to generate in the public the erroneous impression that the author of the conduct is the sponsor of the sporting event or exhibition itself
4. the sale and advertising of products or services that are improperly marked, even only in part, with the logo of a sports or exhibition event, or with other distinctive signs likely to mislead the public about the logo and to create the erroneous perception of any connection with the event or its organizer.

Depending on the way it is carried out, ambush marketing is usually classified into: "insurgent ambush", which is the organization of surprise initiatives close to the event; "predatory ambush", which uses distinctive signs in connection with or indirectly recalling the event “saturation ambush", which occupies all the published space left over from that used by official sponsors.

From a temporal point of view, the bans operate from the 90th day prior to the official start date of the sports or exhibition event, until the 90th day after its conclusion, while, from an operational point of view, sponsorship contracts for athletes, teams and participants in events are excluded from the rule.

The authority in charge of ascertaining and repressing ambush marketing conduct is the Antitrust Authority (AGCM), which can apply administrative fines ranging from 100 thousand euros to 2.5 million euros, depending on the case.

Recently, it was precisely the AGCM that dealt with a case of ambush marketing relating to the 2020 UEFA Cup, going so far as to fine the e-commerce Zalando com 100,000 euros against Zalando SE ("Zalando"), for violation of Article 10, paragraphs 1 and 2, letter a), of Decree Law No. 16 of March 11, 2020.

The censured agreement consisted of the display, in the same square in Rome where the official Euro 2020 area was set up, of a poster asking "Who will be the winner?" accompanied by the distinctive signs of Zalando affixed to a soccer shirt flanked by the flags of the Euro 2020 national teams.

This advertising was deemed illicit by the AGCM because Zalando's poster was likely to make consumers believe that Zalando was an accredited partner of the event as it created an undue connection between Zalando itself and the event of which it was not an official sponsor.

The Agcm's decision was careful to value all the circumstances of the case and, therefore, in view of the upcoming winter games, it is of primary importance that companies carefully evaluate their marketing campaigns before accidentally incurring in profiles of violation of advertising regulations.

Italian version

• Intellectual Property

Wine trademarks between validation and tolerance of use

Laura Bussoli - Senior Associate

With a recent ordinance (09.02.2022) the Court of Turin has expressed itself regarding the counterfeiting of some trademarks registered by a wine cellar, mainly for wine products in class 33. In the aforementioned order, the Court of Turin also took the opportunity to clarify the difference between the legal institution of validation, provided for by art. 28 of the Industrial Property Code, and the different, albeit relevant, phenomenon of tolerance with respect to the use of a later trademark by the owner of the earlier registered trademark.

The trademarks involved in the case, which were written on the labels of bottles, consisted in particular of the word "SOLO" accompanied by the type of wine (pinot, prosecco, shiraz, etc...) or alcoholic beverage (grappa). These were trademarks regularly registered by the owner at a national level.

In particular, the trademark invoked in the precautionary proceedings was the following:

The appellant, a wine cellar in Frascati, therefore contested the use of the de facto trademark "SOLO PINOT NERO" for wine products by a competitor in the Piedmont area, claiming infringement of its earlier trademark registered under art. 20 C.p.i. (the respondent used a trademark identical or very similar to that of the appellant for identical products).

The defense of the respondent was based first of all on the exception, rejected by the judge, of the validation pursuant to art. 28 C.p.i.. This provision states that the owner of a registered trademark who, for 5 consecutive years, tolerates, being aware of it, the use of a later registered trademark that is the same or similar, cannot therefore ask for it to be declared null and void or oppose its use for the goods or services in relation to which the said trademark has been used.

The ratio of this institute is to be found in the balancing of two different interests: on one hand, that of the owner of the later trademark to avoid seeing the investments made over the years for the accreditation of his own sign cancelled, and on the other hand, that of the consumer to avoid seeing a situation suddenly changed which is now consolidated.

The norm is clear in reserving the benefit of validation only to subsequently registered trademarks and the prevailing jurisprudence is in line with the literal interpretation of the norm. However over the years, also on the basis of some doctrinal ideas, this literal interpretation has seemed to be lacking. Just in the wine sector and just the Court of Turin in 2016 in fact had clearly left to glimpse the possibility of an analogical interpretation (extension) of the rule on validation also to trademarks of fact.

With judgment no. 2256/16 of 22.4. 16 the Court of Turin in fact had clearly argued about the advisability of extending the benefit of validation to de facto trademarks: according to the Court, since the de facto trademark is protected by the rules on unfair competition, rules that implement "principles of protection of the wealth produced by investments and aversion to parasitic initiatives", it must be reached "if not to an analogical application of the institution of validation to unregistered trademarks - at least" to deny protection to a trademark "with respect to equal or similar signs used for a long time in the knowledge and without the opposition of the owner of the trademark".

Well, with the ordinance of February 2022, the same court of Turin seems to go back on its own steps: according to the Court, "Given that it could not be spoken of validation of the trademark, ex art. 28 CPI, because this effect is prescribed only with reference to registered trademarks, the tolerance of the use of the trademark of others, by the owner of the previous registered trademark, could demonstrate the absence of an abstract danger of confusion about the different entrepreneurial origin and involve a limit to the protectability of the previous trademark".

While therefore denying analogical extensions of the validation rule to unregistered trademarks, the Tribunal highlights the relevance, for the purposes of excluding the likelihood of confusion and therefore infringement, of conduct of tolerance with respect to later de facto trademarks by owners of earlier registered trademarks. However, even in the case of tolerance, the Court recalls the limits of its operativeness: "the case of 'tolerance' cannot be recognized where there is no proof of effective knowledge, on the part of the owner of the earlier trademark, of the subsequent use, for a certain period of time, of the de facto trademark of others".

"For the purposes of the recognition of this "tolerance", it is not sufficient a presumed inactivity of the owner of the earlier trademark with respect to the use of the later trademark, but it is necessary that the owner of the earlier registered trademark has put in place, while being aware of such use, behaviors that can be considered as tolerance of such use (Trib. Venezia Sez. PI, 20/10/2006)."

The burden of proof of this tolerance is on the owner of the later trademark. The proprietor of the later trademark must prove, not only that the proprietor of the earlier trademark was aware of the filing of the later trademark, in a concrete manner and not on a presumptive basis, but also that the proprietor of the earlier trademark has shown tolerance to such use for a certain period of time. Therefore, proof (or fumus thereof) of actual knowledge of the use of the later trademark is necessary, because in the absence of actual knowledge of the use of the other trademark, one cannot even speak of tolerance (Turin Tribunal 15/1/2010).

Italian version

• Intellectual Property

Patronymic Trademarks - The Supreme Court establishes the criteria for the lawfulness of use

With a decision rendered last July , the Supreme Court put an end to a dispute that took place in courts in 2011 and related to the use of the distinctive sign "Salini", which opposed two branches of the Salini family, both active in the construction sector, which for two generations shared the same entrepreneurial history.

The question brought to the attention of the Supreme Court concerned the legitimacy of the use by both parties of the common patronymic in the same economic activity (the construction of buildings), after the foundation by one of the two cousins of his own independent construction company, Salini Locatelli S.p.A., in direct competition with Salini Costruzioni S.p.A., until then the family company.

In its appeal to the Supreme Court, the appellant argued that the rule governing limitations on the use of trademarks (Article 21 of the Italian Intellectual Property Code) - which does not allow the proprietor of a trademark to prohibit third parties from using his name and address in their economic activity - should also apply to all distinctive signs, i.e. all those elements that identify a certain business activity to the public, including the company name.

The Supreme Court ruled that - although it is in principle admittable to include the founder's patronymic in the company name - it is in any event necessary to verify in concrete that the adoption of the patronymic is not likely to cause confusion.

Under Italian company law there is companies have to indicate the surname or the initials of the entrepreneur in the company name (Article 2563 of the Civil Code); in this regard the Court of Cassation pointed out that it is necessary to adopt a stricter judgement on the conformity of the use of the patronymic with the principles of professional correctness, taking into account both the likelihood of confusion between the two signs and the danger of association between them. A judgement of this kind cannot disregard a concrete verification of the competitive relationship between the two companies concerned.

In the present case, the two companies shared the same identifying "heart" of the sign, consisting of the word "Salini", and both were active in the same construction field; in this context, the inclusion of the element "Locatelli" was not sufficient to protect the company founded subsequently from a likelihood of confusion or association with the pre-existing company.

Referring to its well-established case law on this point (see, e.g., Italian Supreme Court, judgment no. 21403 of 14 August 2019), the Supreme Court stressed that, in the conflict between two companies using the same identifying sign, the one that is first enrolled in the register of companies with that sign must prevail. This point brought to the rejection of Salini Locatelli S.p.A.'s appeal, since the Court asceirtained the existence of a concrete likelihood of confusion and association between the two competing companies.

The judges of legitimacy emphasised the pro-competitive value of the rules limiting the exclusive right (potentially perpetual) of the owner on his distinctive signs (trademark and company name, respectively), reaffirming that the right to prohibit third parties from using a similar or confusable signs is severely limited in the event that the third party uses a similar or confusable sign in his economic activity, which, however, consists of his own name and surname.

The Italian law is clear in stating that this limitation must not result in undue exploitation of the reputation of another person's distinctive sign: only those uses of another person's sign which conform to the principles of professional fairness have to be tolerated by the trademark owner. The reference to a usage in conformity with these principles means that, if someone uses another person's distinctive sign - even if it is part of his own name and surname - in such a way as to unduly enhance his own product and in such a way that it constitutes an appropriation of the merits of others, such use must be considered unlawful as not in line with professional fairness.

Therefore, the competitor's personal name can lawfully appear on the goods and be used within the entrepreneur's distinctive signs, but on condition that any parasitic connections is excluded: the use of the patronymic reproducing an earlier distinctive sign is allowed only for the purpose of identifying the entrepreneur and therefore in a descriptive and informative way. Such descriptive use must, however, be excluded where there is a risk of confusion on the market, in light of the function concretely performed by the name in the commercial activity, aming to avoid the public being misled as to the identification of the producer and the origin of the goods.

Supreme Court, sec. I, decision of July 6, 2020, n. 13921

The Italian Supreme Court recognizes the Burberry Check as a famous trademark.

Laura Bussoli - Senior Counsel

With the recent judgement no. 576/2020, the Supreme Court has accepted the reasons of the English fashion house Burberry in the case for counterfeiting its - now we can say it - "famous" brand with an ornamental motif.

In the contested decision, the judges of the Court of Appeal of Rome had followed a "bizarre" argumentative procedure in order to exclude the appeal of the crime of infringement of the above mentioned trademark: and in fact, if on the one hand the appeal judge had established - unlike the judge of first instance - that it was not necessary for the purpose of infringing the penal rules on counterfeiting, that the words Burberry and the relative word mark were affixed on the Scottish motive, on the other hand he had denied the appeal of the crime of counterfeiting due to the unsuitability of the above mentioned figurative mark to create a univocal link with the English fashion house.

With this last judgment, the Supreme Court confirmed the decision of the Rome Court of Appeal in the part of the ruling that excludes the need to use the words "Burberry" on the fabric for counterfeiting purposes, considering that "trademark infringement also occurs in cases of partial reproduction of the trademark where it is likely to create confusion with the earlier registered trademark".

However, the Court then observed, in order to overturn the appeal decision, that this is particularly true in cases where the earlier mark is a well-known mark - i.e. when it is "known to a large part of the public and can be immediately recognized as relating to the goods and services for which the mark is used".

Therefore, there do not seem to be any doubts about the recognition of Burberry's reputation as an ornamental motif brand and its ability to distinguish and originate from the products on which it is affixed.

Despite the fact that the case therefore refers to a criminal offence (counterfeiting offence under Article 473 of the Penal Code) which protects public faith and does not concern the actual confusion of the public, this decision represents an important precedent for Burberry, as it openly recognizes the well-known character of the trademark and thus broadens its sphere of protection.

Can an anonymous work be protected as a trademark?

Gianpaolo Todisco

According to a recent decision of the EUIPO (Intellectual Property Office of the European Union) it would seem not to be the case: the rejection by the Office of the request for trademark cancellation made by the Full Color Black (manufacturer of greeting cards).

This all started when, in 2014, Banksy decided to register his famous work "The Flower Thrower" as a trademark with the European Union; it is a mural made in Jerusalem in 2005 and still wants to remember how wars and battles should be fought with the flower of hope and abandon violence. In accordance with his line of action characterized by irony, provocation and marketing strategies, the famous British writer has registered the work as a trademark to protect any products distinguished by the famous work.

Howeverthe British greeting card company Full Colour Black, sued by Banksy for counterfeiting, claimed that the trademark should be cancelled because it never intended to use it on any products. This was the argument used by Full Color Black's attorney to exonerate her from the 2018 copyright infringement charge. Well, with the decision of 14 September 2020 the EUIPO rejected the artist's request because, according to the Community Trademark Regulation, in order to claim its right on those images it is necessary to leave the anonymity.

To renounce anonymity, however, would damage the aura of mystery that surrounds him. Banksy has the opportunity to appeal within two months of the ruling, but the legal discipline on the matter makes it clear that the Writer risks losing the protectability of all other works if he chooses not to disclose himself.

Dior files for protection of the Saddle Bag as a Three-dimensional Trademark.

Gianpaolo Todisco - Partner

20 years after the launch of a now iconic model, Dior has applied to the Us Patent and Trademark Office for registration of the famous 'Saddle' bag as a three-dimensional trademark.

The Saddle bag has been re-introduced from the F/W 2018-19 collection with the addition of new details, prints and materials to the saddle bag accessory.

A three-dimensional mark is a sign consisting of the three-dimensional shape of a product or its appearance and is governed by a specific regulation, both at European and Italian level, which provides for the exclusion of registrability for signs that:

1. consist of the shape, or other characteristic, imposed by the very nature of the product;

2. the shape, or other characteristic, of the product necessary to obtain a technical result;

3. the shape, or other characteristic, which gives substantial value to the product.

   With regard to the first limitation, the rationale of this rule is to prevent a renewable right, potentially unlimited in time, such as a trade mark, from monopolising forms which derive from the natural form of the product, or which in any case are devoid of distinctive character because they coincide with a standard form in the opinion of consumers.

   With reference to the prohibition to register a functional form, the rationale of the standard is to protect the market by preventing a person from becoming the owner of a perpetual right on technical solutions or functional characteristics of a product which, on the contrary, can be protected through patents for inventions.

   Finally, as regards the limit on registering a substantial form, the rule is intended to prevent the registration of a form which, on its own, is capable of determining consumer choice. That characteristic, in fact, falls within the protection of patents for design rights which, unlike trade marks, is limited in time. On this point, Italian case law has ruled that a three-dimensional trademark can be registered if the shapes for which protection is sought have a functional or aesthetic value, such that they do not configure a particular character of ornament or utility.

   In one case, registration as a three-dimensional trademark was refused on the grounds that it was possible to perceive the aesthetic element as predominant, if not exclusive, and in any case with such prominence as to determine the consumer's choice. If Dior wanted to extend the protection of the three-dimensional mark, also at Community level, this third requirement will most likely be the most difficult obstacle to overcome for the French maison. Moreover, it is worth remembering that in two judgments in 2013, the General Court of the European Union denied Bottega Veneta the registration as a three-dimensional Community trademark of two different shapes of handbag, one characterized by the particular shape of the handles and the other by the absence of closing devices. In the present case, the judges considered that the shapes for which Bottega Veneta applied for registration did not fulfil the essential function of a trademark, that is, as an indicator of the origin of a product.