The forfeiture of the trademark due to supervening reception

In the previous article “The distinctive capacity of the trademark and the exploitation of the “secondary meaning”, we analyzed the characteristics that a sign must possess in order to be registered as a trademark, as well as the requirements that determine the difference between a strong and a weak trademark.

In this article, we will analyze a case law concerning one of the circumstances that may lead to the forfeiture of a trademark and how the Court of Cassation recently formulated an important principle of law in relation to the rule provided for by art. 14 of the Industrial Property Code.

The legislation

The aforementioned provision provides:

• in the first paragraph, lett. b), that “the signs capable of deceiving the public, in particular on the geographical origin, on the nature or quality of the products or services, or on the type of trademark, cannot be registered as a trademark”;
• in the second paragraph, lett. a), that the trademark lapses “if it has become capable of misleading the public, in particular regarding the nature, quality or origin of the products or services, due to the manner and context in which it is used by the owner or with your consent, for the products or services for which it is registered“.

The forfeiture, therefore, occurs when the trademark, which initially possessed (and maintained for a certain period of time) all the requisites required by law to be registered and used as such, deceives the public regarding the quality, nature o the origin of the products / services associated with it.

We recall, in fact, that a sign, to be registered as a trademark, must have (among other requirements) distinctive character: it must be perceived by the consumer public as an instrument for identifying the commercial origin of the products or services for which it is itself has been registered, and to distinguish them from those of competitors.

If, during the period of use/exploitation of the trademark, the latter deceives consumers about the quality/origin of the products or services that the public identifies and associates with it, the law intervenes to protect consumers, providing for the forfeiture. of the trademark, the extinction of the same and the consequent cancellation from the relative register.

The story

In the case under analysis, the Court of Cassation was called upon to rule on the appeal brought by the well-known designer Alviero Martini against the decision of the Milan Court of Appeal which had deemed the designer’s request to declare the non-compliance unfounded, by Alviero Martini S.p.a., of a settlement agreement between the parties to regulate the use of the patronymic trademark “Alviero Martini”, sold by the designer to the aforementioned company at the same time as its release.

According to Alviero Martini:

1. his former company had not respected the agreement, which provided for the publication of the news of the designer’s exit from Alviero Martini S.p.a. and its total extraneousness to it and to the products it markets;
2. the Court of Appeal, moreover, should have declared the forfeiture of the trademarks of the company that include the surname “Alviero Martini” and the other trademarks (eg: “Prima Classe”), due to supervening deceit and, for the effect, inhibit its use to Alviero Martini S.p.A .

The reasons of the Supreme Court

With ordinance no. 20269 of 23 June 2022, the Supreme Court rejected the appeal proposed by the designer, stating, with regard to the points:

1) (failure to comply with the settlement agreement)

that clause no. 25 of the settlement deed left both parties free “to publish, through any means of dissemination“, the news of the transfer of the relations between the parties, without determining “in an analytical way” the content or timing of such communication, but providing only borne by Alviero Martini S.p.A. the obligation to communicate the aforementioned transfer also on the home page of its website.

Therefore, the Court of Appeal, ascertaining that the aforementioned news had been published both on the company’s website and in well-known newspapers and magazines – in order to reach a very wide audience – had correctly rejected the designer’s requests.

2) (forfeiture of the company’s patronymic marks due to supervening deception)

that the Court of Appeal of Milan had ascertained that the stylist had not demonstrated the existence of an actual deception regarding the qualitative characteristics of the products marked by the same mark.

Furthermore, according to the Court, the fact that consumers, following the sale of the brands by the designer to the company and the exit of the first from the second, could “(physiologically) link the articles of the company to Alviero Martini”, did not represent per se, a deceptive phenomenon, pursuant to art. 14, c.p.i., paragraph 2)”.

In fact, even if “behind” the creation/quality of the products or services connected to the brand there is no longer the contribution of the stylist, it does not in itself constitute a deception for consumers, if it is ascertained that the characteristics and quality of those products/services continue to be guaranteed by the current owner of the trademark.

In this case, the Milan Court of Appeal, on the one hand, had ascertained that the settlement agreement did not provide for any obligation to maintain quality or the right, on the part of Alviero Martini, to carry out an ongoing control on the quality of the products. On the other hand, he had ruled out that, following the designer’s exit from the company, there had been a deterioration in the quality of the products, such as to determine the deceptive occurrence and the consequent decay of the brands.

The principle of law

Finally, the Court of Cassation enunciated the principle of law, according to which

“On the subject of the transfer of the patronymic trademark, art. 14, paragraph 2, lett. a), of the Italian Criminal Code, in providing for the general forfeiture of the trademark that has become capable of misleading the public about the quality or origin of the products, not simply implies that the possibility of a worsening whatever worsening of the quality levels of the distinguished products is established, but that an etiological relationship with the way and with the context in which the trademark is used by the new owner is ascertained; the ascertainment of these profiles – the manner and the context -, and of the etiological relationship itself, is a matter of fact, and the relative judgment, if duly motivated, remains removed from the review of legitimacy “.

According to the Court, therefore, a worsening of the quality of the products or services related to the trademark is not sufficient to determine the public’s deceit regarding the origin or quality of the same and the consequent forfeiture of the trademark.

Rather, it is necessary to ascertain the relationship between the (alleged) deterioration in the quality / origin of the products and the methods (and the context) in which the trademark is used by the new owner (in this case, Alviero Martini S.p.A.).

Once this relationship has been ascertained and the consequences on the market and consumers have been assessed, it will be possible to ascertain the existence of an actual misleading trademark and assess its forfeiture.

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