The Hermès Effect
Hermès 3D trademark saga in Italy might have come to an end following the Italian Supreme Court (Court) decision issued on 17 October 2022, No 30455.
The trial saga started way back in 2009 before the Court of Florence, when Hermès International S.c.p.a. and Hermès Italie S.p.A. (jointly, Hermès), sued Buti Amerigo & C s.a.s., Buti Srl, and Buti Italia Srl (jointly, Buti) for unfair competition and for IP infringements due to the production and the marketing of counterfeit Kelly and Birkin handbags, in violation of EU TMs 2083327 and 4467247; as well as Italian TMs 1003725; 1003726; 1003725, and 1003726 (jointly, the Trademarks).
Buti counterclaimed by asking the Court to find the invalidity of the Trademarks on the following grounds:
(i) non-existence of the sign for being intrinsic to the product;
(ii) existence of a shape imposed by the nature of the product or which confers on the product even substantial value; and
(iii) in relation to the bag closing system, technical result, or lack of novelty and distinctiveness.
The Court specified that in order to evaluate the validity of a trademark an assessment is necessary under Article 9 of the Italian Code of Industrial Property (ICIP) and Article 7 of (former and applicable back in 2009) CE Regulation No 207/2009 (Regulation). Therefore, taking into account the above-mentioned provisions, the Court highlighted the following:
- As for point (i), when the shape requirement is imposed by the very nature of the product, the criterion reference cannot be that of the bag itself notoriously having a plurality of variants, in terms of size, geometric shape, number, length, and location of handles etc.;
- As for point (ii), when the shape gives a substantial value to the product, such substantial value has to be found in every element suitable for the commercial success of the product, not least in those elements of an aesthetic nature or in any case elements having individualizing traits different from the ordinary which in the present case do not subsist, given that the Kelly and Birkin handbags, as a whole, respect the canonical parameters of handbags normally on the market; and
- As for point (iii), in relation to the shape of the product necessary to obtain a technical result, it should be noted that the closure system constitutes only one of the components of the product.
Hence, the Court stressed the importance of the distinctive character for the shape in order to be considered as a trademark, being understood that jointly with the distinctive character is also coessential the evidence of significant use of the trademark in such a way that the diffusion of the shape engenders in the opinion of those who are or could be or would aspire to be the purchasers of the product, the conviction of the traceability of the product to a certain origin. Therefore, the mere circumstance of the registration of the shape mark does not presume the existence of its distinctive character.
The Court, on the basis of the above observations, has identified the elements that allow to prove the distinctive character. In such respect, it stressed that such criteria cannot be of a perceptive nature and most of all the related evidences cannot originate from the same subject that marketed the concerned product. As a consequence, elements such as investments of an advertising nature do not satisfy the said purposes. In such regard, instead, according to the Court, such purpose could be satisfied by submitting opinion polls, as long as certain requirements are met. More precisely, the demographic sample can neither be excessively restricted nor excessively broad as it should include not indiscriminately every person but only those who would either be in a position to purchase such products or would aspire to do so by paying attention not to use selective criteria that might be considered as having a discriminatory nature on the basis of the gender, cultural level, geographical origin, etc.
Since the plaintiff did not provide this kind of evidence, the requirement necessary for considering a shape as a trademark has not been proved. As a result, Buti’s request of the trademarks invalidity has been granted by the Court of Florence.
The Court of Appeal of Florence, back in 2018, confirmed the first instance decision, therefore, Hermès appealed the second instance decision before the Italian Supreme Court on four legal grounds, such as:
- the invalidity of the proceedings because of the failure to rule on the request for an adjournment of the same, which Hermès had made at first instance in order to allow the production of a survey for responding to the defense’s remarks made only in the opposing statement of defense, concerning the lack of distinctiveness of the trademarks;
- the erroneous and false application of Article 9(a) and (d) of Community Trademark Regulation No 1001/2017 (formerly No 207 of 2009) and Article 13 of the ICIP, in so far as the judgment under appeal declared the invalidity of the trademark the validity of which had become res judicata by virtue of its registration with the EUIPO (European Union Intellectual Property Office), and in so far as it unreasonably held that the Hermès shape mark lacked distinctive character and that the secondary meaning test was the only mean by which the trademark acquired that character;
- misapplication of Article 121 of the ICIP and Article 99 of the Regulation, in holding that the burden of proof of the distinctiveness of the shape of the handbags rested on the trademark owner reversing the burden of proof according to which the nullity of the trademark must be proved by the third party and not by the trademark owner; and
- infringement and misapplication of Article 2598(1) of the Italian Civil Code, in that the territorial Courts held that protection for unfair competition was impracticable in the absence of protection of the shape as a trademark.
The Italian Supreme Court, in relation to the burden of proof of the distinctive character of the Trademarks, has specified that the reasoning of the territorial Courts was not correct since the improper reversal of the burden of proof leads to the misapplication of Article 121 of the ICIP, being the positive evidence of nullity the responsibility of the party challenging the title and, therefore, in the case at stake on Buti companies.
As for the distinctive character of a registered trademark, the Supreme Court recalled the general principle according to which a three-dimensional shape of a product cannot be registered as a trademark, since it is not suitable in itself to identify the producer, unless there is an explicit link connecting the product to its origin (for instance, by affixing the name or a sign referable to the producer). The ICIP excludes the registration as trademarks of
“signs consisting exclusively of the shape imposed by the very nature of the product” and “of the shape that gives substantial value to the product”
(Article 9 ICIP)
while also allowing the registration as trademarks of
“the shape of the product or its packaging […] provided that they are capable of distinguishing the products or services of one undertaking from those of other undertakings”.
(Article 7 ICIP)
The test of the mark’s distinctiveness is therefore central as also highlighted by the EU Court of Justice that, in the case C-468-472/01, stated that
“only a trade mark which departs significantly from the norm or customs of the sector and thereby fulfils its essential function of indicating origin, is not devoid of any distinctive character for the purposes of that provision […]”.
Basically, consumers shall easily detect the “significant manner” in which the shape deviates from the usual shape of the product since the “since the decisive criterion is the ability of that shape to fulfil the function of indicating commercial origin” (EU Tribunal 2020, T-573/18).
As for the opinion pools, the Italian Supreme Court has stressed that they can also be produced ex officio by means of an expert witness’s report, as per Article 121, paragraph 5, of the ICIP and, therefore, not solely by the plaintiff, disregarding, in such respect, the territorial Courts decisions. Indeed, such Courts also failed in duly examining the extensive documentation filed by the plaintiff to demonstrate the fame achieved by the (luxury) products. On the other hand, the possibility of registering as a trademark also “the shape of the product or its packaging, the color combinations or shades” when having distinctive capacity (Article 7 ICIP), can also take place through advertising investments thanks to which the general public can link the shape of the product to its producer, allowing the product/trademark to acquire (through secondary meaning) the distinctive capacity originally lacking.
On the grounds of the above considerations, the Italian Supreme Court, in relation to the third plea, which has been upheld, set aside, and remitted to the Court of Appeal the appealed decision.
As general observations it should be noted that the Italian Supreme Court’s decision sets an interesting precedent in favor of Hermès since it pointed out specific legal principles such as the confirmation that (I) the secondary meaning has to be proved also through advertisement documents; press articles also written at international level written by journalists experts in the fashion field; film references, and quotes; therefore, (II) pools are not the only burden of proof to be used; and (III) the lack of distinctive character has to be duly explained.
Finally, it should be noted that with a certain frequency the Supreme Court recalled EU case law, showing the intention to have, in relation to shape marks, an approach as much harmonized as possible in a true EU spirit. Therefore, apparently, mentioning in IP proceedings deeds more EU case law might be a wise choice.
Has Hermès finally found some peace in defending its Kelly and Birkin trademarks, at least, in Italy? We shall find out sooner rather than later—after all, sequels to long running sagas is not limited to galaxies far, far away.