Fan clubs and idols’ IP, the Italian Supreme Court speaks

What if my 16-year-old cousin would be sued by teen idol Justin Bieber for reproducing his image and name on any horizontal surface she comes across? And how sad would this Kat be if Ms Ono would sue him for having used for years John's pictures and copyright aphorisms, often inappropriately (notoriously, the Lady is quite familiar with IP issues)? More or less, this is what happened to Ferrari Club Milano, an historic association of  Ferrari  supporters founded in 1977, which has been sued by the very same Ferrari for trade mark infringement.

After having been authorised to use the Ferrari’s trade marks to carry out non-profitable activities for almost ten years, from 1986 the Club used the de facto trade mark "Ferrari Club Milano" although not being part of the official Ferrari Club network approved by Ferrari (and leaded by the Ferrari Club Italia). Hence, in 1998 Ferrari started proceedings against the Club before the Court of Milan, also claiming the infringement of the "Ferrari" and "Ferrari Club" word marks. Among other things, the Club asked the dismissal of Ferrari’s claims on the basis of (i) Ferrari's tolerance of “Ferrari Club Milano” from 1986 to 1998 and of (ii) the non-profitable use of such sign, which could not have been considered "in the course of economic activity" (the words used by Italian trade mark law for defining the use "in the course of trade" that the right holder is entitled to prevent on the basis of a trade mark right).

In 2003 and 2006, the Milan District Court and Court of Appeal both acknowledged the Club's arguments and dismissed Ferrari's claims, mainly on the basis of Ferrari's alleged acquiescence in the Club's use of its de facto trade mark.

Whilst Italian trade mark law (as well as Article 54 of the CTM Regulation) provides that acquiescence can only take place towards "registered" trade marks, the Milan Courts applied tolerance by analogy to the de facto trade mark used by the Club. According to those Courts, this would have been consistent with some major principles of the system and, in particular, with those that legalise long-standing factual situations, thus penalising right holders' passivity and reducing legal uncertainty. Further, the District and the Appeal Court of Milan stated that the Club's use of the contested sign, not being carried out for lucrative purposes, could not be considered "in the course of economic activity" and would therefore fall outside the scope of trade mark protection.

 

In its decision of late 2013 (decision No. 26498/2013 of 27 November 2013, published on 20 December 2013), the Italian Supreme Court took a different view.

As to acquiescence, the Supreme Court established that Italian Trade Mark Law is "absolutely clear and unequivocal" in stating that right holder of an earlier trade mark is no longer entitled to oppose the use of a later trade mark only as far as he or she has acquiesced for a five-year period in the use of a “registered” trade mark. This provision, the Supreme Court continues, shall be considered as an exception to the intellectual property regime and is not eligible to be extended by analogy to de facto trade marks. According to the Supreme Court, this approach is confirmed by the CJEU decision in the Budweiser case (Budějovický Budvar v Anheuser-Busch, case C-482/09), where the Court laid down that "the prerequisite for the running of [the period of limitation in consequence of acquiescence is], first, registration of the later trade mark in the Member State concerned". Hence, no tolerance could have been occurred vis-à-vis the de facto trade mark used by the Club.



A baffled member of the Ferrari Club Milano considers starting to support McLaren

As to the possibility to enforce trade marks against a non-profitable fan club, the Supreme Court considered that Italian and European trade mark law, respectively granting right holders the power to prevent third parties' uses of their trade marks "in the course of economic activity" and "in the course of trade", do not intend to limit the scope of protection of trade marks solely to uses carried out for lucrative purposes or by entrepreneurial companies. On the contrary, the Court held, in light of CJEU's case-law (in cases C-236/08, C-62/08 and C-533/06), all uses "not limited to a private dimension" that are anyhow "addressed to the market" are potentially preventable on the basis of a trade mark right. In light of this, under trade mark law the Club's activity consisting in systematically and continuously collecting membership fees for the organisation of public events was to be considered an "economic activity" similar to entrepreneurial ones.

For obscure reasons, the Supreme Court decided not to face the issue of whether the sign "Ferrari Club Milano" infringed Ferrari's trade mark rights and preferred to remit the case to the Court of Appeal of Milan for another assessment on this point.

In the first two instance decisions, the District and Appeal Courts of Milan also acknowledged that the use of the "Ferrari" and "Ferrari Club" trade marks by the Club was atypical, non-distinctive of Ferrari S.p.A. and only eligible to communicate to the relevant public the existence of an association of people supporting Ferrari. Hence, they concluded, "Ferrari Club Milano" could peacefully coexist on the market with the official network of Ferrari Club Italia without prejudice to the plaintiff.  

Should the Court of Appeal now take a different view, it could be the beginning of the end for unofficial fan clubs of famous trade marks (the IPKat has also got one!) [and what about the role of enthusiastic fans itself, Merpel adds: will all amateur supporters need to become licensees of their idols?].