Court of Milan upholds counterfeiting allegations against Zara

The Court of Milan has upheld counterfeiting allegations against fashion brand Zara, in a decision which confirmed that damages for registered and unregistered designs may be claimed in an EU jurisdiction other than the main defendant’s home state.

Presiding Judge Claudio Marangoni delivered the decision on January 25 and it was communicated to the parties on May 15. Dentons, which represented Italian company OTB in the matter, shared the decision on June 28.

OTB Group is the owner of many fashion brands, including Diesel and Marni. Its lawsuit against Spanish company Inditex Group, owner of Zara, alleged that certain Zara products were counterfeit versions of Diesel’s jeans and Marni’s footwear.

Zara violated the registered Community design (RCD) of the ‘Skinzee-sp’ jeans, manufactured and sold by Diesel, and the unregistered Community design of Marni’s ‘Fussbett’ footwear, according to OTB.

Dentons said the lawsuit commenced in November 2015.

OTB sought injunctive relief and requested at least €50,000 ($58,197) in damages. OTB said that the compensation award should include damages caused in Italy and throughout the EU in order to have “cross-border effect within the EU”.

In response, Inditex said that the Court of Milan lacked jurisdiction over it as a Spanish company and asked that OTB be ordered to reimburse its expenses.

Inditex claimed there were “objective and material differences” between the ‘Fussbett’ footwear and Zara’s accused product. It also argued that Diesel’s ‘Skinzee-sp’ design (number 002649491-001) is invalid, as it lacked individuality.

Marangoni rejected Inditex’s arguments.

First, he said that Zara’s footwear product features “all the characteristic elements” of the ‘Fussbett’ design in such a way that the two products “cannot be distinguished”.

Second, Marangoni noted that the fashion industry has “crowds of products with similar characteristics” and, as such, “even slight differences” are sufficient to give rise to exclusive design rights. He rejected Inditex’s argument that the RCD should be invalidated.

He went on to determine that Zara’s jeans product “reproduces the overall impression” of Diesel’s ‘Skinzee-sp’ design.

Marangoni confirmed OTB’s allegations of counterfeiting and prohibited Zara from producing, marketing, or selling the infringing jeans product. The products should be recalled from the market, he said, and a penalty of €200 will apply for each product marketed in violation of the injunction.

The prohibition could not apply to the infringing footwear, as Marni’s unregistered ‘Fussbett’ design expired in 2017.

Marangoni declared that a court in one EU jurisdiction can issue an order which covers the conduct of the defendant in another EU member state (as per the Court of Justice of the European Union’s decision last year in Nintendo v BigBen).

According to Dentons, this is the first decision in Europe which confirms the possibility to claim EU-wide damages for registered and unregistered designs in a jurisdiction (in this case, Italy) other than the main defendant’s jurisdiction (Spain).

Although the ruling is still subject to appeal, it “launches new options for the enforcement of IP rights within the EU”, Dentons said.