Choosing a Web domain can prove complicated: the “Stock” case

A recent court case has once again raised the spotlight on the importance of verifications before registering and using trademarks and domain names, especially because of the risks posed by the “possible renown” of earlier trademarks such as “Stock.”

The case: "Stock" versus "stock.it"

The Court of Appeals of Rome recently saw a company active in the advertising concession sector that had registered the domain “stock.it” and, on the other hand, Stock Srl i.e., the famous company owner of the “Stock 84” trademark, facing off.

The case dealt with by the Court is an emblematic example of how the rushed choice of a domain name can raise complex legal issues. The focus in this litigation lies precisely in the relationship that exists between trademark law, especially well-known trademarks, and domain names.

Stock Srl is the owner of the well-known trademark “Stock”, a famous golden-colored brandy, which conflicted with another company that had decided to register the domain “stock.it” to host a website intended for the sale of stock and clothing items.

The concessionaire argued the as much the diffusion of the term “stock” as its legitimate exploitation as a domain name for a site dedicated specifically to the stock of goods.

Stock Srl, on the other hand, reasserted its rights to the sign, arguing that the second company’s use of the name “stock” and the domain name “stock.it” could still create confusion for the public, take unfair advantage of the “Stock” trademark’s reputation, and undermine its distinctiveness. The detailed analysis of the decision on the “Stock” case, whether one agrees with it or not, offers interesting insights into how important it is to carefully consider the legal implications when choosing a trademark or domain name for a Web site.

What the Italian law says about renowned trademarks and their relationship with web domains

In domain name registration, the “first come, first served” principle applies. However, when trademarks come into play, the issue becomes more complicated. The “stock.it” case is a prime example precisely because it highlights the importance of a thoughtful choice of domain name, especially when there are identical or similar prior renowned trademarks.

The owner of a registered trademark may indeed challenge the improper use of a subsequent domain name, especially if it is associated with Web sites that refer to the presentation or sale of products potentially interfering with those of the registered trademark owner.

This is where Articles 20 and 22 of the Italian Industrial Property Code (“IPC”) come in. Letter c of Article 20 of the IPC protects so-called “well-known trademarks”. It provides that if a trademark is well known or even famous, no one else may use an identical or similar sign for any kind of product or service, even if it is not similar or related to that of the original trademark.

This provision is meant to protect the integrity, reputation and investment incurred by trademark owners, especially if they are renowned.

Similarly, the principle of “unity of distinctive signs” in Article 22 IPC imposes restrictions on the use of distinctive signs such as firms, insignia, etc., prohibiting any use that leads to a likelihood of confusion on the part of the public or undue association between signs. This also applies to domain names, and the second paragraph of Article 22 reiterates the enhanced protection for well-known trademarks. The aim is to prevent risks of confusion for the public and to prevent other entrepreneurs from taking unfair advantage of the distinctive character or reputation of the original mark.

Indeed, it is precisely the complexity of the legislation in its practical application that requires relying on specialized counsel to circumvent the pitfalls of this complicated area of law.

Rome appeals court's decision on "Stock" trademark

In the history of the liquor trade, few brands echo in the minds of consumers like “Stock”, a brand known for a wide range of liquors, and in particular for the famous brandy “Stock 84”. This unwavering association was recently upheld by the Rome Court of Appeals in its April 12, 2023 decision.

The decision of the Rome Court of Appeals rejected the argument that the “Stock” trademark was no longer renowned due to the lack of recent promotional activities and the perception of the sign as an English-speaking term that has now entered the common usage of the Italian language to indicate a certain quantity of goods in stock (in stock, precisely).

Thanks to the documentation produced, the Court recognized the historical importance and evolution of the “Stock” mark. The Court also emphasized the active management of the trademark by the owner company, which has managed to keep the mark attractive to both an upscale audience and, more importantly, a more pop consumer segment.

Essentially, the Rome Court of Appeals ruling reiterated the notion that the dissemination of a word to the public (stock = stock) does not automatically nullify its distinctiveness or renown as a trademark.

The “Stock” case teaches several things. First of all, it highlights the importance of a careful choice of domain name and trademark. Second, it reminds us of the importance of laws and court guidelines in a rather complex area of law. It finally reminds us that even if a renowned trademark matches a commonly used term, this does not necessarily eliminate its distinctiveness and, for that matter, its consistent protectability.