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In this article we will analyze the recent ruling of the Milan Court of Appeals (No. 1999/2023) on the validity of the trademark owned by Diesel depicting a stripe and the alleged counterfeiting and unfair competition by Calvin Klein:
Diesel SpA and Diesel Italia Srl sell casual clothing, including jeans that are distinguished by a cross label (called a “stripe”) positioned on the fifth anterolateral pocket. The stripe is a rectangle of fabric, lighter in color than the jeans, with the top and bottom sides proportionally very long compared to the height and positioned obliquely on the pocket.
Diesel says they have been using the stripe since the 1980s, so much so that it has become an identifying element of the brand. As such, in 2018, Diesel filed in Italy two trademark applications related to the stripe (also protected in the United States and Colombia, as well as in Europe in association with the word “Diesel”).
Registered trademark No. 302018000008172 Registered trademark No. 302018000010025
In 2017, Diesel found that Calvin Klein Inc. and CK Stores Italy Srl were using a very similar label, the only difference being that Calvin Klein’s was horizontal.
Diesel subsequently sued Calvin Klein for counterfeiting and unfair competition, though failing to persuade the trial judge. Hence, they proposed an appeal against this judgment.
In order to support its position, Calvin Klein sought a declaration that the opposing trademarks were invalid, as they were registered in bad faith and in any case lacked distinctiveness.
As a matter of fact, Calvin Klein argued that it was merely an ornamental element that was already widespread in the clothing industry and, in the case of Diesel, always accompanied by the denominative mark.
Calvin Klein further asserted that their stripe was distinguishable from Diesel’s by its horizontality, position near the top end of the pocket, and color similar to that of the pants, not in contrast to them, as well as by the presence of the “Calvin Klein” denominative mark.
The Court of Appeals, agreeing with what the Court of Milan held, found the de facto and registered signs owned by Diesel to be valid and eligible for protection.
As to the objection of invalidity of the trademark for alleged bad faith registration, the Court of Appeals mentioned that the registration of a trademark can be considered in bad faith when, at the time of filing the application, the applicant’s objective is to prevent the activity of competing enterprises rather than to protect his own, or seeks to take unfair advantage by appropriating signs already on the market. And this is not the case here.
Diesel has always used the stripe both independently and in combination with the denominative mark Diesel, and has not anticipated Calvin Klein in registering its label and then acting against it in order to remove the label from the market.
The sign registered by the plaintiffs takes the form of a position mark. The mark is distinctive because of the specific focus on the specific placement of the mark on the fifth front pocket of the jeans and the particular position of the strip of fabric on that pocket. The element of diagonality makes the label unusual, divergent from industry custom, and thus capable of creating a connection with the fashion house Diesel.
Finally, the Court of Appeals in its decision recalls that the burden of proof regarding the invalidity of a trademark falls on the party requesting its invalidity. In the present case, Calvin Klein did not meet that burden, as the documentary evidence provided by both parties demonstrated the distinctiveness that the Diesel stripe has achieved over the years.
Nevertheless, the Court of Appeals, upholding the decision of the Court of Milan in this case as well, and holding that the stripe was valid as a trademark, rejected the allegations of infringement and unfair competition filed by Diesel.
The lower court, after all, did not neglect any prominent features of the stripe, including its diagonal orientation, length, height, contrasting color with the trouser fabric, and its position in relation to the upper edge of the pocket. According to the Court, the diagonal orientation is the only real distinguishing feature of the Diesel stripe, which is absent from the Calvin Klein label.
The analysis of confusability between the marks is based on the perception of the average reasonably observant and shrewd consumer. The Calvin Klein label does not reproduce either the diagonal distinctive element or other salient features of the Diesel stripe. The Calvin Klein stripe is also always accompanied by the word element “Calvin Klein,” helping to reduce the likelihood of confusion. On top of that, it should be considered that jeans from the two fashion houses are sold in dedicated stores or in well-defined areas, making it almost impossible for consumers to confuse the two brands.
Similarly to the counterfeiting claim, the unfair competition claim was also found to be unsubstantiated. The competitive torts pleaded by Diesel overlapped with the allegations of trademark infringement, introducing no additional disvalue or injury. The alleged infringement was found to be invalid, so the unfair competition claim was also denied.