What New in the EU: Versace rip-off loses trademark

The Israeli Intellectual Property Adjudicator ordered the removal from the register of five registrations relating to the trademark of Versace.

eu flag biz 88 (photo credit:)
eu flag biz 88
(photo credit: )
On Sunday, the Israeli Intellectual Property Adjudicator Noah Shalev Shlomovitz ordered the removal from the register of five registrations relating to the trademark of Versace in various forms including Hebrew versions of the mark. The registrations, belonging to the Versace 83 company, were almost 20 years old. The Israeli owner of Versace 83, Tzadik Pur Bros. obtained the registrations at the time after the well-known Italian fashion house Gianni Versace S.p.A. withdrew its opposition. Since 2000, following the expansion of the Israeli "VERSACE" chain and the opening of many branches in prime locations, Gianni Versace S.p.A. took various actions in order to stop the commercial use of the mark and cancel the registrations obtained at the time by the Israeli company. According to Versace lawyer Zvi Chowers, the misuse of the Versace label was used to "confuse consumers regarding the source of their products, which were sold at the stores operated by them." Shlomovitz applied the provision of the Israeli Trade Marks Ordinance which states that "application for removal of a trademark on the grounds that the application for registration of the mark was filed in bad faith may be filed at any time" and held that it is also applicable regarding registrations obtained more than five years before the amendment was introduced and thus rejected the owners argument that the application should be rejected on grounds of limitation. It has been further held that even if such an argument would have been accepted, the registrations would have been removed on grounds of fraud according to existing precedents. The owner's res judicata argument in view of the withdrawal of the oppositions at the time has also been rejected and so was its "waiver" argument. Shlomovitz concluded that the owner of the removed registrations chose the marks in bad faith and with the intent to look like the Italian company, and that it used the marks in a manner that misled the public. Accordingly, it was held that the owner's bad faith prevented it from finding shelter under limitation arguments, and that in any event the Italian company is entitled to prevent others from using its name as well as its founder's name. In light of this groundbreaking decision, here is a refresher on trademark law as it applies in the European Union. A trademark is any sign which serves in business to distinguish the goods and services of one undertaking from those of other undertakings and over which the owner has an exclusive right. The trademark of a product or service can be synonymous with the branding and image of a company and can become an asset with monetary value. The difference between a design and a trademark is in the essential function that they perform. A design is essentially intended to determine the shape of a product (mostly, to decorate a product). A trademark is also applied to the product. The main function of a trademark is to identify a particular trade origin in connection with specific goods and services. In the European Union, trademarks are protected by the Community Trade Mark (CTM). The CTM system consists of one single registration procedure which grants to its owner an exclusive right in the 27 Member States of the European Union. Business enterprises are free to file national trademark applications, a CTM application, or both. It is entirely up to applicants and proprietors of trademarks whether they want to rely exclusively, or in addition to national trademark rights, on the CTM protection. However, earlier national trademarks constitute earlier rights against a CTM, and vice versa. The Trade Mark Office does not examine such earlier rights; only the proprietor of the earlier right can raise this issue, either by filing an opposition within 3 months of the publication of the CTM application, or following the registration of the CTM by filing an application for a declaration of invalidity on relative grounds. A CTM is obtained by registration. However, the CTM application entitles the applicant to file oppositions against subsequent trademark applications which may be identical or similar to his trademark for identical or related goods and services. A CTM application may be transferred, subject to rights in rem, levied in execution, involved in insolvency proceedings and licensed, among other possibilities. syrquin@013.net The author is the head of the International Department at GSCB Law Firm