By Elena Varese and Lara Mastrangelo
The Milan Fashion Week has just started and from today we are glad to host some highlights on the major fashion law trends of this season. Today we start with the analysis of the legal fake phenomenon.
New York, 1994. James Jebbia, a young American-British guy, after few experiences in the retail sector, invested $12,000 to open a small clothes shop in downtown Manhattan. At the time, the lower east side of the city was still grungy and New York was the place where a new upcoming youth culture, made of skaters, graffiti writers and street kids, was taking centre stage. Jebbia understood such a subculture and set up a shop, dedicated to brands and styles liked by street skaters. The shop was named after the 1964 John Coltrane’s album “A Love Supreme”, and over time Supreme became one of the most hyped brands of all times. Its model is artificial scarcity: it releases just few products at a time, it has just few locations worldwide (none of which in Italy!).
If so, why just two years ago finding Supreme garments in Italian shops was actually quite easy? If the rise of Supreme is a fascinating story, the rise of legal fakes in the fashion industry is a likewise interesting phenomenon.
Over the last decade, in fact, the fashion world witnessed the rise of a new kind of knockoffs: the so-called “legal fakes”. In practice, a certain company precedes the original brand in the registration of the trademark in a country where it has not been launched or registered yet. Afterwards, such company “legally” appropriates marks and begins mass producing counterfeit products.
The most famous example is what happened in Italy, namely Barletta (Puglia), just few years ago. An Italian clothing company, Trade Direct S.r.l., started to manufacture and sell t-shirts and other garments branded Supreme Italia, caring a logo which was almost identical to the original one, although a little bigger. If at the beginning they were able to fool only a small group of Italian consumers, later on Trade Direct begun to promote its products even at the Pitti Uomo Fair and online on supremeitalia.com.
At that point, Chapter 4 Corp., a US company, owner of the real Supreme NY brand, decided to take legal action. In the first place, it sued Trade Direct and some shops where the counterfeits were sold. It won the preliminary proceeding (getting a preliminary injunction) in 2017 on the ground that “the unlawfulness of the conduct of TRADE DIRECT exists prima facie, both with regard to the case of trademark infringement referred to in Article 20 lett. A of the Italian Intellectual Property Code, and with regard to the autonomous and different case of unfair parasitic competition referred to in Article 2598 n. 3 of the Italian Civil Code”. In fact, Chapter 4 Corp. filed an Italian trademark application on 9 October 2015, and, therefore earlier than the other side’s trademark application, filed on 18 November 2015. Trade Direct argued that the word “Supreme” was descriptive and lacking distinctiveness, but the vast dossier filed by Chapter 4 Corp. showed that the brand was absolutely distinctive among young generations, not only in the US, but also in the Italian territory. Parasitism has been proved not only because of the use of the latter’s distinctive sign for the same type of product, but also because of the identity in the products’ decorative elements, advertising images and methods of advertising promotion.
Even after such ruling, International Brand Firm (IBF), i.e. Supreme Italia’s holding company (which was not part of the first proceeding), kept selling and distributing counterfeits. Therefore, Chapter 4 Corp. started several preliminary proceeding against Trade Direct and IBF (the last one was decided in August 2019) and also a main proceeding on the merits in order to obtain a declaration of nullity of counterparty’s trademarks, an injunction and an order to withdraw the products from the market.
In sum, the judicial procedure was not easy and the Court of Milan was not persuaded by the apparent “legality” of such fakes and sided with the original brand.
The Supreme case was not the first time when an Italian company took advantage of the popularity of a brand, whose trademark was not registered in Italy. The first to be copied, in 2013, was the Boy London streetwear brand, followed by Virgil Abloh’s Pyrex Vision, Supreme, Kith and Thrasher, all registered in Italy with slightly different names, such as Pyrex Original, Boy London Italia and Kith Official.
To say it in a nutshell: are copycats really becoming – under certain circumstances – legal? The strict approach of the Court of Milan seems to suggest that the answer is definitely no, at least in Italy.
But if this might be the end of the story in Italy, consider that IBF has regularly registered its “Supreme” trademarks in 54 countries and even opened some flagship stores. The biggest one, opened in 2019 and based in Shanghai will probably foster the entry of Supreme Barletta in the whole Asian market.
In light of the above, one might thus asks are legal fakes a new fashion trend or just infringers’ last crafty trick? It seems that the second option is the preferred one by Italian courts. Moreover, the same approach is confirmed by Article 6-bis, paragraph 1 of the Paris Convention, which can be revamped also to encompass the phenomenon of legal fakes. According to such provision: “The countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods”.
If you want to know more about this topic and trademark law in general, please contact elena.varese@dlapiper.com and lara.mastrangelo@dlapiper.com.