Top 3 Legal Predictions on Fashion Law for 2020

By Elena Varese and Valentina Mazza

As “fashion shades and only style remains“, here you have our (hopefully stylish) guess on the top three fashion trends for this year.

  1. Italian copyright protection: does the Cofemel decision mark the end of “artistic value”?

On 12 September 2019, the CJEU issued the long-awaited decision on the Cofemel case C-683/17, which opened a new path for the copyright protection of designs in the EU and in Italy. The lawsuit was brought by G-Star, that accused Cofemel of copying its designs related to jeans, sweatshirts and t-shirts products, claiming that its models constituted original intellectual creations qualified as “works” and protected under Portuguese Copyright Law.

The case was brought to the CJEU by the Portuguese Supreme Court. In the course of the national dispute between the parties on the copyrightability of the allegedly infringed products, the Portuguese Supreme Court asked the CJEU, by means of a preliminary ruling, to clarify the interpretation of Article 2(a) of the InfoSoc Directive. In particular, the key question directed to the CJEU was whether EU law Article 2(a) of the InfoSoc Directive prevents Member States from granting copyright protection to designs subject to requirements other than originality, e.g. the “aesthetic effect” required by Portuguese Copyright law.

The CJEU analyzed the case by explaining the concept of “work” under EU law, ruling that such qualification requires the combination of two cumulative elements.

First of all, this notion implies that an original object is at hand, meaning it derives from an intellectual creation which can only be related to its author, reflecting its personality. Therefore, if the exercise of creative freedom is not remarkable in the creation of an object, being the creation only determined by technical constraints or rules, then the creation in question lacks the originality requirement (following Infopaq International, C-5/08)

In addition, the CJEU highlighted that the notion of “work” necessarily implies the existence of an object that can be identifiable with sufficient precision and objectivity, i.e. it must be fixed, also confirming the findings of its previous Levola Hengelo judgment, C-310/17.

The CJEU noted that the “aesthetic effect” that can be produced by a model is the result, among other things, of the subjective sensation of beauty felt by each person who looks at it. It recognized that this subjective effect itself is not able to determine the existence of an identifiable object with sufficient precision and objectivity and, therefore, the “aesthetic effect” does not meet the requirements needed for the object to be considered as a “work” under EU law.

In light of the above, the CJEU finally ruled that Article 2(a) of the InfoSoc Directive must be interpreted as precluding national legislation from conferring copyright protection on models such as the clothing models involved in the case at stake, on the ground that they generate a visual effect of their own which is significant only from an aesthetic perspective. Moreover, it held that any national provision granting copyright protection to designs subject to requirements other than originality (e.g., Italian “artistic value”, or Portuguese “aesthetic effect”, as in the present case) is not compliant with EU law.

Looking at the Italian legal systems, this would also suggest that the “artistic value” requirement provided by Article 2, No. 10 of the Italian Copyright Law in addition to originality for a design to access copyright protection in Italy does not comply with Article 2(a) of the InfoSoc Directive.

Nevertheless, it is vital to acknowledge that EU directives do not impose direct obligations upon individuals, since they do not have the so called horizontal effect. In light of this, the interpretation of a directive given in a preliminary ruling judgement of the CJEU is not enforceable in a dispute against private parties, but only in a dispute which involves at least one Member State as a party.

Therefore, through the Cofemel decision, the CJEU keeps moving forward towards the concession of a more easily accessible copyright protection. That being said, the enactment of a new national law which removes the requirement of the “artistic value” to access copyright protection under Italian law is needed for Italy to finally clarify the issue.

We expect the Italian legislator to take the stage and bring Italian copyright law back to fashion soon. Meanwhile, Italian courts should follow the trend set by the CJEU by making it easier for fashion items to benefit from a lower threshold for copyright protection as well.

  1. Image rights: don’t mess up with celebrities’ right of publicity!

Another prestigious brand sued by a celebrity (or his family) for using his name without asking for the authorization! For example, in the United States, Humphrey Bogart’s heirs sued Burberry for using an image of the actor wearing the iconic trench in the movie Casablanca on its website and Steve McQueen’s family sued Ferrari before the Superior Court of Los Angeles for using the name “McQueen” on a model made to celebrate the 70th anniversary of the brand.

More recently, in Italy, the case brought by legendary football player Diego Armando Maradona against the fashion brand Dolce & Gabbana for using his name on a t-shirt worn by a model during a fashion show held in Naples a few years ago. In particular, the t-shirt carried the number “10”, i.e. Maradona’s number while he was playing at Napoli, and had the same blue and white color combination as Napoli’s soccer team jerseys. However, Dolce & Gabbana created it to celebrate some of the symbols of the city of Naples and the t-shirt was never put on the market for sale.

Nevertheless, the Court of Milan ruled that “the use of a decorative element that reproduces a celebrity’s distinctive sign or name, determines at least an association with the celebrity. If it is a famous sign, also and above all in the non-commercial field, which conveys, like the one at stake, particular suggestions of historical charm and football excellence, it cannot be freely allowed to third party entrepreneurs to make use of it, without the consent of the right holder” (Court of Milan, 9 December 2019).

Furthermore, the Court noted that Article 8 of the Italian Intellectual Property Code, which prevents the registration as a trademark of third parties’ own image, name and well-known signs, is specifically aimed at enabling celebrities to exploit the “allure” of their reputation by means of merchandising.

However, while Maradona asked for one million euros in damages, the Court pointed out that failure to manufacture and sell the garments significantly affects the quantification of damages, which finally amounted to 70,000 euros.

Another similar case involving the use of the image of the famous actress Audrey Hepburn depicts the extensive protection enjoyed by celebrities’ right of publicity in Italy and the thin line between misappropriation of celebrities’ name or image and a cultural tribute to them.

Over the years, the use of the image of icons from the past (e.g., Alain Delon by Dior, Marilyn Monroe by Chanel) has become a trend in advertising followed by many fashion houses. In light of the most recent case law, we expect Italian law to adopt a stricter approach against the use of celebrities’ image or name, which could potentially result in an automatic right of compensation for any such use by fashion brands. Therefore, regardless of what the end-goal is, the lesson is that celebrities do not forgive unauthorized use of their name or image. Should you plan to do so, sooner or later you will have to pay for it!

  1. Selective distribution and online sales: the realm of luxury products

After the leading case Coty C-230/16 decided by the CJEU in 2017, in the last two years Italian case law has confirmed that blocking resale on third party platforms of products outside the selective distribution system can only take place if the following three conditions are met: (i) the trademarked product is a luxury or otherwise prestigious item; (ii) the trademark owner has adopted a legitimate and effective selective distribution system for marketing and selling the product; and (iii) the person marketing the product outside the authorized distribution network causes effective damage to the reputation of the trademark.

By way of exception to the principle of trademark exhaustion, according to which the rights conferred on the trademark owner cease when the trademarked product is placed on the market by the proprietor or with the latter’s consent, there is a “legitimate reason” justifying the opposition of the right owner to the further marketing of the product where the latter is a luxury item or a of high quality/technological standard item, which justifies the choice to adopt a selective distribution system. However there must be evidence of the actual harm to the trademark as a result of resale within the online marketplace.

To this end, the trademark owner shall demonstrate that the distributor’s choice is made according to objective criteria of qualitative nature, established indiscriminately for all potential dealers and applied in a non-discriminatory manner and that these criteria do not go beyond what is necessary for the protection of the brand.

National case law has been quite strict in its assessment of that requirement, requiring proof that authorized distributors have actually been selected on the basis that they meet certain predefined requirements. For example, in the case brought by Sisley against Amazon, the Court of Milan found that Sisley had established a legitimate selective distribution network for the sale of its products, on the ground that the distribution agreements required the products to be sold in luxury perfumeries or specialized departments, with qualified staff, in a specific urban context. The court held that the offer of Sisley luxury cosmetics on Amazon along with products of inferior quality brands as well as other items, such as household and cleaning products, or in any case of low profile and low economic value, was detrimental to the prestige and image of the Sisley brand. (Court of Appeal of Milan, 25 November 2019).

A similar conclusion was reached in the case concerning the sale of Nashi professional hair products, where the selective distribution system adopted by the brand was considered lawful, because it only included agents, dealers and distributors who resold exclusively to hairdressers and professional salons selected on the basis of certain quality standards, thus guaranteeing the professional skills of the authorized dealers and an appropriate use of the products on the basis of the final consumer’s specific needs, in line with the image and prestige of the Nashi brand (Court of Milan, 18 December 2018).

In the two cases mentioned above, the products in question were clearly considered luxury items, so that an in-depth examination of the applicability of the Coty test – which specifically concerned luxury goods – was not necessary. However, one might ask whether the same reasoning can also be applied to products of a different nature.

In light of the last decisions, we would not be surprised if Italian courts should extend the same approach to other contexts where the same sort of protection that legitimizes the adoption of a selective distribution system is needed or where the access of dealers to third-party eCommerce platforms is likely to undermine the reputation of the brand, such as, ensuring pre-sales consultancy for a proper use of the product for example.

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