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Diesel and Marni take on Zara: EU-wide remedies available for designs

Brands owners will be rejoicing at the decision of the Court of Milan in the recent case between Only The Brave and Zara, which awarded European-wide remedies for design right infringement. Previously, it was considered difficult to secure European-wide remedies unless a claim was brought in the defendant’s home court. However, this application of the CJEU’s decision in Nintendo v Big Ben expands the arsenal of enforcement options available to design right owners in the EU, given that it is often considered easier to bring claims in the country where the damage is occurring, opposed to the country where the Defendant is based. 

Background

In 2016, Only The Brave (“OTB”), the parent company of brands including Diesel and Marni, brought a claim against Inditex, the group company for the Zara brands (“Zara”) in the Milan Court of First Instance (the “Court”), claiming that:

  1. Zara’s BIKER CERNIERE and a pair of ZARA HOME sandals (the “Zara Products”), were copies of Diesel’s registered design for its SKINZEE-SP2 jeans and Marni’s FUSSBET sandals (the "OTB Designs”); and
  2. As a result, OTB was entitled to receive compensation for the entire amount of the damages suffered in the whole of the EU due to Zara’s infringements.

 

 Diesel’s registered design no. 2649491-0002                                        Marni’s FUSSBET sandal

 

 

Zara sought to have the action dismissed, arguing that the Diesel and Marni designs were not valid, but if they were valid, there were “material differences” between the Zara Products and the OTB Designs so they were not infringing.

Zara also claimed that the Court lacked jurisdiction over Zara under Article 8(1) of Regulation 6/02 (Community Design Regulation), as it was a Spanish company not headquartered in Italy, and therefore the Court could not force it to pay damages.

Judgment

Jurisdiction

The Court rejected Zara’s submissions, finding that jurisdiction exists under Article 8(1) No 1 of the Brussels I Regulation recast. This regulation permits a person domiciled in a Member State to be sued in any Member State where any of the defendants to the claim are domiciled, provided the claims are “so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings”.

Validity and infringement

In assessing validity, the Court considered the concepts of individual character and the informed user, and in particular the degree of design freedom of the designer. The Court held that account should be given to the market in which the product was operating (here the clothing sector), opposed to the influence of functional aspects (i.e. the shape of the human body). They noted that in such a crowded market even subtle differences may be perceived by the informed user as being unique, therefore the rights were valid and infringed.

Damages

On the question of territorial scope of the remedies, the Court applied the CJEU’s decision in Nintendo v Big Ben, which found that the territorial jurisdiction of a Community design court hearing an action for infringement extends throughout the EU and in respect of a defendant who is not domiciled in the Member State where the action is being heard. This extension of jurisdiction applies to remedies such as the provision of information, accounts and documents by defendants, orders to pay damages and costs etc (all of which are matters of national law).

In the present case, where the infringing activities complained of occurred in Italy, the Court found that it had jurisdiction to rule on infringement and remedies from an EU-wide perspective. However, for the activities of ZARA ESPANA that amounted to infringement outside of Italy, the applicable law would be Spanish law.

As such, the Court ordered:

  • an injunction for Zara to cease production and the selling of the Zara jeans and withdraw the infringing products from all territories of the EU; and
  • imposed a penalty of €200 for each individual product marketed in violation of the injunction granted.

The same injunction could not be granted in relation to the Marni Designs, as the unregistered design right protection had expired (unregistered design protection lasts for 3 years; registered designs can last for 25 years).

Comment

This is one of the first examples of a national court applying the CJEU’s ruling in Nintendo v Big Ben. It is an interesting judgment that raises the stakes in the never-ending battle between high fashion and high street imitations: brand owners may now benefit from European-wide remedies awarded by a national court in the member state in which the infringement occurs (so long as at least one defendant is based in the jurisdiction and the claims are “closely connected”).

This may be advantageous to claimants if they cannot or do not wish to issue a claim in the defendant’s home state for any reason, whether tactical or jurisdictional.

This also expands the enforcement options available to a brand owner and in turn, may act as a deterrent for retailers considering imitations or at the least, will likely make buying decisions more high risk and potentially costly.  It also closes down the option of putting infringing goods in some EU markets and not others, as brand owners have an easier route to full remedies as a result of this decision.

 

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