By Sarah Redmond, Commerce and Technology Associate, Fox Williams LLP
In the fashion industry, it is common for designers to use their own names for their clothing brands and these names are often then registered as trade marks. However, what happens when a designer leaves a company and/or transfers the rights to the name to a third party?
In 1990, Elio Fiorucci (a well known fashion designer in the 70s) sold his business to a Japanese company, Edwin Co. Ltd ("Edwin") as he was having financial difficulties. Mr Fiorucci transferred all the trade marks for FIORUCCI to Edwin.
In 1997, Edwin applied for a Community trade mark for ELIO FIORUCCI in Classes 3, 18 and 25 (for goods including, cosmetics, perfume, bags, clothing and shoes). The mark was registered in 1999. In 2003 Elio Fiorucci applied to have the mark cancelled on the basis that The Community Trade Mark Regulation provides that a trade mark may be declared invalid where its use may be prohibited pursuant to an earlier right, in particular a right to a name, as defined by European Union law or national law.
Mr Fiorucci claimed that, in Italy, a well known name can only be registered as a trade mark by that person or with the consent of that person. As he had given no such consent, he argued that the CTM should be cancelled.
The Cancellation division of the Office of Harmonization for the Internal Market (OHIM) agreed with this argument. Edwin appealed and, in 2006, the decision was overturned by the Court of Appeal of OHIM on the basis that Italian law prevented third parties from exploiting the name of a famous person for commercial purposes. However it would not be taken into account where the commercial potential of a name had already been fully exploited (as it had by Elio Fiorucci).
Mr Fiorucci appealed and in July 2011 the European Court of Justice found that the definition of a right to a name covered commercial use of a name. Therefore, a holder of a name is entitled (under the relevant national law) to prevent third parties from registering the mark as a CTM when consent has not be given.
Following this decision, it is imperative that businesses considering a purchase of the business of a well known person with the intention of expanding the use/registrations throughout the EU take advice from local lawyers in relation to the potential impact of any national laws. In this case, Edwin probably did not contemplate that, despite purchasing his rights all those years ago, Mr Fiorucci would still have a legal claim to the name. If they had at the time, they may have been able to prevent this by ensuring that they had obtained written consent from him for any trade marks that they might have wished to file in the future.
Sarah Redmond is an associate in the Commerce and Technology department and also a member of the fashionlaw team at Fox Williams LLP. She can be contacted at email@example.com
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