After staging a mock counterfeit operation on New York’s Canal Street in February as a play on the modern counterfeit trade, Diesel’s parent company OTB Group has been facing off against one such bad actor, Inditex, in court. Breganze, Italy-based OTB Group – which owns Diesel, Maison Margiela, Marni, and Viktor & Rolf, among other brands- has been embroiled in a legal battle against Zara’s parent company after initiating the matter in a Milan court in November 2015, alleging that Zara was selling counterfeit versions of legally-protected Diesel jeans and Marni footwear.
According to OTB Group’s complaint, Zara was manufacturing and selling copycat versions of Diesel’s Skinzee-SP skinny jeans and Marni’s Fussbett sandals in violation of European Union (“EU”) intellectual property law. OTB claimed that it maintains an EU registration for the design of the Skinzee-SP jeans, while it relies on EU unregistered design protection for the Fussbett sandals. As a result, it sought monetary damages caused by Zara’s sale of counterfeit goods not only in Italy but throughout the EU.
In response, Inditex argued that there were “material differences” between its sandal design and that of Marni’s Fussbett sandal and that the registration for Diesel’s Skinzee-SP jeans is invalid due to a lack of originality. Moreover, it asserted that even if was on the hook for infringement, the Court of Milan could not force it to pay damages, as it is a Spanish company that is not headquartered in Italy.
However, the court disagreed in what is being called “the first decision in Europe to confirm the possibility of claiming EU-wide damages for registered and unregistered designs in a jurisdiction (in this case, Italy) other than the main defendant’s jurisdiction (Spain).”
Judge Claudio Marangoni upheld the validity of the design protections at issue and further held that Zara had, in fact, engaged in counterfeiting and ordered Inditex to immediately recall the infringing goods or pay it would run the risk of having to pay $235 for each product on the market that runs afoul of the court’s injunction.