Image: Valentino

THE FASHION LAW EXCLUSIVE — Valentino is not the first fashion house to bear the Valentino name. While the Italian brand – which got its start in 1960 under the watch of its eponymous founder Valentino Garavani – is easily be the most famous brand in the world to have such a moniker, with its otherworldly couture, lengthy roster of celebrity fans, and stable of coveted accessories, a similarly-named company actually beat it to the market. When Garavani first opened up shop, an unrelated Mario Valentino was already in business in Italy, offering up footwear and after that, leather goods, operating since 1952 under the Mario Valentino name.

Almost from the outset, Valentino S.p.A. claims that “because of their similar names and overlapping goods,” the two companies “experienced issues of consumer confusion,” prompting them to enter into a co-existence agreement in 1979.

According to that agreement, which the similarly-named fashion brands agreed to forge due to their respective “desire to avoid public confusion and conflict, present or future, in any part of the world,” Mario Valentino is permitted to “use and register the full name Mario Valentino or M. Valentino or Valentino or the letters MV or V exclusively on the outside, together with Mario Valentino on the inside and on the packaging [of] all goods made of leather or imitation leather or other material.”

Mario Valentino ads

That agreement served its peace-making purpose for nearly 4 decades, during which time the Mario Valentino brand found famous fans in Jacqueline Kennedy Onassis, Elizabeth Taylor, Catherine Deneuve, and a long list of Italian actresses, among others, and entered into collaborations “with designers of the calibre of Karl Lagerfeld, Giorgio Armani, Gianni Versace,” as well as famed photographer Helmut Newton, who shot ad campaigns for the brand.

But now, the Garavani-founded Valentino S.p.A. is in the midst of a high-stakes fight with Mario Valentino over its name, with the Italian couture house accusing Mario Valentino and its American licensee of  “actively engaging in a campaign to trade off Valentino’s goodwill in the United States handbag market.”

According to a recent decision from the Court of Milan centering on the contents of the parties’ 40-year old co-existence agreement, Mario Valentino is running afoul of the parties’ agreement by “selling numerous models of handbags labeled in a manner that is not permitted under the co-existence agreement,” thereby, giving rise to “the very type of consumer confusion the agreement was intended to prevent.”

The Court of Milan held in May that Mario Valentino failed to abide by the parties’ legally-binding contract, which states that Mario Valentino is “permitted to use the ‘V’ or ‘Valentino’ mark on the outside of its handbags [and marketing], but is not permitted to use the ‘V’ and ‘Valentino’ marks together, and must also use the ‘Mario Valentino’ mark on the inside and packaging of all handbags to avoid consumer confusion.”

Fast forward to June 22 and Valentino S.p.A. has taken its fight stateside, filing suit against Mario Valentino and its licensee Yarch Capital, LLC in a federal court in California, and alleging that as a result of their breach of the agreement, they are engaging in false advertising, unfair competition, and design patent infringement.

According to Valentino S.p.A.’s newly-filed suit, Mario Valentino and Yarch Capital have taken to “marketing their handbags with packaging and related literature that prominently identifies the bags as coming from ‘Valentino,’” and making using of Valentino’s “V” logo, as prohibited by their global co-existence agreement, “while downplaying or omitting entirely the fact that they are bags licensed by Mario Valentino S.p.A,” not Valentino S.p.A. That same practice of omitting the “Mario” name extends to a recent press release sent out by Yarch Capital to promote the launch of the Mario Valentino handbag line, which Valentino S.p.A. claims “uses ‘Valentino’ 20 times, but ‘Mario Valentino’ only appears twice, including once buried at the bottom of the press release.”

Valentino’s design patents (left) & Mario Valentino bags (right)

In order to confuse consumers into believing that their handbag collection is affiliated with Valentino S.p.A. that same release that calls “Valentino one of the top brands in the world,” in reference to Mario Valentino, and calls its designer “a top designer name that people worldwide are familiar with.”

More than that, Valentino S.p.A. claims that Mario Valentino and Yarch Capital have significantly raised the prices of their bags to be “closer to the prices associated with Valentino bags,” and “have further enhanced the likelihood of confusion by copying the designs of Valentino [S.p.A]’s handbags, including designs covered by valid design patents.” (The strength of the design patent claims appears to be at least somewhat weak, given the differences between the two companies’ bags; the shape of Mario Valentino’s “Rock” bag arguably bears greater similarity to Givenchy’s Antigona bag than Valentino’s patent-protected Rockstud tote).

Such behavior, Valentino S.p.A. asserts, is “willful and deliberate” and has caused and “will continue to cause, Valentino [S.p.A.] financial and reputational harm,” in part because its own “handbags have been critical to maintaining the value of the legendary Valentino brand into the twenty-first century.” Valentino S.p.A. claims that its handbag category – which has achieve a level of “prestige” that Mario Valentino’s simply has not – has “accounted for over $700 million in revenue in the past five years, over $100 million in the United States.”

With all of this in mind, Valentino S.p.A. is seeking injunctive relief barring the defendants from “engaging in any acts that deceive or are likely to deceive consumers as to the source of their goods,” and from selling any products that infringe its design patent-protected handbags. The fashion brand has asked the court to require the defendants to produce “an accounting and award of all gains, profits, savings and advantages realized … [in connection with their] wrongful conduct,” and for an award of the profits made by the defendants.

*The case is  Valentino S.p.A., v. Mario Valentino S.p.A.; Yarch Capital, LLC, 2:19-cv-6306 (C.D.Cal.).