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 image: Versace

image: Versace

In the summer of 2016, just as Versace was preparing to stage its Fall 2016 Atelier Versace couture collection in Paris, the Italian design house embarked upon what would become a back-and-forth legal battle over its name. Versace had learned that another brand – Versace 1969 Abbigliamento Sportivo, which often went by “Versace 1969” – was using its name to sell garments and accessories. As a result, Versace filed suit in federal court in Northern California in late June. Just days later, Donatella Versace’s sculpturally draped couture collection hit the runway.

According to Versace’s complaint, Versace 1969 was engaging in trademark infringement and dilution, and unfair competition due to its use of the Versace name, which the Gianni Versace brand had begun using in – and has maintained legal rights in since –  the late 1970’s. As it turns out, despite its markedly similar name and location (both Versace and Versace 1969 are headquartered in Milan), Versace 1969 Abbigliamento Sportivo has no relation to or affiliation with the well-known Versace brand, and neither does it founder Alessandro Versace.

The similarity of the names and the types of goods offered by both brands was likely to cause consumers to believe that there was an association between Gianni Versace and Versace 1969, Versace argued in its suit. And as of Tuesday, the court agreed.

Granting summary judgement for Versace and ordering up a permanent injunction, Judge Haywood S. Gilliam of the U.S. District Court for the Northern District of California held that Versace 1969 is on the hook for trademark infringement because, among other things, it has made use of a brand name that is “significantly similar” to that of the Versace brand and that their products exist in close proximity in the market, and the marketing channels for such products are also similar.

Judge Gilliam made note of the 2010 outcome in the trademark case that fellow Italian design house Gucci filed against Gemma and Jennifer Gucci for using their names on a wide range of products not associated with the once-family owned fashion brand. In that case, the court sided with Kering-owned Gucci, saying the relatives of Gucci founder Guccio Gucci could not use their last name on the products at issue, namely, housewares, cosmetics, hosiery, and handbags.

In terms of Versace’s trademark dilution claims – note: trademark dilution is different from infringement, as dilution occurs when an entity uses a trademark that is sufficiently similar to a famous mark such that it harms consumer perception of the famous mark – the court sided with Versace yet again. Judge Gilliam held that Versace 1969’s use of the similar trademark served to blur the distinctive of the Versace trademark, thereby “creating the possibility that the mark will lose its ability to serve as a unique identifier of [Versace] products.”

Moreover, he stated that Versace 1969’s use of the Versace name on its products – ones that are “inferior to Versace’s” in terms of quality, as evidenced by the “1 percent return rate from [Versace] consumers” – tarnished the Versace name.

Judge Gilliam held that an order requiring that Versace 1969 permanently cease all commercial use of the Versace name is warranted due to the “substantial and uncontroverted evidence of harm to Versace,” as a result of Versace 1969’s use of its trademark and in light of the fact that the “loss of goodwill incurred by Versace renders [mere] money damages inadequate.”

The court is still expected “to discuss with the parties … [the scope of the] permanent injunction, particularly Versace’s inclusion of provisions requiring [Versace 1969] and third party licensees to destroy and provide proof of destruction of all remaining inventory of all goods or services subject.” And still yet, a bench trial is set to be scheduled in order to determine the amount of money that will be awarded to Versace in connection with Versace 1969’s profits.

Rosemarie T. Ring, of Munger, Tolles & Olson LLP, who represented Gianni Versace S.p.A. in the case, told TFL: “Versace is one of the world’s most iconic fashion and lifestyle brands. For over a decade, Versace has been fighting in foreign courts to stop these defendants from exploiting the Versace brand in other parts of the world.”

She further noted, “We are delighted that the Northern District of California has now joined these courts in protecting and vindicating Versace’s rights by enjoining these defendants from expanding their efforts to take advantage of Versace’s unparalleled brand recognition to the United States.”

* The case is Gianni Versace, S.P.A., et al., v. Versace 19.69 Abbigliamento Sportivo Srl, et al., 4:16-cv-03617-HSG (N.D.Cal).