A Recent Italian Decision Against Domain Name Grabbing

In a decision of November 25, 2000, based upon a preliminary relief application, the Tribunal of Monza clarified a number of important principles concerning domain name grabbing.

The background facts were as follows:

The petitioner was a French company and the publisher of the world famous interiors magazine "ELLE DECOR" (in some countries published as "ELLE DECORATION"). It owned the trademark "ELLE DECOR" which was registered for printed matter. The defendant was an Italian company active in publishing and broadcasting which had registered the domain name www.elledecor.it, as well as the names of many other famous Italian newspapers and magazines. The petitioner claimed that the registration and the use of the domain name www.elledecor.it

infringed its trademark and constituted an act of unfair competition. It sought the immediate cessation of any use of this domain name and the cancellation of its registration.

Dissenting from other highly criticised decisions, the Tribunal of Monza held that a domain name is a distinctive sign of its owner and not only an alpha-numerical address. Therefore, the general principles of distinctive signs, in particular those laid down by trademark law, are applicable in disputes concerning domain names and other distinctive signs.

As to the claim of trademark infringement, the Tribunal first highlighted that, in order to establish the existence of an act of infringement in Internet-related matters, it was not the case that the risk of confusion was lower for a net surfer than for a member of the general public, as the net surfer – using a "sophisticated" instrument such as the Internet – would be more watchful.

The Tribunal then had to decide whether a site presented as "under construction" was sufficient evidence of the use of the domain name. Here, the Tribunal stated that the site could be considered as active and that, moreover, the evidence of the use of the domain name was reinforced by the presence of some hyperlinks in the site, which transferred the surfer to another site also owned and managed by the defendant.

For this reason, the Tribunal held that the Italian company made "use of the sign" of the petitioner as established by art. 1 of the Italian Trademark Law.

Whilst the Tribunal rejected the infringement claim based on the similarity of the respective goods and services (since it found no sufficient similarity between the printed magazines of the petitioner and the television services of the defendant), it held that there was a case for infringement given the well-known character of the trademark "ELLE DECOR" and availability of protection in respect of dissimilar goods and services, provided that there was a prejudice to the owner of the trademark being infringed or that the infringer was unduly taking advantage of the well-known mark.

In distinguishing between famous and well-known trademarks, the Tribunal defined the trademark "ELLE DECOR" as a well-known trademark by applying the principles laid down by the European Court of Justice in re General Motor Corporation vs. Yplon S.A. (C-375-97), which stated that a trademark can qualify as well-known when it is "known by a significant part of the public concerned with products or services which it covers". The Tribunal considered that the prejudice to the trademark owner in this case was represented by the diminishing of the "attractive power" of the "ELLE DECOR" mark and by a loss of the goodwill attached to it. The unfair advantage was attributable to the number of contacts obtained by the defendant’s main web site through the hyperlinks on the site www.elledecor.it.

As to the claim for unfair competition, the Tribunal held in favour of the French company on the basis of allegations of behaviour contrary to fair professional practice by the defendant. Particular references were made to the so-called "Codice di Autodisciplina Pubblicitaria" (Italian Self-Regulating Code of Advertising Conduct), which specifically concerns the rules to be followed in advertising, as well as to recent case law on the same point.

The Tribunal observed that it is possible to extrapolate from article 13 of the above Code, the following principle of general application (i.e. not limited to advertising issues): It is contrary to fair professional practice to take advantage of the fame obtained by others and – in this case - to register as a domain name, a well-known trademark, paying low fees for its registration, in comparison with the huge investments made by the trademark owner.

In conclusion, this decision is part of the series of cases on Internet related-issues that support the theory that a domain name is undoubtedly a distinctive sign and that trademark law can be applied in a dispute involving a domain name and a trademark. Moreover - and this is the real novelty of this decision - the Tribunal of Monza has highlighted that using a domain name which is identical to a well-known trademark is a clear act of unfair competition, contrary to fair professional practice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.