Italy: Protection Of Trade Mark Used By Third Parties As Domain Names - Overview Of Italian Case Law

Such address is the domain name consisting of an individual part chosen by the addressee (Second Level Domain) and an abbreviation describing the type of web-site (Top Level Domain). For instance, among the abbreviations currently used ".com" characterises commercial entities or organisations whilst the words ".it" indicate the geographical origin of the web-site (in this case an Italian origin).

Given the above features Italian courts ¹ consider the domain name (inclusive of all its features) a distinctive sign when used by an entrepreneur to commercialise its products on the internet network.

In Italy the Network Information Centre (NIC) plays both the role of Naming Authority and Registration Authority. Such registration service is provided by Istituto per le Applicazioni Telematiche (IAT) (Computers Applications Institute) of Consiglio Nazionale delle Ricerche (CNR) (National Research Centre).

The basis principle governing registrations is "first come, first served". Given that two identical domain names cannot co-exist, the Italian Registration Authority will allow, in case two or more registrations concerning the same domain name are requested, the registration of the domain name first requested. Such principle is this based merely on a chronological criteria aimed at avoiding the use of various web-sites sharing the same address.

The Italian Registration Authority is not required to ascertain for registration purposes whether the requested domain name is identical or similar to names of person or registered commercial trade marks belonging to third parties.

It is in fact possible in some circumstances for the owner of a registered trade mark intending to register same as a domain name not to be allowed to register the domain name on the basis that it has already been registered by others as their domain name.

Another possible case giving rise to problems is the conflict between a person or entity owning both a trade mark and a corresponding domain name and a third party owning a domain name differing just on the part relating to the Top Level Domain (TLD).

Before addressing the current trends of Italian case law dealing with such possible conflicting cases, it is necessary to briefly outline the applicable laws and the type of protection a plaintiff may request from an Italian judge.

The owner of a registered trade mark objecting as illegal the registration of a domain name by a third party using totally or partially its distinctive sign may claim protection pursuant to the Italian provisions governing trade marks and/or the provisions of article 2598 of the Italian civil code on unfair competition behaviours.

Trade marks protection is regulated by article 1 of Royal Decree no. 929 of 21 June 1942 as amended by article 1 of Law Decree no. 198 of 19 March 1996 ("Royal Decree no. 929/1942") providing in favour of the owner of the trade mark the right to its exclusive use and prohibit third parties from using:

1. "an identical sign to the trade mark in respect of products or services identical to those in respect of which the trade mark has been used or registered;
2. an identical or similar sign to the registered trade mark in respect of identical or similar products or services if, as a result of the identity or similarity of the signs and the identity or similarity of the products or services, there may be a risk of confusion among the public, which may consist even of a risk of association between the two signs;
3. an identical or similar sign to the registered trade mark in respect of different products or services if the registered trade mark benefits in the Territory of its reputation and the use of the sign without just cause allows the third party to unduly benefit of the distinctive feature or reputation of the trade mark or causes prejudice to same."

Unfair competition behaviours are instead regulated by article 2598 of the Italian civil code, in particular paragraph 1 considers unfair competition behaviours actions carried out by anyone: "using distinctive names or signs capable of causing confusion with distinctive names or signs duly used by others, or completly imitates the products of a competitor, or carries out with any other means actions capable of causing confusion with the products and the activities of a competitor". Italian courts ² have protected the owner of the registered trade mark by regarding the unauthorised use of the registered trade mark also as an unfair competition behaviour pursuant to the provisions of article 2598 of the Italian civil code.

It follows hereinbelow an outline of the main trends of Italian courts concerning the application and interpretation of the aforementioned provisions. Initially, courts ³ intended to favour the owner of the registered trade mark who in fact used to be able to prevent a third party from using its trade mark as a domain name. On the contrary, the most current and prevailing court trend prefers to decide on a case by case basis in order to avoid possible abuses arising from the application of a general principle. The criteria currently applied by Italian courts, in order to settle disputes, is based on ascertaining the nature of the products produced or services provided by the conflicting parties.

Italian courts ⁴ currently do not consider illegal the use of a domain name corresponding to a registered trade mark belonging to third parties if there is no similarity on the goods dealt or activities carried out by respectively the owner of the domain name and the owner of the trade mark. Such criteria serves the purpose of not prohibiting the use of a registered trade mark in case such use is not capable of causing any unjustified benefit to the domain name user nor is it capable of creating confusion between the products of the trade mark owner and the products of the domain name owner.

However, Italian courts are aware of the fact that a "similarity of goods criteria" cannot be applied on a clear-cut basis in every case. For instance, such criteria is not applicable, pursuant to the provisions of article 1, paragraph c), of Royal Decree no. 929/1942 in case the domain name makes use of a popular trade mark belonging to an enterprise even if the trade mark is applied in respect of different products than those products commercialised by the owner of the domain name. In such cases, the "similarity of goods criteria" cannot be applicable as the law, and as a result also the case law ⁵, prohibits the unauthorised use, by the owner of a domain name, of the reputation, goodwill and popularity of a trade mark belonging to third parties. The ratio behind article 1, paragraph c) of Royal Decree 929/1942 is in fact aimed at preventing that a popular trade mark be used as a commercial means to attract the public towards other products and that it be in practice exploited by unauthorised entities or persons as a means to procure new clients.

As a matter of fact, if the use of a popular trade mark as a domain name by a third party were to be allowed the owner of the trade mark would be exposed to the risk that the reputation of its products as well as its professional entrepreneurial reputation be damaged, in particular in those cases when the commercial activities of the owner of the domain name has not been successful onto the market.

In such cases, Italian courts share unanimously the view to consider illegal the exploitation of a popular trade mark belonging to third parties regardless of the fact that the commercial products of the owner of the domain name are not similar to those in respect of which the trade mark is used.

Italian judges have been called upon to decide also in cases where the owner of the trade mark is also the owner of a corresponding domain name and a third party has registered a domain name different only for the part relating to the Top Level Domain (TLD). Such conflicting cases arise on the basis that that it is possible to register a domain name different from a previously registered domain name only on the part concerning the suffix TLD.

Italian courts ⁶ are generally of the view that the suffix TLD, indicating for instance the geographical location or type of activities pertaining to the web-site, has no distinctive features or capacities. Therefore, the prevailing court trend deems an unauthorised use of a trade mark even in those cases where the owner of the trade mark is also the owner of a corresponding previously registered domain name which is unduly used by a third party as a domain name although distinguishing it from the former by using a different suffix ".net, .com, .org, .gov, etc…"

Having outlined herein above the principles and criteria applied by Italian courts to determine whether or not the use of a trade mark by a third party as a domain name constitute an unauthorised use, the judicial remedies provided by Italian law, to compensate the owner of the trade mark unduly prejudiced, are the following:

1. allowing compensation for damages suffered;
2. allowing injunction relief, as a precautionary measure pursuant to article 63 of Royal Decree no. 929/1942, prohibiting the use by a third party in the future of the trade mark as domain name;
3. allowing temporary registration of the domain name by the plaintiff/claimant (owner of the trade mark) as a precautionary measure pursuant to article 700 of the Italian civil procedure code ⁷.

The remedies referred to under points 2) and 3) above undoubtedly offer the advantage to prevent or at last reduce the damaging consequences arising from the unauthorised use of the registered trade mark.

In particular, a precautionary court order issued by a judge after having ascertained the rights of the owner of the trade mark generally provides:

1. an order to stop using in any manner and form whatsoever the distinctive sign and in particular expressly prohibiting the use of same as a domain name;
2. publication of the court order in the main daily Italian newspapers;
3. insertion of the court order in the Home Page of the web-site of the party using without authorization the trade mark belonging to another party.

1 Please see decision by Tribunal of Milan, 10 June 1997, in Riv. Dir. Ind., 1998, II, 430, stating the principle: "The domain name is similar to a trade mark as the web-site is a virtual place where the entrepreneur contacts a client in order to reach an agreement".

2 Please see decision of Tribunal of Viterbo, 24 January 2000, in N.G.C.C., 2000, no. 5, 535; decision of Tribunal of Genoa, 13 October 1999, in Dir. prat. soc., 1999, f. 24, 76; decision of Tribunal of Milan, 22 July 1997, in Dir. Infor., 1997, 957; decision of Tribunal of Genoa, 17 July 1999, stating the principle that "use of a domain name by a company operating in the computer business corresponding to a registered trade mark by another company causes to the latter an unjust and immediate damage, consisting not only in the confusion that such initiative is capable of causing but also in preventing the owner of the trade mark from registering it as a domain name, thus constituting a breach of the provisions aimed at ensuring fair competition pursuant to article 2598, no. 1 and 3 of the Italian civil code."

3 Please see decision of Tribunal of Rome, 2 August 1997, in Foro It., 1998, I, 923; decision of Tribunal of Verona, 25 May 1999, in Foro It., 1999, I, 3061, stating the principle that "It is to be prohibited with urgent measures the use of a trade mark in the process of registration as a domain name for a web-site address by a third party and a fine is to be applied for each breach thereafter ascertained and for each day of delay for the execution of the court order". Please see also Pretura of Valdagno, 27 May 1998, in Giur. It., 1998, 2108.

4 Please see decision of Tribunal of Verona, 25 May 1999, in Giur. It, 2000, 341; decision of Tribunal of Rome, 9 March 2000, in Dir. Inform, 2000, 360; decision of Tribunal of Pescara, 9 January 1997 in Dir. Inform, 1997, 952.

5 Please see decision of Court of Cassation, 21 October 1998, no. 10416, in Riv. Dir. Ind., 1999, II, 319; see also decision of Tribunal of Vicenza, 6 July 1998, in Giur. It., 1998, 2342.

6 Please see decision of Tribunal of Milan, 3 February 2000, in N.G.C.C. 2000, no. 5, 535; decision of Tribunal of Milan, 10 June 1997, in Riv. dir. ind. 1998, II, 430.

7 The owner of the trade mark may obtain, pursuant to article 700 of the Italian civil procedure code, the temporary registration of a domain name used by a third party corresponding to its trade mark if the owner of the trade mark is able to prove: a) to be the owner of the trade mark; b) the unauthorised use of the trade mark by third parties; b) the risk to suffer damages by the unauthorised use of the trade mark as a domain name by third parties. Please see decision of Tribunal of Cagliari, 28 February 2000, in in N.G.C.C., 2000, no. 5, 535.