This article is written by Dhruv Shah, pursuing a Diploma in Intellectual Property, Media, and Entertainment Laws from LawSikho.

Introduction

‘Do you mean: ‘Apple’ or Apple Records’? As a trademark enthusiast, I was shocked when Google search told me that there exist two companies having similar names in completely different fields. Turns out Apple Records did file a lawsuit against Apple Computer for trademark infringement. As a condition of the settlement, Apple Computer agreed not to enter the music business, and Apple Corps agreed not to enter the computer business. This may be difficult in the case where the companies are both dealing in a similar business. In this article, we are going to witness the fight between two famous luxury brands with similar trademarked names.

Valentino S.p.A. is an Italian luxury fashion house founded in 1960 by Valentino Garavani and part of Valentino Fashion Group. It is in the business of selling bags and shoes for both men and women who are of course considered ‘elite’. You can even order a customizable tote bag with a unique handmade print of your pet by the incredible illustrator Riccardo Cusimano. Unlike normal brands, you can have to get a boutique appointment to discover their collection and receive assistance from a dedicated staff. On the other hand, is Mario Valentino. Founded in Naples, Italy in 1952 by Mario Valentino, it has become a world leader in the manufacture of leather goods and by now a historic producer of shoes, accessories, and haute couture. It is also in the business of providing the ‘elite’ with bags, shoes, and leather goods for both women and men. Now the consumers are confused and they have doubts like is Mario Valentino, Valentino? Is it a copy of Valentino Garavani? Which one of these is the real Valentino?

Valentino v. Mario Valentino

There was the risk that consumers across the globe might confuse the two companies and the authenticity of their products, and steps were necessary to prevent such confusion. Turns out, due to their similar names and overlapping goods the two luxury brands did experience multiple issues of consumer confusion, forcing them to enter into a co-existence agreement in 1979. Because when Garavani started his business in 1960, an unrelated Mario Valentino was already in business since 1952. According to that co-existence agreement, which the similarly-named fashion brands agreed to create owing to their desire to avoid public confusion and conflict at any place in the world at any given point of time under which,  Mario Valentino was 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. That agreement did serve its purpose for over 40 years during which, both the brands established themselves seeking popular customers and many Italian actresses. They also collaborated with many famous designers and photographers who took their brand to a whole new level.

Issue

For almost 40 years, both fashion moguls managed to co-exist without any legal matters. However, the fashion industry was shocked to see both brands facing off before a court in Milan. The issue is the contents of their 40-year-old co-existence agreement, as well as some of the specific handbag designs that Mario Valentino was selling. Mario Valentino has been accused of actively engaging in a campaign to trade off Valentino’s goodwill in the United States handbag market. 

2019 was the year when Valentino accused MV and its American licensee Yarch Capital of violating that agreement by “marketing their handbags with packaging and related literature that conspicuously pinpoints the bags as coming from ‘Valentino’’ and making use of Valentino’s “V” logo, a particular combination of trademarks that it claims are forbidden by their global co-existence agreement. 

At the same time, Valentino emphasized the fact that MV and Yarch have been deliberately trying to hide the fact that their bags are licensed by Mario Valentino and Valentino. Not stopping at this, they have also been accused of selling lookalike bags that infringe its design patent-protected bags. 

Rule

When it comes to similar names to be registered as trademarks, there exists the option of the consent agreement in the form of a letter of consent or a co-existence agreement. A letter of consent is a consent agreement approved by the owner of an earlier trademark registration agreeing to the registration and the use of an identical or similar trademark on the same or similar goods or services.  A coexistence agreement is a consent agreement between the parties in which the parties consider that no likelihood of confusion exists. In the eyes of law, however, a letter of consent is more vulnerable than a coexistence agreement.  Therefore, if the marks are similar and the goods are extremely related, a coexistence agreement should be incorporated instead of a letter of consent. 

Co-existence agreements are significant and do make good business and financial sense in many situations, and both parties can strike a fair compromise when using an identical or similar trademark. Here are some of the key components of a successful co-existence agreement for trademark use to ensure that not even a minor detail has devastating consequences if litigation becomes necessary:

1. All parties bound by the agreement;
2. The exact trademarks and/or logos that are to coexist;
3. The domain names associated with and used by each party;
4. A list of geographical areas in which coexistence is allowed and not allowed;
5. Each party’s plan for relevant expansion of their enterprise;
6. The start and end date of the agreement; and
7. A provision establishing the jurisdiction of the agreement and the chosen method of dispute resolution.

Along with this to present a coexistence agreement to the USPTO, an applicant (the party seeking a trademark registration) must meet some of the USPTO’s following criteria for “concurrent use”:

1. Concurrent use is ordered by a court;
2. The owner of the conflicting mark’s registration permits concurrent use; or
3. The applicant first used its mark in commerce before the filing date of a conflicting mark’s pending application or a conflicting mark’s registration.

Why is the matter significant? Because it creates confusion, affects the brand recall and brand recognition, bad management of a brand affects the image of the other one.

Analysis

In this case, Mario Valentino maintains that it is Valentino that has engaged in unethical acts by violating their co-existence agreement. For instance, the co-existence agreement requires that “in any advertising for its leather handbags,” among other similar goods, Valentino “may only use its symbol and/or ‘VALENTINO GARAVANI,’ and therefore, must utilize the term ‘GARAVANI’ in addition to ‘VALENTINO’ to minimize consumer confusion between the parties.” 

Yet since the beginning of 2017 Valentino has conspicuously placed ‘VALENTINO’ in its advertising for handbags, removing and dramatically reducing the appearance of the required term ‘GARAVANI,’ and also eliminating any reference to “Garavani” altogether. It is also conveyed that Valentino has also violated trademark rules. Valentino has been accused of trademark infringement, unfair competition, false association, and false advertising, MV claims that Valentino’s use of its various “Valentino” and “M. Valentino” marks “on or in connection with the advertising and sale of goods constitutes the infringing use of MV’s registered marks in commerce. It also states that Valentino is indulging in “a type of infringement often called ‘reverse confusion,’” which occurs when a more powerful company uses the mark of a smaller, less powerful senior user. This goes to show that Valentino is using its bigger size and leverage to openly eliminate its smaller competitors like Mario Valentino.

Case summary and outcome

In a preliminary win for Valentino in May 2019, the Court of Milan determined that Mario Valentino failed to abide by the parties’ legally binding contract of co-existence. The court explicitly prohibited Mario Valentino from using the marks in any way other than what the agreement prescribed. 

This led to Valentino filing a similar suit in the California Federal Court. Valentino was accused of misleading and creating confusion while the defendant asked Judge John Kronstadt that the accusations are misleading and untrue. The defendants also requested the judge to put the domestic proceedings on hold in their entirety until the Italian case between Valentino and Mario Valentino is finished. Valentino wants the court to refute that, as well, claiming that, among other things, the court should not put the current case on to wait for an Italian court to decide “a small part of the dispute,”

The battle between the two luxury brands is still on. The lawsuit is also pending in the USA. It has been revealed in a report that attorneys for both brands have filed a pleading. It states that attempts to settle have not led to an out-of-court settlement. The lawyers thus believe that “a second attempt could be productive after the completion of the summary judgment briefing”. 

Global perspective

One of the popular cases in the IT sector was the case of Apple vs. Apple Records. The Beatles’ record company has been known as “Apple Corps” since 1969. Apple Computer was founded eight years later, in 1976. In the start, the two companies’ businesses were so dissimilar that the existence of two “Apples” did not lead to any issues. But in 1981, so many conflicts had occurred that the two companies were forced to enter into a written agreement with one another regarding how each of them could use the “Apple” name and logo. Unfortunately, that agreement did not settle things.

When Apple Computer began using the “Apple ” name and logo in connection with its iTunes online music store in 2003, Apple Corps sued them. Apple Computer won the case which is a crystal clear example of subjective relativism. This dispute between the two Apples can be emphasized by this theory, in the sense that there is not a clear right or wrong. It depends on how this case is viewed, who is viewing it, and what side the viewer is on. Under the co-existence agreement, Apple Computer was restricted to sell any physical copies of music records and so it was well within its right to sell music digitally because it was not part of the agreement.

Conclusion

To date, the lawsuit has focused largely on allegations about the goods sold by Mario Valentino leading to cases currently underway in court in the U.S. and Milan. In this case, the stakes are quite high. It talks about who will gain the authority to use the Valentino name on all “leather goods”, which represent a sizable chunk of revenue for both. One of the biggest ironies here is that Valentino, which is obviously bigger and possesses more resources, lacks the legal power to use its “Valentino” name on some of the most important products in its lineup, the very goods that it sells the most of. That is the reason why most of its expensive and popular products are branded as Valentino Garavani. The reason behind these suits is that they would have a huge impact on its brand value which is very dear particularly to any fashion company. After all, it is linked to its branding and intellectual property, and that is important to protect and preserve.

References

1. https://lowendmac.com/2014/whats-in-a-name-apple-corp-vs-apple-computer/
2. https://muttflapper.com/authentication-valentino/the-tale-of-two-valentinos
3. https://www.easilydressed.com/2016/06/mario-valentino.html
4. https://luxuryviewer.com/is-valentino-by-mario-valentino-a-luxury-brand/
5. https://www.laconceria.it/en/news/mario-valentino-vs-valentino-the-legal-dispute-takes-over-farfetch/
6. https://www.reddit.com/r/femalefashionadvice/comments/kxopln/mario_valentino_is_not_valentino_garavani/
7. https://www.lexology.com/library/detail.aspx?g=d4bbf9dc-34e9-4b93-a58e-93a50ad06c89

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