Dishonest Copying of Diesel Trademark Found

Italian jeans manufacturer, Diesel, prevails in an Irish trade mark dispute lasting over 30 years. The High Court considered the idea that Montex Holdings Limited independently came up with the very same name to be ‘completely fanciful’. Gerard Kelly, Head of Intellectual Property explores the implication for brand owners.

Diesel SPA (Diesel Italy) is an Italian company which has sold clothing, particularly jeans, under the brand name ‘Diesel’ since 1978. The defendant, Montex Holdings Limited (Montex) is an Irish company based in Co. Monaghan who also manufactures jeans under the name ‘Diesel’. The dispute between the parties regarding the use of the name DIESEL goes back over 30 years to 1992.

Despite having manufactured jeans in Ireland with the name ‘DIESEL’ since 1979, Montex filed the first trade mark for ‘DIESEL’ in Ireland in September 1992. Diesel Italy applied to register its ‘DIESEL’ trade mark in 1994 and opposed the earlier application by Montex on the grounds that it was likely to lead to confusion with its products and constituted an attempt to dishonestly take its mark. Diesel Italy’s products had been sold in Ireland since at least 1982. The Montex application was initially rejected by the Intellectual Property Office of Ireland (IPOI) on the grounds that Montex had failed to establish that there was no likelihood of confusion with Diesel Italy’s product. This decision was subsequently upheld by both the High Court and the Supreme Court and the application for registration ultimately failed.

The disputed trade mark in the current case is the application for the trade mark ‘DIESEL’ filed by Diesel Italy in January 1994. The application was opposed by Montex. As a result of the timeline, the case had to be decided with reference to the Trade Mark Act 1963 rather than the Trade Marks Act 1996 and related EU legislation, which post-dated the commencement of the dispute.

The question being determined by the court was whether the IPOI was incorrect in allowing Montex’ opposition and refusing the registration of Diesel Italy’s trade mark. The reasons for the refusal included that:

• Diesel Italy was not the proprietor of the trade mark, and
• The application failed to meet the requirements of the Trade Marks Act 1963 because there would be confusion or deception in the marketplace as a result of two similar names

Diesel Italy appealed the IPOI’s decision to the High Court.

Regarding ownership, Montex was only able to demonstrate use of the mark from 1979 onwards, a year after Diesel Italy’s first use of the mark in Italy and three other European countries. In addition, there was no credible evidence put before the court as to how Montex came to use the name ‘Diesel’. The Court found the coincidence of names to be “so improbable as to be extremely unlikely.” The Court concluded that Montex was not the owner of the mark in Ireland. It noted that a person cannot act dishonestly and then acquire a proprietary right in anything – from a house to a trademark.

Regarding the potential for confusion and deception in the marketplace, the court found that Montex could not commit an act of deception and/or dishonesty by copying a mark and then argue that Diesel Italy should be refused registration because of the deception and/or confusion caused. That would allow Montex to profit from its own wrongdoing.

The court held that Montex should be restrained from the unlawful use of the DIESEL mark.

Conclusion

This decision will be warmly welcomed by trade mark owners in Ireland and, in particular, trade mark owners who deal with copycat brands and potential confusion in the marketplace. However, it also highlights the importance of documenting the process of brand creation and early filing of trade marks. Diesel Italy applied for its first trade mark in Italy in 1977 despite not using the brand on its products until 1978. Conversely, Montex were unable to provide any credible evidence of how/when they decided on the brand name and filed a trade mark application in Ireland 13 years after first use of the brand.

For more information and expert legal advice on the impact of this decision and how best to protect your intellectual property rights, please contact a member of our award-winning Intellectual Property team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

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