Can an advertisement mock a fictional character like Zorro? The Supreme Court of Cassation delivers a momentous decision on parody as an exception to copyright and trademark

Decision No. 38165/2022, published on December 30, 2022, once again gave the Italian Supreme Court of Cassation an opportunity to grapple with an issue of topical interest, this one regarding the interplay between copyright and trademark law and the applicability of exceptions for parody purposes. The subject of the dispute was an advertisement in which an actor mockingly impersonates legendary masked swordsman Zorro.

The lawsuit started in 2007, after the commercial was broadcast on television and radio as part of an advertising campaign for Brio Blu, a well-known Italian brand of sparkling water, and the rightsholder (the U.S. company Zorro Productions Inc.) filed a claim against the company that had commissioned the advertisement (CO.GE.DI. International).

In the first instance, the plaintiff’s claim was granted; the Court of Rome recognized the validity of the enforced IP rights and their infringement. The Court of Appeals then overturned that judgment, holding that the Zorro character was in the public domain, and that the trademark rights to it had lapsed due to non-use in the relevant classes. That decision was soon appealed, and it failed to pass the scrutiny of the Supreme Court of Cassation. That court set the decision aside on remand, saying that pursuant to the Geneva Convention of 1952 the character had not, in fact, entered the public domain because it was the work of a U.S. citizen published in Italy, and therefore Italian copyright law granted it protection for 70 years after the death of its author. Ruling again on the case, the Court of Appeals of Rome upheld Zorro Productions Inc.’s copyright claims, namely that the use of a famous fictional character could amount to infringement of copyright and its imitation could not be considered lawful simply because the commercial was a parody. In fact, the judges in the second instance ruled that the exception was inapplicable because the (optional) parody exception provided in Art. 5(3)(k) of Directive 2001/29/EC (also known as the InfoSoc Directive) had not been transposed in Italy, and in any case the advertisement in question did not represent a creative reworking of the earlier work. Conversely, the Court of Appeals dismissed the trademark claims due to a lack of distinctive use of the word Zorro and related figurative signs in the commercial.

The water company, unsuccessful in its defense against copyright infringement, challenged the latest ruling of the Court of Appeals before the Supreme Court of Cassation, leading to the recent decision. In essence, the defendant argued that the second-instance court was mistaken when it said the parody exception was not applicable to the contested use of the character in the advertisement. It claimed that even though Italy did not transpose Art. 5(3)(k) of the InfoSoc Directive, the parody exception was already part of the Italian legal system as part of the right to criticism and review provided in Art. 70 of the Italian copyright law. The rightsholder filed a cross-appeal against the part of the appellate decision ruling out trademark infringement.

Against this backdrop, the case was referred to the Supreme Court of Cassation, which provided a useful overview of the balance between IP rights and freedom of expression and detailed some important legal principles on copyright and trademark infringement. The decision opens by stating that fictional characters indisputably are eligible for protection under Italian copyright law, regardless of the protection accorded to the works in which they are originally conceived (in this case, a novel). Moving on, the Supreme Court of Cassation then deviated from the reasoning and conclusions of the Court of Appeals regarding the contested copyright infringement and proceeded to define and describe the notion of parody. According to the judges of the court of last resort, parody consists of a “reworking” through an imitative caricature implemented for satirical, humorous, or critical purposes. As such, a parody is by its very nature entwined with the original work (or character, in this instance) and departs from it for the purposes of conveying a different message than the one expressed by the author of the work in question. Therefore, continues the decision, unlike plagiarism and counterfeiting—which are activities of mere reproduction—parody always reinterprets the original work to some extent, tweaking its meaning to convey a new message.

After this extensive exploration of the notion of parody, the Supreme Court of Cassation then weighed in on its compatibility with the exclusive rights of the author and the author’s successors in title. It excluded the possibility that parody can be subsumed into the regime for derivative work, which would require the permission of the rightsholder—likely to be withheld in the case of parody. Instead, the court held that parody should be treated as an (autonomous) manifestation of thought and artistic creation protected under Art. 21 and Art. 33 of the Italian Constitution. In addition, the court noted that despite the fact that Art. 5(3)(k) of the InfoSoc Directive has not been transposed in Italy, the parody exception should be regarded as embedded in the (pre-existing) right to criticism and review provided under the quotation exception set forth in Art. 70 para. 1 of Italian copyright law. This holds for parody of a fictional character as well, as long as it does not conflict with normal exploitation of the original work (that is, the character itself). In light of this, the Supreme Court of Cassation remanded the case to the Court of Appeals for it to rule on the copyright claim once more.

Regarding the alleged trademark infringement, the Supreme Court of Cassation held that the Court of Appeals should reassess the claim, considering that what matters is whether the use of the third-party sign that has acquired a reputation is capable of affecting users’ perception of it, regardless of the fact that the sign is used to identify products or services. In conducting this analysis, the various functions of the trademark should be considered, as these are not limited to the mere indication of origin of the product but should encompass its meaning and value from a communication, investment, and advertising perspective. Interestingly, the court takes the stance that a similar conclusion is not affected by the recent legislative amendment to Art. 20, para. 1, let. c) of the Italian industrial property code, which now provides that the use of a sign relevant to the infringement of a reputed trademark may be use that takes place “for purposes other than that of distinguishing the goods and services.” According to the court, that amendment lacks true innovative scope and is actually implementing the preexisting interpretation of both scholars and case law in relation to the protection of trademarks with acquired distinctiveness. That said, even parody use of someone else’s well-known trademark (something not specifically addressed by either EU or Italian trademark law yet allowed to a certain extent by case law) could create a link to the message of the latter. Similar use would be unlawful insofar as it might create an advantage for the unauthorized user and author of the parody or a disadvantage for the trademark owner, for instance by diluting the effect of the trademark or tarnishing the trademark, and as a result it would interfere with the exclusive rights conferred upon the trademark owner upon registration.

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