Irish Court of Appeal Rules Against Diesel in Trade Mark Dispute

A 30 year long legal dispute about ownership of the DIESEL trade mark for jeans in Ireland has recently been decided by the Irish Court of Appeal. Read on for our analysis and insight from our award-winning Intellectual Property team on the likely impact on brand owners in the fashion sector.

The Irish Court of Appeal has recently overturned a High Court decision, reported in our previous article, which found in favour of the Italian clothing company, Diesel SPA (Diesel Italy) in a trade mark dispute. The long-running case between Diesel Italy and an Irish company named Montex Holdings Limited involved rights to the Diesel trade mark registered for jeans. The Court of Appeal decision ultimately means that neither party is entitled to registered rights for “Diesel” in Ireland protecting jeans. We review this latest development, and its impact on brand owners in the fashion sector.

Background

Diesel Italy first sold jeans in Ireland under the name Diesel in 1982. Montex’s predecessor also manufactured jeans under the name Diesel and began producing them in late 1979. Montex applied to register the word Diesel as a trade mark in September 1992. Diesel Italy applied to register the trade mark Diesel and the below in January 1994. In the same year, Diesel Italy registered its opposition to Montex’s registration on the basis that it was likely to lead to confusion with its products. Diesel Italy characterised it as an attempt by Montex to dishonestly take its trade mark. Montex similarly opposed Diesel Italy’s attempts to register its Diesel trade marks.

Earlier Court decisions

Montex’s trade mark application, having been filed first, was refused by the Irish trade mark office. The office decided that Montex had failed to establish that there was no likelihood of deception and confusion with Diesel Italy’s offerings. Montex appealed ultimately to the Irish Supreme Court. The Supreme Court upheld the refusal of the Irish office to register Montex’s application for registration, on the basis that doing so would cause confusion under Irish trade mark legislation. Regarding Diesel Italy’s applications, the Irish office initially upheld Montex’s oppositions and refused the applications.

Diesel Italy appealed to the Irish High Court. In December 2023, the High Court decided that Diesel Italy was entitled to register the Diesel trade mark, as it was the originator and owner of the mark. The High Court accepted that confusion would result but held that this arose because Montex had copied Diesel Italy’s mark since 1979. Confusion, the Court held, could not prevent registration where that confusion was caused by wrongful conduct. Montex appealed.

Court of Appeal decision

The Court of Appeal overturned the High Court decision and allowed Montex’s appeal on the following grounds:

1. The question of ownership of the Diesel trade mark had already been dealt with by the Supreme Court. This meant that the Supreme Court held that Montex, as first user of the trade mark in Ireland, was the owner for the purposes of the trade mark legislation. As such, this was binding precedent, according to the Court of Appeal, and the question should not have been revisited by the High Court i.e. it was res judicata.
2. In light of this finding on the issue of ownership of the trade mark, the question of Montex’s bad faith did not need to be addressed.
3. In addition, the Supreme Court had already concluded that confusion under the trade mark legislation prevents registration, irrespective of whether there is blameworthy conduct or not. Therefore, it was not open to the High Court to allow registration of Diesel Italy’s trade marks on the basis of Montex’s conduct, given the Court’s acceptance that confusion would result from registration. The question of blameworthiness by Montex was irrelevant and therefore Diesel Italy’s applications needed to be refused due to the likelihood of confusion arising about which entity owns rights to a trade mark.

For those reasons, the Court of Appeal held that Diesel Italy must be refused registration of the Diesel marks in Ireland.

Comment

The decision appears to bring to a head a 30 year long trade mark dispute between Diesel Italy and Montex. Ultimately, it has resulted in a stalemate with neither party now entitled to register the Diesel trade mark in Ireland for jeans. A further appeal to the Irish Supreme Court is possible in theory but permission would be required for that to happen. It therefore remains to be seen whether we have now reached the conclusion of 30 years of litigation.

For brand owners in the fashion sector, a number of key learnings are apparent from the case:

• Clearance searches should be carried out in all territories of interest to your business before proceeding to use and/or file trade mark applications.
• There is a first-to-file system for trade marks in the EU. This means the sooner you file an application the better. An earlier right will defeat a later right used or filed by a third party.
• Courts will be slow to divert from binding legal precedent. In this case, the Court of Appeal noted that it is an abuse of process to attempt to re-litigate a question which has been finally and conclusively determined between the parties.
• Evidence and up to date records concerning the use of trade marks and designs should be retained, including evidence of development, launch and sales. This will be helpful in the event of subsequent disputes arising.

For more information and expert legal advice on how best to protect your IP 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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