BAG WAR: HERMES MUST PAY BUGATTI FOR USE OF ITS NAME

Byline: Katherine Weisman

PARIS--Hermes International has been ordered by the Paris High Court to pay $57,300 (300,000 francs) in damages to Bugatti International for having used the Bugatti name on a handbag without owning the rights to the name.
The ruling is the latest development in a handbag squabble between the two companies, in which Bugatti sued Hermes over the use of the name and Hermes in turn sued Bugatti over a handbag design Bugatti is now selling under the famous automobile name.
Hermes has already acknowledged it was misusing the Bugatti name and began marketing its handbag in question under the name Bolide in December.
In the same court ruling, Bugatti was ordered to pay a symbolic franc to each of the heirs of Emile Hermes--one of the grandsons of company founder Thierry Hermes--to recognize the fact that the bag's design was developed by Emile Hermes, and not Ettore Bugatti, the automotive designer.
Bruno Telchini, the corporate lawyer for Bugatti International, said the company has not decided whether it will appeal the judgment. Still pending is the suit that Hermes filed to stop Bugatti International from selling the Bugatti bag, because it allegedly copies the Hermes design.
In 1982, Hermes internationally reregistered the handbag's design, which dates to 1923. It had never registered the name Bugatti for the bag.
Jean Louis Dumas, Hermes chairman, seemed pleased with the ruling.
"Bugatti wanted 5 million francs," he said, adding that he was happy that the judge acknowledged the bag's design originated at Hermes.
Bugatti International, a Luxembourg-based financial holding company majority-owned by Romano Artioli, bought the Bugatti name from former owner Hispano Suiza in 1987. BI owns Bugatti Automobile SpA, along with Ettorre Bugatti Ltd., a company founded and managed by Renata Artioli, who has developed luxury consumer goods like fragrances, watches and handbags under the Bugatti name.
According to Telchini, in 1992 Bugatti introduced a line of handbags made up of several models, including the Bugatti bag, and sued Hermès last year for misuse of the Bugatti name.
To continue selling the Bugatti bag, Telchini said he and his legal team will argue that the bag's design is effectively in the public domain, highlighting similar bags marketed by fine leather goods companies, including Lancel and Gucci.
Moreover, Telchini said he will claim that while Hermes may have reregistered the bag's design in 1982, it reregistered an existing design with no changes, which, he said, is not legally valid. Telchini said his team will also argue that while there are similarities between the Bugatti and Bolide bags, significant differences in obvious details make the bags completely different.
The lawyer also pointed to the bag's oval Bugatti logo, which was and still is the hood ornament on Bugatti cars.
"It would be incredible that Bugatti couldn't sell the bag whose shape was made famous under the Bugatti name," Telchini said.
The Hermes Bolide bag retails for between $2,600 (13,700 francs) and $5,800 (30,600 francs) in France, depending on the materials used. The Bugatti bag, sold in the recently opened Bugatti store here, sells for between $1,300 (7,000 francs) and $2,300 (12,000 francs).

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