Guess Inc. emerged from its second trademark faceoff against Gucci with a big win.

This story first appeared in the May 6, 2013 issue of WWD. Subscribe Today.

An Italian court in Milan rejected Guccio Gucci SpA’s claim that Guess had violated several of its trademarks and even took the step of canceling three of the marks Gucci had registered for Italy and the European Community.

Gucci said it will “certainly bring an appeal.”

It’s a win for Guess, after Gucci prevailed last May in federal court in Manhattan on a suit raising ostensibly the same issues. Gucci won a qualified victory, when the court awarded it only $4.7 million in damages, a fraction of the more than $221 million it sought.

The Milan decision, an 83-page verdict made public Friday, serves to cancel the diamond pattern, G logo and “Flora” pattern trademarks previously registered by Gucci in Italy and the EU, noting specifically that the “Flora” logo is “not distinct.” Additionally, the court held that Guess’s Quattro G-diamond pattern isn’t related to Gucci’s interlocking double-G pattern.

Guess sought the nullification of the designs in a counterclaim following the 2009 filing of the suits in New York and Milan by Gucci.

A Guess spokeswoman confirmed that Gucci’s other suits against Guess in both China and France are ongoing.

Paul Marciano, chief executive officer of Guess, commented, “In my opinion, the three-year battle in New York and four years in Milan was a result of massive and unnecessary litigation that should have been easily resolved with a simple phone call, which Gucci never made.”

Marciano continued, “The tactics of Gucci are nothing less than bullying. Because of their endless resources, Gucci has been forum shopping all over the world to try and stop Guess from expanding its successful accessories business. It’s fundamentally wrong and unconscionable.”

Gucci described the use of a number of G-based logos by Guess as “unlawful and parasitic free-riding on Gucci’s trademark and, in general, its brand image.”

Gucci said it would “certainly bring an appeal against the above decision, which in its view is potentially dangerous for the protection of ‘Made in Italy.’ In particular, Gucci will ask that the Court of Appeals entirely set aside said decision, by granting both its trademark infringement and unfair competition claims against Guess.”

Pier Luigi Roncaglia, of the Italian law firm Studio Legale SIB, which provided outside counsel for Gucci, said that the trademark matter was secondary in the decision and that the marks were generally not being used by the brand.

“The important aspect of the decision was unfair competition,” he told WWD. “Our main argument, and the one that was recognized in the case in New York, was that those marks were associated with the reputation of Gucci and that Guess was trying to get a free ride based on Gucci’s reputation. That was the core of the litigation and the judge [in Milan] ignored the decision in the U.S., which essentially said that Guess didn’t independently create those designs. That will be the basis for our appeal and the strongest argument for a reversal of the decision.”

Daniel Petrocelli of the law firm O’Melveny & Myers LLP, which has provided outside counsel for Guess for many years, asserted, “This case was heard in the birthplace of Gucci and the bottom line is that every single one of its claims was rejected and Guess’ counterclaim was granted.”

He said that Gucci and Guess were still waiting for the scheduling of cases in China and France.

A trademark attorney not involved in the case, Robert Tucker, a partner at Tucker & Latifi LLP in New York, said, “That a court in New York and another in Milan came down with different findings on the same issue is not unusual. Gucci was probably buoyed by the decision in New York and figured it had a slam-dunk in Italy, where it would enjoy hometown advantage.

“These two companies shouldn’t be litigating,” he said. “Any time it’s one titan versus another, it’s really important to look at the downside.”

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