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The Italian Court of Rome held that there was a trademark breach through NFTs showing a former football player of a famous team.
An Italian court has issued its first decision on intellectual property rights breach through the unauthorized sale of NFTs. In fact, with the decision issued on July 20, 2022, the Court of Rome took a position on some of the recurring issues in the various NFT lawsuits pending in different jurisdictions.
The case at issue has been brought by a famous Italian football team against a company that marketed NFT digital playing cards depicting a well-known football player wearing the team’s uniform, thus using the distinctive signs (both word and figurative trademarks) of the team. The NFTs in question were sold on a well-known marketplace and in the secondary market through resale by first buyers, from whom the respondent company nevertheless continued to receive remuneration.
First, in rejecting the respondent’s defenses, the Court found that the use of the football club’s trademarks by the creators of the cards in question had a purely commercial purpose, as it could not be justified by the public interest in the publication of the player’s image in light of his fame nor by educational or scientific purposes. Indeed, the Court held that the fact that the player in question had played for the plaintiff team and had given consent for the use of his image on the cards did not exclude the obligation for the respondent company also to seek permission to use the distinctive signs of the team itself, since the fame of the team also contributed to the value of the digital image offered for sale with the NFTs.
Furthermore, the Court of Rome also ruled on the scope of protection of the trademarks registered by the football team, which according to the respondent, had not been extended to the classes relevant to the sale of NFTs. In fact, after pointing out that the signs in question undoubtedly enjoyed a reputation, the Court noted that the trademark registrations expressly stated (particularly for class 9, which is relevant here) that goods not included in the Nice Classification and downloadable electronic publications were covered. Crucial for the likelihood of confusion was that the team was already present in the field of crypto games or blockchain games, based on similar technologies, through its commercial agreements with third parties. Therefore, the Court concluded that the sale of NFTs by the respondent infringed the plaintiff’s trademarks, as it was likely to create in public the false impression that there was a commercial or group connection between the two companies.
For the same reasons, the decision held that the respondent’s conduct also constituted an act of unfair competition, including by misappropriation of values.
As to the measures granted, the Court largely upheld the football team’s claims, granting an injunction extended to the production, marketing, and promotion not only of the NFTs and content at issue in the pending lawsuit but also of any other NFTs, digital content and products, in general, bearing the photograph included in the contested cards (even modified) or the distinctive signs of the team. To this end, it was deemed irrelevant that the respondent had ceased the production and marketing of the NFTs since the contract for the use of the player’s image was in place until 2024, and users would still be able to resell the NFTs in the secondary market.
Therefore, the decision issued by the Court of Rome, in addition to clarifying the interpretation of the notion of “commercial use” and the scope of protection of registered trademarks, also confirms the suitability of the so-called “dynamic injunctions,” initially adopted to fight the unlawful streaming of protected contents, also about the NFT sector.
You can read the “Metaverse, NFTs and their legal issues guide from DLA Piper” on a similar topic.