Italian Supreme Court redefines ‘parody’ in 15-year ad dispute

The Italian Court of Cassation has established the boundaries for parody use in relation to others’ IP rights in a commercial (order 38165/2022, 30 December 2022) that provides valuable guidance for future cases.

The case involved a television commercial, in which Italian actor Max Tortora was dressed as the fictional character Zorro to promote a popular brand of mineral water. This advertisement incorporated elements of parody and was the subject of a 15-year legal dispute.

The American company Zorro Production holds the rights to the character of Zorro, both as a copyrighted work and as trademarks. In 2007, the company filed a lawsuit against the Italian company that aired the commercial, CO GE DI, before the Court of Rome, alleging a violation of its IP rights.

The defendant claimed that it used the trademark and copyright in a parodic manner and therefore this use did not constitute a violation of the plaintiff’s rights.

In the first instance, the court ruled in favour of the American company, recognising both the violation of copyright and the infringement of trademarks by the defendant.

However, the Court of Appeal of Rome overturned the first-instance ruling and rejected all of the plaintiff's claims. It deemed that the character of Zorro had fallen into the public domain.

After setting aside the Court of Appeal’s ruling, the Court of Cassation excluded the issue of falling into the public domain claimed by Zorro Productions. The court also recognised the grounds for appeal, which disputed the omission to rule on the requests aiming to determine violation of exclusive rights of the Zorro character trademarks.

The case was then resumed before the Court of Rome, which handed down a judgment on 24 November 2018. This stated that in summary, the imitation of a fictional character that is known to be associated with literary and artistic works and whose rights are held by others cannot be considered lawful merely because the advertising spot consisted of a simple parody. In the present case, no elaboration of an original work presented a recognisable creative contribution from the author to promote its new ideas or messages to the public.

The defendant – and, incidentally, the plaintiff – challenged the decision again, and the Court of Cassation partially allowed the appeals and remanded the case back to Rome’s Court of Appeal.

The court's decision provides a legal definition of ‘parody’: a humorous or satirical act that does not require its own originality other than the presence of perceptible differences from the work or character being parodied.

The court also explains that to be lawful, a parody must respect a fair balance between the original owner’s rights and the parody author’s freedom of expression. In this sense, the use of protected content can be justified within the limits inherent to the parodic purpose, provided that the parody does not prejudice the original owner’s interests (eg, by competing with the economic use of the original work).

As far as trademark infringement is concerned, the court’s order clarifies that if a mark’s reputation is established, its use would be illicit because it would be done in an economic activity. The court held that it is irrelevant whether the trademark is physically used to mark the product, so long as it is used in a narrative manner that is capable of associating the trademark’s advantages with the parodied work. The court further elaborated that the exploitation of another's trademark is prohibited if it allows the unauthorised party to benefit from the trademark’s distinctive character or reputation, or causes prejudice to the trademark. This is regardless of whether the trademark is used to distinguish the products or services of the author of the use. The court also found it to be irrelevant that the character Zorro did not drink the advertised water in the commercial, and that his name and image were not incorporated into the product’s packaging.

The Italian Supreme Court’s recent decision sheds light on the legal definition of parody and its limitations, particularly in relation to the use of well-known trademarks. The court reaffirmed that a parody must respect a fair balance between the author's freedom of expression and the rights of the original work's owner and clarified that the use of a trademark without a justifiable reason in economic activities (that allows for undue advantage or harm to the original trademark's distinctiveness or reputation) is unlawful. Therefore, it is essential for creators of parodies to be aware of these legal limits in order to avoid any potential legal repercussions.

The end of this legal saga is not yet in sight. We will just have to sit back and wait for the Court of Appeal’s decision and even after that, we can only cross our fingers and hope that the Supreme Court, which will undoubtedly be involved again, will eventually issue a final verdict.