The Italian Supreme Court applies Cofemel, finding that Kiko's store layout qualifies for copyright protection

Like a final played behind closed doors, the last phase of the lengthy match between the cosmetics manufacturer Kiko and its competitor Wycon relating to the design of their stores has just come to an end during the lockdown.

The Italian Supreme Court has confirmed that the Milan Court of Appeal had correctly upheld the first-instance judgment – that Kiko's store layout qualifies for copyright protection as an architectural work and that competitor Wycon infringed that copyright by reproducing the key elements of Kiko stores. In doing so, the court applied the CJEU's Cofemel decision.

The dispute between Kiko and Wycon

Kiko stores are spread throughout Italy and abroad and are characterised by an original project: the layout encompasses a series of inclined side display units that run along the store walls seamlessly; a front door with two large backlit graphics; “islands” having curvilinear edges placed at the centre of the shops containing products and used as surfaces; a particular combination of colours (white, black, pink/purple) and disco-effect lights. This unusual layout was designed by a well-known architect firm and is the subject of a number of registered Community designs.

After having unsuccessfully trying to enforce the registered Community designs against several competitors, Kiko went to the Court of Milan to try to stop Wycon from imitating its stores by claiming copyright infringement of its store layout as an architectural work.

Both the Milan Court of First Instance and the Court of Appeal ruled in favour of Kiko, following the recent Italian case-law which grants copyright protection for architectural works not only to buildings and embedded furnishings (fittings, floors and lighting), but also to interior design projects, i.e. a combination of moving elements, chosen and displayed in a manner that expresses the personality of the author (creative character). In both decisions, the Courts confirmed that Kiko concept stores were sufficiently creative and that Wycon misappropriated the Kiko project.

The story did not finish there, as Wycon appealed to the Supreme Court. Wycon claimed, in particular, that the Kiko store layout could not be protected as an architectural work under Italian Copyright Law (ICL)  as it was not related to a specific area and that only the individual furniture elements might theoretically deserve protection, provided that they met the "artistic value" requirement.

The Italian Supreme Court decision

The Italian Supreme Court issued its decision on 30 April 2020, substantially upholding the decision of the lower courts and in doing so has stated some important principles in terms of the protection of a store layout.

The Court clarified that a store layout may deserve IP protection from a number of different perspectives: as an architectural work under Article 2.5 ICL; as an industrial design under Article 2.10 ICL, for the single elements comprising it; as an engineering project constituting the original solution of a technical problem, subject to a more limited protection as neighbouring rights pursuant to Article 99 ICL; and as a trade mark (e.g. the Apple stores, CJEU C−421/13).

In terms of protection of a store layout as an architectural work, the Italian Supreme Court set out the following principle: "an architectural work must always be identifiable and recognisable via its formal expression as a unitary work of the author, as a result of the specific choices of the composition of all its elements (for example, the colour of the walls, particular lighting effects, the repeated use of specific decorative items, size and proportions). Indeed, the exclusivity is granted to the composition as a whole, the unitary work concerning the space organization, the overall use of the interior design elements according to the unitary design" (free translation); where such a "unitary project" shows "a clear stylistic key", then the internal design “deserves copyright protection as an architectural work pursuant to Article 5.2 ICL, it being irrelevant whether the individual furniture elements are incorporated to the building or whether they are simple or commonly used elements in the interior design sector, as long as the project is the result of an original combination and not a mere solution of a technical-functional problem" (freely translated). In a nutshell, the concept of a store – to be intended as a project outlining the essential design elements of a store without necessarily relating to a specific area – deserves copyright protection as long as it expresses a (minimum) level of creativity.

This decision has also seen the Italian Supreme Court, for the first time, apply the principles set out by the CJEU in the Cofemel case (C-683/17) in relation to the cumulative protection via design rights and copyright. The Supreme Court, quoting the CJEU’s decision, confirmed that the two systems of protection have different scopes, hence are not mutually exclusive: on the one hand, the purpose of designs is to protect “subject matter which, while being new and distinctive, is functional and liable to be mass‑produced" and such protection must be applied “for a limited time, but sufficient time to ensure a return on the investment necessary for the creation and production of that subject matter, without thereby excessively restricting competition or its part”; on the other hand, “the protection attached to copyright, the duration of which is significantly greater, is reserved to subject matter that merits being classified as works”, i.e. objects (i) that are identifiable with sufficient precision and objectivity and (ii) that reflect the personality of the author (creative character or originality).

According to the Supreme Court, in line with the Cofemel decision, the originality required for the copyright protection of a design "does not mean that the design must generate a specific, aesthetically significant visual effect”. However, the Court did not comment on the issue of the "artistic value", which is a requirement that only industrial designs must meet in order to be awarded copyright protection under ICL. According to settled case law, such an artistic value exists where a design has an expressive value that goes beyond the mere functional purpose of said object; it is the expression of artistic or cultural influences: the existence of the artistic value must be assessed by referring to the acknowledgments the design received from the cultural environment (for example, exhibitions in museums or art exhibitions, mentions in art books, etc.). That level of evidence is particularly difficult to provide, hence it has been very difficult for industrial designs to be awarded copyright protection in Italy.  In light of the Cofemel decision, if the "artistic value" was considered an additional requirement to the originality and the identifiable expressive form for a design work in order to be awarded copyright protections, then it would be contrary to  EU law. Unfortunately the Supreme Court has not clarified this crucial aspect.

In conclusion, the Italian Supreme Court confirmed that the Milan Court of Appeal reasoning was correct when it awarded Kiko stores copyright protection and confirmed infringement. However, the Court upheld Wycon's appeal in relation to the acts unfair competition claimed by Kiko (imitation of the shop assistants’ clothing, bags and packaging) and the award of damages for copyright infringement, which will now be reassessed by the Milan Court of Appeal.

This decision is very important indeed as it has definitively clarified the concept store protection criteria for a store concept in copyright law.

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