In the world of funeral services, the recent Taffo family trade mark dispute in Italy has drawn significant attention. The Court of Rome ruled against several “TAFFO” trade marks, citing bad faith in their registration. This case offers critical lessons for businesses dealing with family-owned trade marks and de facto brand ownership.

The Taffo Family Trademark Dispute

The Taffo family is well-known in Italy for providing funeral services for almost a century. They are also known for advertising their activity with ironic and irreverent posts. Founded by Mr. Gaetano Taffo, the funeral home has since been inherited by Mr. Taffo’s four children, who run the business together with two of his nephews.

Eventually, however, familial ties became strained when a few of Mr. Taffo’s children (“Plaintiffs”) sued the companies Atlante s.c.s. and Agenzia Funebre Taffo di Taffo G & C S.A.S. (owned by the two nephews - “Defendants”) before the Court of Rome. The Plaintiffs claimed, among other things, that Defendants infringed their EUTM word trade mark “TAFFO” as well as the following Italian figurative trade mark: 

Defendants appeared in Court, seeking – inter alia - the rejection of the opposing claims. They sought to invalidate both trade marks on the grounds that they were filed in bad faith.

Skeletons in the Closet: The Origins of the Family Dispute

After Mr. Taffo’s death, his children and nephews initially agreed to jointly use their de facto trade mark “TAFFO” as part of running the business together.

However, due to increasing tensions within the family, the parties agreed in 2016 to split the company and regulate the use of their de facto trade mark. This was governed by a settlement agreement reached between the parties.

So far, nothing special. But here’s the thing: before the settlement agreement was reached, the Plaintiffs had already and unilaterally registered the sign “TAFFO” before the Italian Trademark Office (in 2012) and EUIPO (in 2015), designating themselves as exclusive owners, without informing the current Defendants of such registrations.

The ruling on bad faith: deadly for trade marks 

The Court focused its reasoning on the invalidity of the trade marks relied upon for the Plaintiffs’ infringement claims. Indeed, according to Art. 19 Italian IP Code and Art. 59 (1)(b) of Regulation 2017/1001, a trade mark registration is invalid if the application is filed in bad faith.

The Court, quoting EU case-law, explained that “the concept of bad faith requires the presence of a dishonest state of mind or intention” (T-251/21).

In IP matters, bad faith generally exists when someone has legitimate interests in using a sign and another party - being aware of such interests - anticipates it in registration to prejudice the other’s expectations.

Given the above principles, the Court identified several elements proving that Plaintiffs were fully aware of the prejudice caused to the other family members by the registration of the above Italian and EU trade marks. In particular:

1.    Plaintiffs and Defendants jointly used the de facto trade mark “TAFFO” for years, with full knowledge and acquiescence by all. 
2.    Despite this, in 2012 and 2015, Plaintiffs unilaterally registered the above trade marks, designating themselves as exclusive owners, with the clear intention of excluding the other members of the family from use. 
3.    Plaintiffs did not inform the rest of the family in advance of their intention to file the application.
4.    In fact, the 2016 settlement agreement, which was aimed at regulating the use of the de facto trade mark “TAFFO”, confirms that Defendants were unaware of such registrations.

In light of all the above, the Court concluded that Plaintiff’s filings were made in bad faith, leading to the invalidity of the trade marks.

It seems appropriate to say… R.I.P. “TAFFO” trade marks
 

Final thoughts

The ruling, in addition to confirming a streamlining of principles already established by national and European case-law, offers some guidance both on de facto trade marks and bad faith.

On the one hand, when dealing with de facto trade marks, it is generally advisable to contractually provide for the powers granted to each owner / licensee. Specifically, where such marks form the core of a commercial partnership, this case underscores the importance of expressly addressing the right to register by way of a written agreement. Neglecting this can open business partners to the risk of being burned by the nasty surprises, however close they may have been before.

On the other hand, such decision serves as a further reminder to all applicants interested in getting a trade mark registration: bad faith doesn’t pay!