Case Summary and Outcome

The Italian Supreme Court held that intellectual property rights may be subject to limitations and exemptions by a parody of the original, protected work. After a company argued that an advert involving a parody of its eponymous fictional character “Zorro” violated its rights, the lower courts had ruled in the company’s favor holding that a parody had to be substantially different from the original. The Supreme Court overturned the lower court decision on the ground that it had disregarded the EU Directive 2001/29/EC; Art. 70 L. 633/1941 which allows parody and only identifies unfair practice as the limit to it. The Supreme Court stressed that national and European law required a balance between the rights to freedom of expression and intellectual property, and that the mere use of a parody cannot be seen as an infringement of intellectual property. The decision established that parody consists of a mocking or humorous act which makes explicit reference to an original work (including a fictional character), and the parody shall not be in breach of the right-holders interest, e.g., shall not result in the engagement with unfair practices on the market.

Facts

In 2007, the Italian production company, Zorro Production Inc., brought an action against CO.GE.DI International Compagnia Generale Distribuzione s.p.a., claiming to be the holder of the right of economic exploitation of the fictional character Zorro and related works. Zorro had been invented by Johnston McCulley in 1919. CO.GE.DI had used the character in a radio and television advertisement for Brio Blu mineral water.

Zorro Production sought an order declaring their position as right holder and a breach of its rights because of the possible confusion from CO.GE.DI’s use, and the unlawfulness of any profit generated by CO.GE.DI. In the alternative, Zorro sought a declaration on the breach of rules of fair competition. It sought damages of 20 000 euros and that broadcast of the advertisement be ceased immediately.

CO.GE.DI argued that any work of the author created prior to 1951 had become public domain.

The Court of First Instance in Rome found in favour of Zorro Production and declared that CO.GE.DI had in fact breached Zorro Production’s rights. Both parties appealed the decision.

The Court of Appeals of Rome overruled the decision holding that the character of Zorro had become public domain. However, on appeal the Supreme Court remanded it back to the Court of Appeals of Rome. In November 2018, the Court of Appeals ruled that the use of a fictional character, even in the form of the parody, had to be considered a breach of the holder’s intellectual property rights. The Court found that CO.GE.DI’s representation of the character lacked the originality and creativity that would have distinguished it from the original one. The Court found that Italy had not domesticated Article 5(3)(k) of Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society which allows Member States to provide for exceptions and limitations to the rights of the rights-holder “for the purpose of caricature, parody or pastiche”. Even though it had not found a breach of competition law rules, the Court ordered CO.GE.DI to publish a “reparatory message” in three national newspapers.

CO.GE.DI appealed the decision to the Supreme Court.

Decision Overview

The Supreme Court delivered its decision. The central issue for the Court’s determination was the relationship between the protection of parody under the right to freedom of expression and intellectual property rights.

GO.GE.DI focused on the balance that should be struck between the right to freedom of expression (in the form of parody) and intellectual property rights. CO.GE.DI argued that its rights to freedom of expression under Article 21 of the Italian Constitution had been violated. It submitted that a parody does not require an original elaboration of the work as its very nature is to imitate and make an impression of such work. It argued that the exception in Article 5(3)(k) of Directive 2001/29/EC, which allows parody (“eccezione di parodia”) is already part of Italian law, because of established case law on the topic. CO.GE.DI submitted that the EU Directive does not condition the lawfulness of a parody on the absence of profit-making.

The Court defined a parody as a re-elaborated version of a work whose aim is critical, satirical, and humorous. Its main feature is that it takes as a reference an original piece of work (e.g., as in this case, a fictional character) and it departs from it to convey a different message than the one of the original work. The Court noted that the very nature of the parody differentiates it from mere plagiarism and that referring to the original work does not preclude a parody’s original and creative contribution, because without that reference, it would not be possible to achieve the critical, satirical, and humorous objective.

The Court observed that a parody cannot be considered only a “creative elaboration” of the original work (regulated under Article 4, Law n. 633/1941); the parody version of the work does not entail a continuum with it, but rather its radical and conceptual change. This means that the parody departs from the original. It noted that, if a parody was considered a creative elaboration of the original, its use aimed at profit-making would need to be approved by the author of the work that is being mocked. The Court stated that not only is it not plausible that an author would authorize it, but that this would put at risk the very survival of the parody and would interfere with the constitutional right to freedom of expression.

The Court stated that the parody’s lawfulness in relation to intellectual property rights is established by Article 70 of Law n. 633/1941. This expressly allows the use (in the form of, for instance, citation and reproduction) of a work for the purpose of discussion and critique, provided that such use is not in competition, on the market, with the use of the original work. The Court found that the representation of Zorro as a buffoon by CO.GE.DI in the advertisement fell within the scope of Article 70.

In applying European Union law on the balance between freedom of expression and intellectual property, the Court referred to the Court of Justice of the European Unions’s (CJEU) findings that the right to intellectual property (protected under Article 17(2) of the Charter of Fundamental Rights of the EU) is not “intangible” and “absolute”. The Court also quoted Article 5(3)(d) of Directive 2001/29/EC which provides that: “Member States may provide for exceptions or limitations to the rights provided for in Articles 2 and 3 [exclusive reproduction right and right of communication to the public of works and right of making available to the public other subject-matter of the right holder] in the following cases: … (d) quotations for purposes such as criticism or review, provided (…) that their use is in accordance with fair practice, and to the extent required by the specific purpose”. Paragraph 5 adds that the limitations to the rights reproduction and communication of the right holder shall not “unreasonably prejudice [the latter’s] (…) legitimate interests”.

The Court noted that the Court of Appeals had assessed CO.GE.DI’s use of Zorro by applying different conditions than those established by positive law, and had not applied EU and national law correctly. The Court of Appeals had described the representation of Zorro as mere imitation, lacking an original and creative elaboration of the original. The Court held that the Court of Appeals had ignored the CJEU principles that  a parody necessarily entails a reference to the original work, while at the same time offering a critique of it, and in finding CO.GE.DI’s parody as unlawful it had disregarded the EU Directive 2001/29/EC; Art. 70 L. 633/1941 which allows parody and only identifies unfair practice as the limit to it.

Accordingly, the Court overturned the Court of Appeals decision, on the lawfulness of parody and returned the case to the lower courts to determine whether, in practice, CO.GE.DI had violated Zorro Production’s right: the Court emphasized that the mere use of a parody does not breach intellectual property rights.

The Italian Supreme Court held that intellectual property rights may be subject to limitations and exemptions by a parody of the original, protected work. After a company argued that an advert involving a parody of its eponymous fictional character “Zorro” violated its rights, the lower courts had ruled in the company’s favor holding that a parody had to be substantially different from the original. The Supreme Court stressed that national and European law required a balance between the rights to freedom of expression and intellectual property, and that the mere use of a parody cannot be seen as an infringement of intellectual property. The decision established that parody consists of a mocking or humorous act which makes explicit reference to an original work (including a fictional character), and the parody shall not be in breach of the right-holders interest, e.g., shall not result in the engagement with unfair practices on the market.

The Italian Supreme Court held that intellectual property rights may be subject to limitations and exemptions by a parody of the original, protected work. After a company argued that an advert involving a parody of its eponymous fictional character “Zorro” violated its rights, the lower courts had ruled in the company’s favor holding that a parody had to be substantially different from the original. The Supreme Court stressed that national and European law required a balance between the rights to freedom of expression and intellectual property, and that the mere use of a parody cannot be seen as an infringement of intellectual property. The decision established that parody consists of a mocking or humorous act which makes explicit reference to an original work (including a fictional character), and the parody shall not be in breach of the right-holders interest, e.g., shall not result in the engagement with unfair practices on the market.

The Italian Supreme Court held that intellectual property rights may be subject to limitations and exemptions by a parody of the original, protected work. After a company argued that an advert involving a parody of its eponymous fictional character “Zorro” violated its rights, the lower courts had ruled in the company’s favor holding that a parody had to be substantially different from the original. The Supreme Court stressed that national and European law required a balance between the rights to freedom of expression and intellectual property, and that the mere use of a parody cannot be seen as an infringement of intellectual property. The decision established that parody consists of a mocking or humorous act which makes explicit reference to an original work (including a fictional character), and the parody shall not be in breach of the right-holders interest, e.g., shall not result in the engagement with unfair practices on the market.