Edited by Ilaria Gargiulo, Partner, and Camilla Pasino, AMTF Lawyers
Abstract
The transfer of a business, especially when it involves a company with a long-standing tradition, raises complex issues, foremost among which is the question of the fate of the company name and other distinctive signs associated with the business. Among these, the so-called de facto trademark is of particular importance: a sign that is not formally registered but has become recognizable to the public through prolonged use over time, and thus possesses significant economic value. In a recent ruling, the Court of Cassation addressed this issue, clarifying the effects of the business transfer on such a mark and defining the boundaries between the purchaser’s rights and any claims by the founder’s heirs.
Background
The complex legal proceedings that led to the Supreme Court’s Order No. 21855 of June 19, 2025, provide a paradigmatic insight into the dynamics of the circulation of distinctive signs and the limits on the use of a patronymic (or nickname, in this case) in business activities.
The dispute stems from a restaurant business founded in 1963 and subsequently transferred to new owners in 1977. The new owners then formed a company and continued the business using a name nearly identical to the original one, which over time had come to serve as the business’s distinctive mark, even though it was not registered as a trademark. Specifically, at the heart of the dispute is the historic Ligurian restaurant in Portofino, “Da ö Batti,” and the nearly identical “Da ö Battj 1963,” established by the son of the founder of the former in the neighboring town of Santa Margherita Ligure in 1984 and, in turn, focused on Ligurian cuisine.
According to court rulings, the original company, associated with the Portofino restaurant, was sold on March 31, 1977, by the founder’s wife (known to the public by the nickname “Batti”) to the parties who filed the lawsuit in 2020. The latter, after decades of uninterrupted use of the figurative mark “RISTORANTE PORTOFINO DA O BATTI” (“Trademark”), formally registered it with the UIBM in 2019; however, in 2018, the company linked to the heir of the restaurant’s founders had already registered the name “BATTJ” as a trademark. This led to a lawsuit filed by the company owning the Portofino restaurant, seeking a declaration of invalidity of the trademark registered by the heir due to lack of novelty—as it is confusingly similar to the unregistered trademark acquired with the business in 1977, which had been in use since that date and thus predated 2018—as well as an injunction against the use of the name.
1. First Instance – Court of Genoa
In its judgment No. 2605/2021, the Court of Genoa granted in full the claims of the owners of “Da ö Batti” in Portofino, relying on legal principles that may prove useful in the management and protection of the business.
The “strong” trademark as the “safe” of the company’s goodwill. The Court classified “DA O BATTI” as a strong trademark, that is, as a non-generic sign devoid of any descriptive connection to the service offered. The name says nothing about the restaurant business or Ligurian cuisine: it identifies that restaurant exclusively, in an arbitrary and novel way. This characteristic confers particularly broad protection: simply changing a letter—from “i” to “j”—or adding a date—1963—is not sufficient to circumvent infringement. If the core of the trademark remains the same, the risk of confusion for the consumer is deemed to persist. The overlap between “RISTORANTE PORTOFINO DA Ö BATTI” and “DA Ö BATTJ 1963” is substantial: considering that the terms “RISTORANTE PORTOFINO” and “1963” are descriptive or generic, the difference between the other parts of each mark, which are more distinctive, is imperceptible in pronunciation and irrelevant in visual perception.
The year 1963: an aggravating factor, not a mitigating one. The defendant company, Da ö Battj 1963 S.n.c. di Costa Giovanni e C. (“Costa”), had added the year 1963 to its name—a date preceding the 1977 transfer of the business. Rather than distinguishing between the two establishments, the Court interpreted this addition as an “aggravating” factor in the infringement: a consumer seeing the date 1963 would naturally be led to believe they were at the original establishment, the “true heir” to the tradition, since that date predates the acquisition of the Portofino restaurant by the current owners, Da ö Batti di Foppiano Giancarlo & C. S.n.c. (“Foppiano”), which took place in 1977.
Relation to the right to a name. Article 21 of the Industrial Property Code (Legislative Decree No. 30/2005) provides that the owner of a registered trademark may not prohibit third parties from using their name or address in the course of economic activity (provided such use complies with the principles of professional fairness), where such third parties are natural persons. The family connection between the legal representative of the defendant company, Costa, and the original founders of the restaurant “U Bacci” in Portofino—which was subsequently sold to the plaintiff Foppiano in 1977—was not deemed by the Court of Genoa to establish a right to the patronymic on the part of Costa. In fact, the Court observed that the name “Batti/Bacci” is a common nickname in the Liguria region, which, in the context of the “DA Ö BATTI” trademark, appears to be simply a fictitious name chosen by a restaurateur (in addition to not being the heir’s actual name, who, moreover, operates through a company and therefore a legal entity, ed.).
Any prior use of the Trademark by Costa was not, however, deemed relevant, as the Court, citing established case law, pointed out that “The transfer of a business unit relating to the production of certain products entails the transfer of all components pertaining to that unit, and therefore also of the trademark identifying the products, given the close link between the trademark and the business (see Art. 2573, para. 2 of the Italian Civil Code)” (Court of Trieste, Special Business Section, June 25, 2014). In other words, where there is a transfer of the business, or part thereof, the transfer of the trademark relating to the transferred activities is “automatic.”
In light of the foregoing, the Court of Genoa has therefore ordered Costa to: an immediate injunction against the use of the Trademark in any form (signage, business name, website, social media, advertising material), a penalty of 200 euros for each day of delay in complying with the order, publication of an excerpt from the judgment in Il Secolo XIX at the defendant’s expense, and an order to pay legal fees.
2. Appeal — Genoa Court of Appeals
Dissatisfied with the ruling, Costa filed an appeal. The Genoa Court of Appeals issued its decision in Case No. 650/2024 on May 3, 2024, fully upholding the lower court’s ruling and clarifying a crucial point for anyone buying or selling a business.
The burden of proof regarding prior use. On appeal, Costa pointed out that the expression “Da ö Battj” was already part of his business name, which had been in existence and operational since 1984. In Costa’s view, this fact constitutes proof of its prior use of the trademark starting in 1984—therefore prior to Foppiano’s 2019 registration—which Foppiano itself never contested until 2020. Costa, therefore, asserted that she was entitled to continue using her trademark within the limits in which she had previously used it, taking into account the local geographic scope and the nature of the products and/or services offered. In fact, Costa noted, Article 2571 of the Italian Civil Code establishes that“anyone who has used an unregistered trademark has the right to continue using it, notwithstanding registration obtained by others, within the limits in which it was previously used.” Furthermore, Costa argued that Foppiano’s registration was invalid because it was subsequent to its own.
The Genoa Court of Appeals, with regard to the foregoing, observed that, although Costa’s Chamber of Commerce registration bears the phrase “Da O Battj 1963” (which, incidentally, was submitted at the trial court level by Foppiano, as Costa had failed to appear), it would nevertheless not be sufficient to prove Costa’s use of that distinctive sign since 1984 and, therefore, Costa had failed to adequately prove its prior use of the trademark. Regarding the objection of invalidity of Foppiano’s trademark registration, the Court of Appeal found that the objection was filed too late.
The Key Principle: Article 2573 of the Civil Code. The law (Article 2573, Art. 2573 of the Civil Code) establishes that a trademark—including a de facto trademark, i.e., one not formally registered but already recognizable in the market, as was the case with the Trademark prior to 2019—when consisting of a figurative sign, a fancied name (as in the present case), or a derived trade name, is presumed to be transferred together with the business. A separate deed of trademark transfer is not required: it occurs by operation of law, as an integral part of the business entity. At the same time, as indeed supported by other established case law on the matter, the Court ruled that an agreement to the contrary between the parties is still possible, whereby they could stipulate that the trademark is not subject to transfer, or at least this could be inferred from the terms of the agreement between the parties themselves. In the present case, in 1977, the founding family of the Portofino restaurant sold the restaurant itself without reserving any rights to the name “Batti” or to the Trademark as a whole. From that moment on, the Trademark has belonged to the transferees. Family lineage may justify a sense of emotional attachment to the restaurant’s history, but it does not create any legally enforceable right to use that name for a competing business.
3. Supreme Court Ruling: Further Confirmation of Legal Principles Regarding the Transfer of a Business and the Right to Use a Trade Name
The case concluded with Order No. 21855 of July 29, 2025, issued by the Supreme Court, Civil Section I, which rejected Costa’s appeal and definitively established all the principles expressed in the two previous instances, in addition to providing significant food for thought regarding the limitations on protection faced by those who do not appear in court.
First, the Supreme Court reaffirmed that a de facto trademark is transferred along with the sale of the business, rendering any subsequent registration of the same mark by the transferor or his heirs null and void due to lack of novelty. The appellant (Costa) had not demonstrated any prior use of the trademark dating back to 1984, nor any agreement with the transferee, Foppiano, that reserved his right to continue using the name.
In substance, the Supreme Court confirmed the correct application of Article 2573 of the Italian Civil Code, establishing the principle that a de facto trademark intended to distinguish the services of the transferred business is transferred along with the business, unless there is evidence to the contrary regarding the parties’ intention to exclude it from the transfer. In the case at hand, such contrary evidence had not been provided. The Court of Cassation also reaffirmed the prohibition, established by Article 22, paragraph 1, of the Italian Industrial Property Code, against adopting as a trade name, designation, or corporate name a sign that is identical or similar to another party’s prior trademark, where this could give rise to a risk of confusion for the public.
From a procedural standpoint, however, the order addressed the issue of preclusion arising from Costa’s failure to appear in the first-instance proceedings. In fact, Costa had not appeared in the first-instance proceedings and, therefore, had not had the opportunity to specifically contest the facts as presented by Foppiano, including Costa’s alleged prior use of the Trademark from 1984 onward and the fact that the company had been sold to parties other than Foppiano. Consequently, the Court of Appeals had not ascertained these circumstances, and Costa chose to challenge this failure to ascertain them before the Court of Cassation. In this regard, the Court of Cassation established the principle that the burden of specifically contesting the facts under Article 115 of the Italian Code of Civil Procedure lies exclusively with the court of first instance, from which it follows that a defendant who was in default in the first-instance proceedings cannot subsequently complain that his objections to Foppiano’s claims were not taken into account by the Court of Appeal in an attempt to call into question the facts alleged by the plaintiff and established by the first-instance court on the basis of the evidence provided.
According to Costa, since it is an undisputed fact that there was a period of “peaceful coexistence” regarding the use of the respective trademarks from 1984 to 2020,“the Court of Appeal should have, pursuant to Article 115 of the Italian Code of Civil Procedure, based its decision on this circumstance and consequently should have granted the appellant company the protection under Article 2571 of the Italian Civil Code in relation to the trademark registered in 2019 by the respondent, acknowledging the existence of a ‘duopoly’ between the de facto trademark and the subsequently registered trademark.” However, this peaceful coexistence had not been raised as a factual circumstance by Costa at the trial court level and was introduced only on appeal, where it was not contested by Foppiano. Nevertheless, the Court of Cassation observes that only at the trial court level may the judge base his decision on facts not contested by the defendant, so that this cannot be required of the Court of Appeal.
Conclusions and Points for Reflection
Given the grounds for the dismissal of all the individual grounds of appeal to the Court of Cassation raised by Costa, one cannot help but wonder whether the outcome of the case would have been different had Costa appeared in court at the first instance, rather than remaining in default at that stage.
In particular, the question arises as to whether, had Costa been able to prove her claim of prior use of the trademark since 1984, she would have been permitted to continue using it despite the sale of the business in 1977, thereby requiring the court to rule on the conflict between the undisputed use of the de facto trademark and its prior transfer. Furthermore, among other things, Costa would have had to prove her claim that the company was inactive at the time of the sale and that, for this reason, the trademark had not been transferred at the same time; in such a case, the judges would have been required to rule on that circumstance as well. Therefore, it is considered that the rulings discussed here do not provide all the clarifications one would hope to draw from such a complex case and thus represent (through no fault of the judges) a missed opportunity in this regard.
Notwithstanding the above, we can still draw important lessons from this case:
- Register your trademark immediately. A de facto trademark is protected by law, but defending it is more complex and costly. Registration with the appropriate office grants rights that are enforceable against all parties, simplifies the burden of proof, and strengthens the owner’s position in any legal dispute;
- the importance of the trademark’s distinctiveness. The more creative the trademark is and the further it is from a description of the product or service, the broader the protection it will receive;
- handle business transfers with care. If you are purchasing a business, you should always verify that the trademark is explicitly mentioned in the contract and that its future is clearly defined (is it being transferred to the buyer, or does it remain with the seller?);
- Never ignore a summons to court, and keep a close eye on your certified email and regular mail. Receiving a court document is an event that requires an immediate response. As the “Da o Batti” case clearly demonstrates, failing to appear at the first-instance trial irreversibly compromises your defense in all subsequent proceedings.
