Gucci v. Gucci Shops, Inc.

• Decision Date: 17 June 1988
• Docket Number: No. 83 Civ. 4453 (WCC).,83 Civ. 4453 (WCC).
• Citation: 688 F. Supp. 916
• Parties: Paolo GUCCI, Plaintiff, v. GUCCI SHOPS, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

688 F. Supp. 916

Paolo GUCCI, Plaintiff, v. GUCCI SHOPS, INC., Defendant.

No. 83 Civ. 4453 (WCC).

United States District Court, S.D. New York.

June 17, 1988.

Speiser & Krause, P.C., New York City (Joseph A. McManus, of counsel), and Blum Kaplan, New York City (Lawrence Rosenthal, Randy Lipsitz, Charles P. LaPolla, of counsel), for plaintiff.

Patton, Boggs & Blow, Washington, D.C. (Allan A. Tuttle, of counsel), and Gold, Farrell & Marks, New York City (Paul V. LiCalsi, of counsel), for defendant Gucci Shops, Inc., now Gucci America, Inc.

WILLIAM C. CONNER, District Judge.

OPINION AND ORDER

Since the time of Cain and Abel, family disputes have been marked by the irrational and impulsive decisions of those involved, the fierce battles which ensue, and the senseless destruction they cause. This case is but a skirmish in one of the most publicized family disputes of our time, among the heirs of Guccio Gucci, who founded the business empire which bears his name. It is recognized internationally as a manufacturer and retailer of high-quality leather goods and other fashion accessories and gift items. The Gucci family feud, which has raised legal issues currently being litigated before judges and arbitration panels throughout the world, at enormous cost to members of the family and the businesses they control, is also the focus of a recent best-selling book written by Gerald McKnight entitled Gucci: A House Divided.

In this action for declaratory judgment pursuant to 28 U.S.C. §§ 2201 and 2202, plaintiff Paolo Gucci seeks the Court's declaration that: (1) he has the right to use his name Paolo Gucci in the United States in his business of designing and developing products; (2) he may authorize third parties to use his name Paolo Gucci in connection with products designed by him or under his supervision; and (3) that such use of his personal name does not infringe the trademark or other proprietary rights of defendant Gucci Shops or otherwise compete unfairly with Gucci Shops. In addition, plaintiff has asserted causes of action for unfair competition and tortious interference with his business and contractual relations based on threats and allegedly unsupported claims by defendant which have effectively prevented plaintiff from proceeding with his business ventures.

Defendant Gucci Shops has counterclaimed against plaintiff for trademark infringement and dilution, unfair competition, breach of a 1972 Guccio Gucci, S.r.l. Shareholders Agreement, false designation of origin and abuse of process.

After a careful analysis of the evidence presented to the Court at a bench trial, for the reasons outlined below, plaintiff Paolo Gucci will be permitted to use his name in the manner described below to signify his participation in the design of products, but is prohibited from using the names Gucci or Paolo Gucci as a trademark or trade name. This opinion incorporates the Court's findings of fact and conclusions of law pursuant to Rule 52(a), Fed.R.Civ.P.

Background

Plaintiff Paolo Gucci is a citizen of Haiti and maintains an office and residence in New York City and a residence in England. Defendant Gucci Shops, Inc. (now Gucci America, Inc.) is a New York corporation having its principal place of business on Fifth Avenue in New York City. Defendant maintains a retail store on Fifth Avenue and additional retail stores throughout the United States. While the Gucci name is a well-known trademark throughout the world, Gucci Shops operates only in the United States.

Plaintiff was born in Florence, Italy on March 29, 1931. The name given to him at birth was Paolo Gucci and he has been known by that name throughout his life. Paolo Gucci's grandfather, Guccio Gucci, started a leather goods business under the name Gucci in Florence, Italy in the early 1900's. Guccio Gucci had three sons— Aldo, who is plaintiff's father, and Rodolfo and Vasco. Over the years, Aldo, Rodolfo and Vasco have been involved in the Gucci family business. Rodolfo and Vasco are deceased. Aldo Gucci has three sons—Paolo, Roberto and Giorgio. Rodolfo Gucci had one son, Maurizio Gucci. Vasco Gucci had no offspring relevant to this case.

The first Gucci store was located in Florence, Italy. In 1939, a Gucci store was opened in Rome and plaintiff's family moved to Rome and lived in a house in the back of the store. Aldo Gucci was responsible for operating the store. Plaintiff became formally employed at the Gucci store in Rome in 1952 as an assistant salesman. After approximately two years in Rome, plaintiff was married and moved back to Florence. After the move, plaintiff divided his time between the Gucci store in Florence and the Gucci factory in Florence.

Defendant Gucci Shops was organized in 1953 by members of the Gucci family in New York. Today, Gucci Shops is the owner in the United States of the trademark "GUCCI" and of the other Gucci trademarks it employs, and it sells "Gucci" products made in Italy and in Miami, Florida.

Gucci Shops has grown considerably over the past thirty years, and today it owns and operates 21 retail stores throughout the United States. An additional 13 retail stores and boutiques are operated in the United States by persons who have been granted franchises by Gucci Shops. In addition to the sales of "Gucci" merchandise at Gucci stores owned or franchised by Gucci Shops, "Gucci" merchandise is sold in hundreds of better department stores, jewelry stores and other retail outlets throughout the United States.

In 1953, plaintiff's grandfather Guccio Gucci died and the Gucci business was carried on by his sons Aldo, Vasco and Rodolfo. In 1983, Rodolfo Gucci died. Plaintiff's cousin Maurizio Gucci now controls 50% of the shares of Gucci Shops, which he received upon the death of his father Rodolfo. The remaining 50% is divided among plaintiff's father, Aldo, plaintiff's brothers Roberto and Giorgio, and a third party to whom plaintiff sold his shares. Plaintiff no longer holds any interest in any Gucci companies.

Plaintiff was employed by Guccio Gucci S.r.l. in various positions from approximately 1952 through September 1978. Despite vigorous attempts by defendant to refute plaintiff's contention that he was a designer and stylist of "Gucci" products, all of the credible evidence at trial, including defendant's own documents, established conclusively that Paolo Gucci was a designer and stylist of many Gucci products. Two former employees of Guccio Gucci who worked with Paolo Gucci, Sergio Cocchi and Massimo Filo Guarnieri, both testified that Paolo Gucci was the designer and stylist for Gucci. Indeed, according to their testimony, after Paolo Gucci left his position, the company promoted and hired a series of stylists who were intended to replace him but who were unable to maintain the unique Gucci image. This testimony merely confirmed what was evident from many of defendant's own internal documents—that Paolo Gucci was Gucci's chief designer and stylist.

In addition to his involvement in the design of "Gucci" products, Paolo Gucci has, at various times, been an officer director and employee of Gucci Shops, Guccio Gucci S.r.l. and Gucci Parfum Company. He was also a shareholder of either Guccio Gucci S.r.l. or Guccio Gucci S.p.A. continuously from February 24, 1972 to at least February 3, 1986.

The removal of Paolo Gucci from various positions he held at Gucci entities stemmed from friction which developed between Paolo and other family members. In the 1970's, Aldo Gucci managed the American Gucci Shops operation while Rodolfo Gucci was in charge of the Italian operation. Plaintiff's uncle, Vasco Gucci, was in charge of the Gucci factory in Florence. When Vasco Gucci died in 1974, plaintiff became head of the Florence factory while remaining chief designer for the company. By the mid-1970's, according to Paolo, Rodolfo's interference with Paolo's work as head of the factory and chief designer strained their relationship to the breaking point. On one occasion, when Rodolfo tried his hand at designing a handbag and then showed his work to Paolo, Paolo disgustedly threw it out the window. Shortly thereafter, during Paolo's presentation of the new Gucci collection to buyers, he was publicly upbraided causing him to stalk out, abandoning the presentation. This, according to defendant, led to Paolo's suspension.

In 1978, plaintiff's father Aldo invited plaintiff to come work with him at Gucci Shops in the United States. Plaintiff accepted this offer and moved to New York in early 1978 where he became Vice President of marketing for Gucci Shops.

Thereafter, plaintiff sought confirmation from Rodolfo in Italy that he retained his employment status with Guccio Gucci, S.r.l. to protect his employment benefits under Italian law. According to Paolo, litigation which he commenced to collect his severance pay led to the termination of his employment by the Italian Gucci company in 1978. Gucci Shops contends that Paolo was discharged for the additional reason of his alleged organization and participation in several companies in Haiti making handbags allegedly in competition with Gucci. Paolo maintains that this production was undertaken merely to assure a supply of high-quality merchandise for Gucci Shops.

After losing his job, plaintiff attempted to earn a living by exploiting his skill and experience as a designer. Having been denied his family's approval for his new venture, plaintiff commenced an action for declaratory judgment in federal court in the Southern District of New York seeking a declaration of his right to use his personal name as a trademark and also to identify himself as a designer. The Court dismissed that action for lack of a justiciable controversy because the record did not establish that any goods had yet been offered for sale under plaintiff's name. Paolo Gucci v. Gucci Shops, Inc., 81 Civ. 942 (LPG).

Following the dismissal of the lawsuit and various attempts at reconciliation, in June 1982 plai...