The Court of Brescia's Company and IP Specialised Division recently issued two landmark decisions that enhance the protection of trade secrets in Italy. The decisions coincide with Italy's implementation of the EU Trade Secrets Directive (2016/943/EC) through Legislative Decree 63/2018.
On 3 April 2018 the Court of Brescia granted the main claims filed by Wirtek and Atesina – which are part of the Link Group, a leader in the distribution of high-tech industrial tools on the Italian market – against Minetti, a competitor which hired nine of the claimants' employees and agents who had stolen a large amount of confidential commercial information. This was proven by an external expert's forensic investigation and confirmed by a description granted ex parte by the court, which found over 5,800 identical files on the competitor's premises.
The decision prohibited Minetti and the former employees and agents from using the stolen information and any elaborations derived thereof. Further, Minetti was barred from employing Wirtek's and Atesina's former employees and agents to market the products that they sold when they worked for the claimants. Further, the court issued a penalty of €20,000 for each violation and each day of delay in complying with the measures granted. The high penalty was intended to discourage future violations. Under Italian law, penalties are paid to the rights holder and added to the damages.
The order referred to what had already been set out in the ex parte decree and highlighted in particular that stolen information, even if commercial rather than technical, remains protected by Article 98 of the Industrial Property Code (which is consistent with Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement). The court also found that the evidence, which had been quickly assessed by two court-appointed experts, confirmed that trade secrets had been stolen. The use of this evidence-protection instrument, therefore, proved decisive and took precedence over IP matters.
The scope of the injunction granted was specified and extended by a second order of 6 June 2018 in the appeal proceedings before a panel composed of three judges (which did not include the judge who had issued the first order). The court ordered Minetti not to sell the products at issue to the claimants' customers until 31 December 2018, regardless of whether Minetti used the former employees and agents as sellers. The scope of the injunction was therefore extended and made particularly effective. Further, the second order expressly held the defendant liable for:
- unfair competition;
- employee diversion;
- trade secret subtraction; and
- the use of stolen confidential information to acquire customers whom they would not otherwise have been able to reach by making appropriate personalised financial offers in such a short period.
The court also rejected the defendants' argument that the former employees and agents knew the customers and prices charged to them because they had been notified to calculate the variable part of their salary.
The claimants replied by pointing out that the violation of trade secrets occurs even when such information is used for purposes other than the legitimate reason for which it was disclosed. In this context, the claimants recalled Article 39 of the TRIPs Agreement, under which the following is true:
A manner contrary to honest commercial practices [to which Article 39 refers] shall mean at least practices such as breach of contract, breach of confidence and inducement to breach, and includes the acquisition of undisclosed information by third parties who knew, or were grossly negligent in failing to know, that such practices were involved in the acquisition.
The Court of Brescia's recent decisions confirm the high level of protection afforded to trade secrets in Italy, which are considered to be a form of intellectual property and benefit from protection under the EU IP Rights Enforcement Directive (48/2004/EC). Notably, Italy has strictly limited the implementation of the EU Trade Secrets Directive to the mandatory provisions and those that strengthen the protection of trade secrets.
For further information on this topic please contact Cesare Galli at IP Law Galli by telephone (+39 02 5412 3094) or email ([email protected]). The IP Law Galli website can be accessed at www.iplawgalli.it.
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