Three delegation laws established by the European Delegation Act 2016 to 2017 (2017/163) are set to introduce changes to key IP matters.(1) The delegation law concerning the implementation in Italy of EU Directive 2016/943/EC on the protection of undisclosed know-how and business information will be particularly complex. The directive sets out a level of protection that is inferior to that applied at present in Italy. As a result, only the directive's mandatory provisions will be implemented. Equally important, but no less complex, is the implementation in Italy of the EU Trademark Directive (89/104/EC), which will extend rules introduced in 2017 for EU trademarks to national trademarks. However, in patent matters, these rules will have less of an impact, as they essentially involve the partial rewording of rules on the relationship between EU and national patents with regard to the introduction of the unitary patent.
The European Delegation Act 2016 to 2017 contains three significant changes concerning IP rights. The first could destabilise a system that has been acknowledged unanimously as satisfactory and capable of protecting enterprise interests. Articles 3 and 4 of the act contain two comprehensive delegation laws (the relevant plan having been drawn up by the working group established within the Directorate General for the Fight against Counterfeiting – Italian Patent and Trademark Office). The second change concerns the implementation of EU Directive 2015/2436/EC in Italy in order to approximate the trademark laws of EU member states. The third change involves making the necessary changes to the Industrial Property Code(2) in order to bring it into line with the EU rules on the unitary patent and the Unified Patent Court.(3) Article 15 of the code contains a third, more general, delegation laws concerning the implementation of EU Directive 2016/943/EC. This is the most pressing matter, as the deadline for transposing the directive into national law is June 9 2018 (while the government has 12 months to implement the other two legislative delegations). It is also the most problematic of the three changes due to:
- the importance of know-how in Italy (which is typically protected in the context of confidential information), where there are significant top-class manufacturing activities and the culture of patenting is still not as diffuse as it should be; and
- the fact that undisclosed or confidential technical and commercial information is considered a real IP right in Italy (as it is in the United States, where a recent law has strengthened this protection).
Italian legislation therefore bestows on the proprietor of confidential information an exclusive right (albeit not relative to the information per se, but to the sphere of corporate confidentiality which defends it) to which all special procedural provisions established for other IP rights, such as trademarks and patents, are applicable. However, as EU Directive 2016/943/EC is the result of a laborious and often unsuccessful compromise (as highlighted in the reflections of Vittorio Ragonesi and Valeria Falce), its protection of confidential information has been weakened in many respects. This is particularly the case with regard to penalties. In some cases, the directive envisages a softening of such rights, downgrading them to a form of paid ownership (ie, allowing the party which has acquired the information unlawfully to continue using it simply by paying the owner a fee). However, the directive allows EU member states to maintain a higher level of protection, save for a number of mandatory provisions. Therefore, it is important that the government:
- takes particular care when implementing the directive, introducing only those changes which are mandatory; and
- distances itself as little as possible from the actual rules in order to avoid negative repercussions on a systemic level, given that, in Italy, the constitutional principle of equality (Article 3 of the Constitution) obliges equivalent situations to be handled in an equivalent manner, which thereby means that the Italian courts apply the special procedural provisions set out in the Industrial Property Code in unfair competition matters.
The delegation law concerning trademarks is less problematic, but still involves significant development of the existing rules. The delegation law will bring the Italian domestic rules into line with the new rules introduced by the EU Trademark Regulation (2015/2424), which was passed together with EU Directive 2016/943/EC and came into force on March 23 2016 (Quotidiano Giuridico, April 28 2016). The codified version of the regulation (ie, including the amendments made) was published as EU Regulation 2017/1001. The implementation of EU Directive 2016/943/EC will resolve the disparity of treatment of national and EU trademarks regarding the external transit of goods and the preparatory activity of infringement, which involves placing a sign that is identical or similar to a trademark on materials which are potentially capable of being used in the sale of infringing goods. In Italy, these provisions are applied only in relation to EU trademarks governed by the EU Trademark Regulation and not national trademarks, for which harmonisation with the EU rules is required. The same provisions apply to the possibility of registering non-conventional trademarks (ie, those which cannot be represented graphically). This is admitted under the EU Trademark Regulation and EU Directive 2016/943/EC, but is applicable only to EU trademarks at present. The delegation law also expressly provides that the bar on the parasitic use of trademarks be codified – even where such uses have non-distinctive purposes – as has already been held by a number of Italian courts. Rights holders must prove the use of their trademark in countering an action or a plea of lapse due to non-use, as is now the case for EU trademarks.
There are two finely balanced trademark matters which will require careful coordination with the existing rules. One is the introduction of a category concerning the guarantee and certification of trademarks, which aims to exist alongside collective trademarks (and partially replace them – especially in the case of geographical signs relating to traditional products) as signs which are institutionally intended for multiple use. The other, which requires even more consideration, is the redefinition of the rules concerning the lawful use of another party's trademark, which have been amended in the EU Trademark Regulation and EU Directive 2016/943/EC according to a single-case approach, which runs the risk of making it more difficult to recognise overall rationale. It will therefore be crucial that the required compliance with fair practice be retained in order to exclude interpretations which could potentially counteract the new provisions, thus avoiding situations in which anti-competitive conduct deprives rights holders of their IP rights.
A further change under EU Directive 2016/943/EC and the delegation law is more operational than legislative and concerns the possibility of having registered trademarks declared null or lapsed administratively and not solely before the courts – as is the case at present. This change may be postponed until January 14 2023 (the deadline for the other provisions being January 14 2019), which should mean that the Italian Patent and Trademark Office can be provided with adequate resources, which it most certainly does not have at present.
Under the delegation law concerning patents, the Industrial Property Code rules which aimed to regulate the efficacy of EU patents in the Italian legal system will be partially modified and the relative protection of the corresponding national patents will be further coordinated. The aim of these changes is that EU patents – which, following approval, will be equivalent to the respective national patents in the states to which they are extended – will be flanked by the EU patent "with unitary effects" (the so-called 'unitary patent'), resulting in a single title which will have effect throughout the European Union (with the exception of Spain). At the procedural level, a supranational court (the Unified Patent Court) will be established to examine cases concerning not only unitary patents, but also regular EU patents following a transition period. During the drafting of the delegation law, the possibility of the coexistence of a unitary patent and a national patent for the same invention was raised. To date, such a scenario is not permitted for EU patents, which when granted without opposition, or maintained after opposition or the subsequent proceedings before the European Patent Office Board of Appeal, lose the protection of any national patent concerning the same invention. This coexistence, which partially nullifies the effects of unitary protection, will be introduced in Germany following a questionable protectionist decision and is also being examined in France. However, in the face of firm opposition from the Confederation of Italian Industry, it has been decided not to permit such coexistence in Italy, at least for the moment. Therefore, the changes that the relevant delegation law makes to the Industrial Property Code will be more formal than substantive.
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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.
Endnotes
(1) Act 163 of October 25 2017 (Delegation to the Government for the Transposition of EU Directives and the Implementation of other Acts of the European Union – European Delegation Act 2016 to 2017).
(2) Legislative Decree 30 of February 10 2005 (the Industrial Property Code).
(3) Agreement on a Unified Patent Court, ratified and made executive pursuant to Law 214 of November 3 2016.
