INVENTOR REMUNERATION (ITALY)

22/09/2022

We are happy to share the last contribution from Simona Lavagnini, founding-partner, and Tankred Thiem, partner of LGV, on the magazine Practical Law Global, regarding employer obligations to pay remuneration to employee-inventors beyond their normal salary as a reward and additional compensation (or consideration) for creating patentable inventions.

Take a look!

Inventor Remuneration (Italy)

THE NEW PUBLIC OBJECTIONS REGISTER (REGISTRO PUBBLICO DELLE OPPOSIZIONI)

3/08/2022

The Public Objections Register (“POR” or “Register”) is a tool that aims to strengthen the position of consumers against aggressive commercial practices of telemarketing operators. As of July 27th 2022, the regulation for the new POR came into force, establishing some important protections in the interest of users and obligations towards operators.

 

The POR is a measure against so-called aggressive telemarketing and is a public service made available to users to express their refusal to receive advertising and promotional telephone calls.
Through enrolment in the Register, established by Presidential Decree No. 178 of 2010, the consumer expresses his or her objection to receiving telephone calls for commercial or promotional purposes. The service, which has been active since 2011 and for which the Ministry of Economic Development („MISE“) is responsible, was later updated by Presidential Decree No. 149 of 2019, which extended the scope of the POR to include paper advertising communications in addition to telephone calls. Through a service contract, the MISE entrusted the Ugo Bordoni Foundation with the implementation, management and maintenance of the service.
On January 21st 2022, the Council of Ministers approved the reform that strengthens the Public Objections Register, introducing numerous innovations both from the point of view of companies and contractors.
First, it is worth noting that the scope of the provisions in question has also been extended to other forms of marketing, not only in respect of commercial communications carried out through the activity of call centres. As provided for in Law No. 5/2018, the processing for the purpose of sending advertising or direct sales material or for carrying out market research or commercial communication of all fixed and mobile national numbers through the use of the telephone, whether or not they are included in contractor lists, and of the postal addresses included in the same lists, falls within the scope.
From the consumer’s point of view, then, registration in the Register makes it possible to block not only operator calls but also automated calls, i.e. made by means of automatic dialling software, which are increasingly common among operators and have so far escaped regulation.
In addition, consumers may also decide to include mobile telephone numbers in the Register, to prevent the receipt of promotional calls also on their mobile phones. This treatment was only reserved for fixed telephone numbers.
Another new aspect concerns the revocation of previous consents. Consumers have the possibility to register in the new POR the telephone numbers to which they do not wish to receive promotional communications: this entails the cancellation of all previously given consents.
All numbers that are not in the public telephone directory will also be entered automatically.
From the point of view of companies using so-called direct marketing activities, they are obliged to consult the Register monthly in order to remove new registered numbers from telemarketing initiatives. On the other hand, companies with which one previously had a contract may contact former customers within 30 days of the expiry of the contract. However, this is an exception, since from 15 days after a number has been entered in the Register, promotional calls to that number are considered unlawful.
Should an operator decide to contact a number for promotional purposes, even though it is included by the consumer in the POR, it would be in breach of the right to object and would be liable to administrative sanctions applicable under Article 83 of the General Data Protection Regulation (“GDPR”). These can be up to EUR 20 million or up to 4% of the total annual worldwide turnover, whichever is higher.
In conclusion, registering with the POR makes it possible to avoid receiving unsolicited commercial communications from any company. On the contrary, if the consumer intends to receive such communications from a specific operator, he/she will have to express his/her consent directly to that specific company. The latter may then include in its promotional campaigns the numbers of that specific user, always subject to the rules on the processing of users‘ personal data, which must be processed in line with the GDPR, the Personal Data Protection Code, the guidelines and the binding provisions of the Data Protection Authority (Garante per la protezione dei dati personali).

Alfredo Bergolo


THE LIABILITY OF E-COMMERCE PLATFORM OPERATORS – THE ADVOCATE GENERAL’S OPINION ON THE LOUBOUTIN – AMAZON CASE

16/06/2022

On June 2, 2022, Advocate General Szpunar of the Court of Justice of European Union delivered his Opinion regarding the joined Cases C-148/ 21 and C-184/21, concerning the Louboutin/Amazon case, setting out the reasons why the operator of an e-commerce platform should not be held liable for infringements of trademark owners’ rights committed on its platform.

 

Both disputes arose in 2019, when the French fashion designer Christian Louboutin appealed, against the e-commerce giant Amazon, an infringement of his exclusive rights claimed on trademark No. 0874489 registered in the Benelux, and trademark No. 8845539 in the European Union. The subject-matter of his patent rights concerns the “semelle rouge”, i.e. that particular spot of red (Pantone No. 18-1663TP) applied to the sole of luxury shoes, which has been distinguishing and making the collections of the Parisian footwear maison famous worldwide since the early 1990s.

In both proceedings brought against Amazon, Louboutin complained that, among the various advertisements on the platform, they were offered for sale several red-soled shoes, alleging that the operator had acted in violation of its exclusive rights, having advertised and marketed – without his consent – products identical to those for which its trademark is registered.

Both national courts – Luxembourg in case C-148/21, and Belgium in case C-184/21 – made references to the Court of Justice for preliminary ruling, in order to ask to European Judge to clarify the question of the liability of operators of online sales platforms.

In particular, by means of the abovementioned references, the Court was asked whether it was possible to charge direct liability to the operators of e-commerce platforms in relation to the publication of advertisements for the sale of counterfeit goods, even if offered by third parties. Moreover, in those references, there was also a request of interpretating the notion of “use” of the trademark regulated under Article 9(2) of European Regulation No 2017/1001.

In setting out its conclusions on the issue, Szpunar expressly referred to the function and activity performed by Amazon in the e-commerce, which operates as an intermediary on a “hybrid” market by offering consumers both its own and third-party products, as well as shipping and warehousing services. In this regard, the Advocate General has been claimed that the presence of Amazon’s logo as a distributor in third-party sales advertisements does not constitute a connection with the products offered. Accordingly, any infringements committed would also not be attributable to the platform operator provided that no elements would lead the normally informed user confusing the origin of the advertisement and perceiving the product logo as an integral part of the advertising offered by the operator.

Moreover, with reference to the interpretation of Article 9 of the European Regulation, the Advocate General considered that the commercial communication activities carried out by digital intermediary and e-commerce platform operator should not be considered among the hypotheses of ”use” of a trademark, and therefore it should not be liable for any infringements committed on its platform by third parties.

Therefore, the AG expressly concluded that Amazon “cannot be held directly liable for infringements of trademark owners’ rights that occur on its platform as a result of commercial offers by third parties”.

Although not binding for the next decision of the Court, the Advocate General’s conclusions represent a relevant reflection in relation to the criteria for attributing liability to e-commerce platform operators, especially in view of – and in anticipation of – the entry into force of the Digital Service Act, and the Digital Markets Act.

Federica Schiavone

 

THE THREE-DIMENSIONAL TRADEMARK MARK ON NESPRESSO CAPSULES HAS BEEN DECLARED INVALID BECAUSE ITS SHAPE IS NECESSARY TO OBTAIN A TECHNICAL RESULT

01/06/2022

The Swiss Federal Court ruled that the three-dimensional trademark on Nespresso capsules is invalid. The shape of the capsules has been considered by the Swiss Court to be necessary to achieve a technical result.

 

The lengthy case that pitted the Swiss-based multinational against Ethical Coffee SA recently ended with a declaration of invalidity of the 3D trademark of the capsules containing the ground coffee of the well-known manufacturer controlled by Nestlé SA.

The dispute arose from Nestlé’s claim of infringement of the registered three-dimensional trademark against Ethical Coffee. The plaintiff company claimed that Ethical Coffee’s production and marketing of capsules compatible with Nespresso coffee machines constituted an infringement of the shape trademark. Nestlé had, in fact, registered the three-dimensional distinctive sign, first internally, with the Federal Institute of Intellectual Property (IPI) and, subsequently, also at European Union and international level.

For these reasons, in 2011 Nestlé start a provisional proceeding against Ethical Coffee, requesting an injunction to stop the production and sales conduct considered in violation of to the plaintiff’s intellectual property rights. The case, which had been protracted in time, also for reasons due to the bankruptcy of the defendant, was decided on the merits by the Cantonal Court of Vaud, rejecting the plaintiff’s claim. On the other hand, the court of first instance upheld the counterclaim brought by Ethical Coffee and declared the invalidity of the claim brought by Nestlé. According to the judge, the title in question had become a public domain trademark.

The unsuccessful party then appealed against this decision, but the court of second instance also declared the three-dimensional trademark invalid. The reasoning given by the Federal Court, however, emphasized a different aspect compared to the decision of the judge at first instance, focusing on the notion of form „causally and sufficiently to obtain the intended technical result„.

Pursuant to Art. 7 (1) (e) RMUE, it is not possible to register a trademark characterized only by the shape or other component of the goods which is necessary to solve a technical problem.

The underlying purpose of the European legislator’s provision is to prevent technical solutions that should instead be subject to patenting and thus subject to expiry of the limited period of protection conferred by the patent title from being protected by a potentially infinitely renewable protection, as is the case with trademarks.

In line with the Court of Justice of the European Union judgments CJEU, Koninklijke Philips Electronics NV v. Remington Consumer Products Ltd, June 18th 2002, C-299/99 and CJEU, Lego Juris A/S v. Mega Brands Inc, September 14th 2010, C-48/09, the decision of the Court of second instance holds that the shape is considered to be technically necessary if it is not possible for competitors to use different solutions to solve the same technical problem, which in this case is the compatibility of the capsules with Nespresso coffee machines.

Technical experts’ reports provided during the proceedings have in fact shown that there are various solutions on the market, but that they are worse in terms of production costs, insertion into Nespresso machines and quantity of coffee contained in the capsules.

In conclusion, it follows that the declaration of invalidity of the three-dimensional trademark in question was based on the consideration that the shape of the capsules is technically necessary to allow them to be inserted into a Nespresso coffee machine.

Alfredo Bergolo


 

THE EXISTENCE OF A SELECTIVE DISTRIBUTION NETWORK MAY, UNDER CERTAIN CIRCUMSTANCES, PRECLUDE THE APPLICATION OF THE PRINCIPLE OF EXHAUSTION OF THE TRADEMARK RIGHTS

25/05/2022

The owner of a luxury brand may oppose the resale of its products, even through online sites, by a reseller who is not part of the selective distribution network and who operates in a way that damages the prestige and reputation of the brand itself. This was affirmed by the Court of Milan in a case involving a well-known company of high fashion products operating in the luxury sector

 

With Order No. 2635/2022 of 28 February 2022, the Court of Milan confirmed, on appeal, the preliminary injunction with which the court had allowed the action brought by Chanel against a company outside its selective distribution network – Trilab s.r.l. – which resold, through e-commerce for hairdressers, perfumes and cosmetics of the well-known French maison.

In particular, the Judge held that there were ‚legitimate reasons‘ to prevent the exhaustion of trade mark rights, both from the point of view of the antitrust law compatibility of Chanel’s selective distribution contracts, and from the point of view of the prestige of the protected goods, which qualify as luxury goods.

It should be clarified that selective distribution is a system based on agreements between the supplier and the distributor, whereby the supplier undertakes to sell the contract goods or services, either directly or indirectly, only to distributors selected based on specified criteria. The distributors undertake not to sell those goods or services to unauthorised resellers in the territory that the supplier has reserved for the system. This system is generally used for high-tech goods for which the buyer needs specific and qualified assistance or for luxury goods in order to protect the investments made by the owner in terms of brand prestige.

This sales system is in the abstract liable to prevent, restrict or distort the game of competition. According to Italian and Community case law, can be considered legitimate if: (i) it is limited to products of high technicality or luxury and prestige, in order to preserve their quality and ensure their proper use; (ii) the choice of authorised reseller is based on objective criteria; (iii) the limits imposed on free trade do not exceed what is necessary.

In the present case, the Court, after recognising the legitimacy of Chanel’s selective distribution network (since the clauses contained in the agreements were intended only to safeguard the prestige and high reputation of the brand), focused on the possibility of considering selective distribution a legitimate ground for exception to the principle of exhaustion, allowing the owner of the luxury brand to prevent the circulation of the goods marketed by a third party in violation of the clauses agreed with the authorised distributor.

The principle of exhaustion under Art. 5 of the CPI states that the exclusive rights granted to the owner are exhausted with the first marketing of the goods by the owner or with the owner’s consent unless there are ‚legitimate reasons‘ justifying the trademark owner’s opposition to the further marketing of its goods.

In Chanel’s view, Trilab marketed the Chanel-branded products outside the selective distribution network with serious prejudice to it because the way in which they were sold and offered for sale, by the characteristics they presented, were detrimental to the reputation of the maison.

These methods, contrary to Chanel’s quality standards, consisted in offering the products on an e-commerce site for hairdressers, with blurry images and with crowded content next to products of a different merchandise nature and with lower profile brands. The products were thus presented on the e-commerce site for hairdressers in contrast to the message of exclusivity and elitist luxury of haute perfumeries that Chanel intends to communicate.

The manner of sale described was also combined with the alteration of the original products through the removal of the identification codes: the alteration of the products constituted a further and different element capable of excluding the application of the principle of trademark exhaustion.

Chanel argued that the altered packaging not only compromises in the eyes of consumers the image of quality and prestige that distinguishes Chanel’s products, but also prevents them from identifying the genuineness of the products and their origin, thus frustrating the entire tracking system set up by Chanel as part of the controls necessary for the protection of the selective distribution network.

The panel therefore found all of Chanel’s arguments to be valid and therefore ordered an injunction, supported by a penalty, against the further marketing, offer for sale, promotion and advertising of Chanel-branded products on Trilab’s e-commerce website, as well as the publication of the operative part of the order on Trilab’s website.

The order under comment herein highlights that the selective distribution system must be viewed not only from the perspective of protection of the trademark owner, but also of the consumer who can trust the high-quality standards of the products distributed and the professionalism of the distributors.

Anna Colmegna