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THE SUPREME COURT RULES ON MANDATE CONTRACTS GOVERNING THE CLIENT-ATTORNEY RELATIONSHIP

18/01/2017

A corporation that has been removed from the companies register cannot appeal to the Supreme Court in that such company must be considered as no longer existing and, therefore, bereft of procedural legitimacy and interest in the appeal and without power to confer a special power of attorney for the judgment before the Supreme Court.

With judgment no. 6780 of 2016, the Italian Supreme Court declared that the petition filed by a company that had been removed from the companies register was inadmissible. According to the Court, a power of attorney must be conferred by a company that is not “legally extinct and without legitimacy to commence proceedings in application of art. 2495 of the Civil Code”.

The above mentioned judgments follows the Court’s ruling n. 15295 of 2014, in which the Court stated the following principle: the party that has joined proceedings via its attorney and has been affected by the events regulated by art. 299 of the Code of Civil Procedure (i.e. death or loss of procedural capacity), and that moreover has not declared or notified any of the aforesaid events pursuant to art. 300 of the Code of Civil Procedure, nevertheless continues to be represented by the same attorney (in Italian, this is known as the “principio di ultrattività del mandato”, which may loosely be translated as “principle of survival of the attorney’s mandate”). The legal position is stabilized also for the subsequent suspension and appeal stages, unless: in the course of the appeal, (i) the heirs of the defunct party join the proceedings; (ii) if the party was legally incapacitated, its legal representative joins the proceedings; (iii) the party’s attorney gives notice of the events pursuant to art. 300 of the Code of Civil Procedure.

The direction taken in 2014 is not undermined by the 2016 judgment, in so far as the latter is concerned with pointing out a different principle, that is that the attorney’s mandate cannot survive when an appeal is lodged before the Supreme Court.

In order to correctly petition the Court, the attorney requires a special power of attorney for appearing in judgment before the Court, as required by Art. 365 of the Code of Civil Procedure. Such power of attorney, however, cannot be conferred by the legal representative of an extinct company, because he or she has lost all powers of representation in consequence of the extinction of the corporate entity.

NEWS FROM THE ITALIAN SUPREME COURT REGARDING PATENTABILITY OF INTERMEDIATES

10/01/2017

With a recent decision that ended a long dispute between the pharmaceutical company Bayer and the Italian company Chimica Industriale, the Italian Supreme Court denied the independent patentability of an intermediate, declaring the partial invalidity of the patent of the German pharmaceutical company. The issue – that mainly concerns a method to obtain the substance called Drospirenone, used in birth control pills – is related in particular to two claims of a European patent, validated also in Italy: the first claim concerns the method for obtaining the final product Drospirenone and provides, inter alia, the use of the intermediate called IDROX. The second claim is not about a method but instead protected IDROX as a product.

Con decisione del 14 gennaio 2011, il Tribunale di Torino decidendo in prima istanza aveva già escluso la brevettabilità di una sostanza intermedia sottolineando che “non consta la funzionalità e la possibile applicazione industriale del prodotto intermedio in sé ove distaccato e avulso dal procedimento chimico brevettato nel quale si inserisce come composto chimico intermedio.” Il Tribunale era giunto a tale conclusione in quanto soprattutto la descrizione del brevetto non avrebbe evidenziato un’autonoma rilevanza della sostanza intermedia. Essa non risulterebbe avere una funzione autonoma e un’utilità concettualmente separabile dal procedimento di sintesi che conduce alla produzione di Drospirenone.

By decision of 14^th January, 2011, the first instance Court of Turin had already excluded the patentability of an intermediate highlighting that “it is not aware of the functionality and possible industrial application of the intermediate product itself when detached from the patented chemical process in which it is included as an intermediate chemical substance.” The Court came to this conclusion because the autonomous importance of the intermediate would have not resulted from the patent specification. The intermediate would not have an autonomous function and utility conceptually separable from the synthesis process that leads to the production of Drospirenone.
By decision of 24^th December, 2012, the aforementioned ruling regarding the claim of the intermediate product was confirmed also in the appeal proceedings, and with decision of 2^nd December, 2016 the previous rulings have been definitively confirmed by the Supreme Court. In addition to the arguments submitted by the Turin Court, the Supreme Court held that: “… according to the previous decisions of this Court, it makes no sense to claim as a product an intermediate that is exclusively instrumental to a specific process.” In this case the intermediate product would lack the autonomous industrial application, requirement established under article 49 of the Industrial Property Code. And, in fact, with decision no. 11094 of 1990 the Court already noted that “the process and the product are independently enforceable only if each has its own requirements for patentability and since in this case the intermediate is not conceptually separable from the process – said intermediate is not itself patentable as a product, because the chemical substance-intermediate, representing a necessary step of the synthesis process ‘is not usable to satisfy a need different from the one connected to the implementation of the procedure’ …. the intermediate, therefore, even if described and claimed as a product, remains an integral part of a process invention and as such is enforceable just as deriving from the process itself”.

This principle has been confirmed by the Supreme Court in 1997: “The Court observes that the so-called intermediate, i.e. the substance that is a necessary precondition of a synthesis process, is not, as this Supreme Court has already made clear by creating consistent case law from which there are no reasons to deviate, independently patentable when it is usable to satisfy the same need connected to the implementation of the process itself. In that regard the Court of Genova has fully justified its judgment when it denied that in this case a person skilled in the art could identify the aforementioned substance as an industrial product from the elements attached to the application. ”

With the recent decision, however, the Court now indicates more explicitly that it does not intend to deny “the patentability of the intermediate in general”, but at the same time it confirms the approach of the previous case-law: “The intermediate, therefore, even if described and claimed as a product, is still an integral part of a process invention and as such is enforceable just as part of the patented process. In short, according to the case law of this Court, it makes no sense to claim as a product an intermediate that is exclusively instrumental to a specific procedure, which moreover as such would lack the attitude to have an independent industrial application: the petitioner objects the fallacy and the anachronistic character of this statement, but, in fact, beyond this objection, it does not explain what would be wrong. Therefore, there is no reason not to comply within the limits indicated: this reasoning does not deny the patentability of the intermediate in general, but only the one of that intermediate which does not have any individual character in comparison to the process in which it is included. The district Court, in that regard, has deemed that the characters of originality, inventive step and industrial usability (OMISSIS) coincide with those of the patenting process, precisely focused on the production (OMISSIS) through (OMISSIS): it would be different, in other words, if the (OMISSIS) could have been used not only in the production process of (OMISSIS), but also in the one of other final products. ”

From the combined examination of the previous decisions it is clear that the requirement deemed fundamental is the one of the industrial applicability under Article 49 of the Industrial Property Code. It is clear, in addition, that the Court emphasized the need for the claim or the patent specification to indicate precisely the “individual character” of the intermediate product with respect to the production process of the final product where it is included. Considering that the European patent at issue was granted by the EPO, the importance and the need to consider also different approaches of Courts of the States that are part of EPC, in the very process of drafting the original text of the patent, appears evident once again.

INFRINGEMENT OF MICROSOFT TRADEMARKS ON COA (CERTIFICATES OF AUTHENTICITY) SOLD SEPARATELY FROM HARDWARE

20/12/2016

Italian court holds that it is unlawful to commercialize COAs (Certificates of Authenticity) which have been sold or purchased separately from the software they refer to and which without authorization reproduce the distinctive signs exclusively owned by Microsoft.

With decision dated 1 December 2016 the Court of Naples (Intellectual Property Division) granted Microsoft an ex parte order to be enforced against a Naples-based reseller of software products. The order required that products bearing signs infringing the “Microsoft” and “Windows” registered trademarks, and accompanying logos, should no longer be produced, imported, exported, distributed, offered for sale, commercialized, including via the Internet. The order also imposed a € 250,00 fine for each violation ascertained after the issuing of the order and a € 500,00 fine for each day of delay for failing to execute the order itself. Finally, the order obligated the party to withdraw from commerce all samples of the infringing products.

The Court, who also considered extracts of web pages named after and/or referring to the defendant, held that it had been proven that the defendant produced and/or commercialized and/or offered products, in particular COAs (Certificates of Authenticity) – which are fixed on the computers on which original Microsoft software has been installed – which could not be sold or purchased separately from the software product they refer to. The Court also found that unlawful use had been made of stickers related to Microsoft programs, in that they bore signs that infringed the Microsoft trademarks, a behavior that was judged consistent with the intention of illegally copying the software.

On 15 December 2016 the Court of Naples confirmed the aforesaid order, and also compelled the defendant to proceed with publication of the order on the Internet page of the defendant.

09/12/2016

The Court of Milan, with partial judgment published on 1 August 2016, upheld the claims of Business Competence s.r.l., finding the defendants Facebook s.r.l., Facebook Inc. and Facebook Ireland Ltd liable for copyright violation of the electronic database made of the plaintiff’s application “Faraound”, as well as for acts of unfair competition pursuant to article 2598 no. 3 of the Civil Code. The Court also issued an injunction – together with a penalty – for any further use of the application “Nearby” of Facebook, and the publication of the judgment, and adjourned the case in order to assess and quantify damages.

In the present case Business Competence s.r.l., a company which is active in the industry of online marketing services, developed in 2012 an application for mobile phone that selected and organized data of users’ Facebook profiles and allowing to view the nearest shops, together with the relevant data, offers and reviews, called “Faround”. The application was registered in the Facebook App Center, which contains applications tested and approved by Facebook, and then included in the App Store of the latter. About two months later, however, Facebook announced the launch of “Nearby”, an application similar to “Faround” and that copied the core of the same, according to the plaintiff’s interpretation, changing only the layout.

The Court of Milan – after having rejected the objections of lack of jurisdiction and lack of locus standi submitted by the defendants – has confirmed the liability of Facebook Inc., Facebook Ireland Ltd and Facebook Italia s.r.l. both for copyright infringement on database and for unfair competition acts under article 2598, no. 3, of the Civil Code.
The Judges first of all qualified “Faround” as database, implemented in the form of a computer program, having a creative character – as confirmed by the court-appointed expert during the proceedings on the merits – and stated that in order to assess such creative character only the selection or arrangement of the material should be relevant.
The Court held that Facebook’s “Nearby” is an elaboration of the program “Faround” of Business Competence, that was made possible by the analysis of the same program by the defendants and in particular by the delivery of the executable file of “Faround” for testing purposes. On the other hand, Facebook has not demonstrated that it has developed autonomously and independently its own application, nor – despite the judge’s request – has never filed in the proceedings the related source code, thus impeding the analysis and detailed comparison with the other party’s application.
The Court also confirmed the responsibility of the defendants for infringing article 2598 no. 3 of the Civil Code, as it exploited unfairly others’ investments for the creation of a work of considerable economic value, abusing the relationship of trust based on the contacts and the contractual relationships established with the developer Business Competence and violating the obligations of good faith, trust and fairness.

In this regard, the Court stated that Facebook was not allowed to analyze the “Faround” program to develop a similar application that was also addressed to the same users. That is because article 64ter of the Copyright Law allows analysis activities only to the extent that they are intended for using the program and for its typical functioning, while it prohibits such activities for commercial purposes, under penalty of nullity of the related contract clause. Therefore, the clauses in the agreement between the parties, that allowed Facebook to “analyze the applications, contents, and data for any purpose, including commercial ones”, should be considered void.

THE ITALIAN NEWSPAPER “IL CORRIERE DELLA SERA” HAS PUBLISHED THE RULING OF THE JUDGEMENT HELD BY THE COURT OF VENICE – COMMERCIAL DIVISION – THAT AFFIRMED THE RENOWN OF THE TRADEMARKS “ECOLAB” AND DECLARED THE SIGN “ECOLABIOWORLD” AS INFRINGING WITH THEM.

15/11/2016

With the judgement published on May 12, 2016, the Court of Venice – Commercial division – ruled in favour of Ecolab Inc. and partially rejected the appeal against the decision of September 23, 2015, held by the same court in favour of the American multinational.

The appealed decision, taken at the end of an urgent proceedings promoted by Ecolab and aimed at the investigation of the infringement of its trademarks by the sign “Ecolabioworld”, had in fact inhibited the counterparty from using said sign within its business activity, the domain name www.ecolabioworld.org as well as in the Facebook page www.facebook.com/Ecolabioworld.

The board of appeal affirmed said decision, underlining that the trademark ECOLAB has acquired a high degree of renown and distinctiveness in the public of consumers. The second instance judges also reaffirmed that a high risk of confusion exists between the trademark ECOLAB and the sign “Ecolabioworld”, as in the comparison between two denominative signs the initial term (ECOLAB, in this case) significantly affects the memory of the consumer, while the remaining differences cannot be perceived as relevant. The addition of the words “io” and “world” to the challenged sign has been deemed conceptually unable to prevent a risk of confusion between the compared signs: it would be in fact inconceivable, the board of Venice affirms, that by seeing the sign “Ecolabioworld” the consumer is able to give a peculiar conceptual meaning to it, so as to distinguish it from the renowned trademark ECOLAB. Equally interesting is the part of the judgment where the Court of Venice has rejected the adverse request of acquiescence pursuant to Art. 28 of the Italian Code of Industrial Property, affirming that said principle does not apply to non-registered trademarks, as it necessarily requests the valid registration of the later sign whereof acquiescence is requested.