News

PUBLISHED THE COMMON PRACTICE “USE OF A TRADEMARK IN A FORM DIFFERING FROM THE ONE REGISTERED” DRAFTED BY EUIPN

06/11/2020

On 15 October 2020, the Intellectual Property Offices of the Member States of the European Union published the Common Practice on the use of trademarks in a form different from the one in which they were registered, drafted by the European Union Intellectual Property Network (EUIPN).

 

The issue
The problem concerning the use of trademarks in a form other than the registered one is relevant with regard to the decadence for non-use of the trademark. National legislation (Articles 24 and 26 CPI) and European legislation (Articles 18 and 54 EU Regulation 2017/1001), in fact, establishes that a trademark is subject to revocation if it is not effectively used by the owner during the 5 years following registration or if its use is suspended for an uninterrupted period of 5 years.
Moreover, the above mentioned law provides that the use of the trademark in a modified or different form from the registered one is considered relevant unless the distinctive character as registered is altered.
The Common Practice intervenes on this aspect and aims at providing useful indications to assess whether the use of the trademark in a modified form alters its distinctive character, causing as a consequence the irrelevance of its use for the purposes of revocation. The importance of this publication is due to the fact that often in company practice changes, revisions or updates are made to registered trademarks over time.
The Common Practice
The published text is the result of a process of consultation with the national intellectual property offices of the EU, EUIPO and international partners that started in October 2017 and, as anticipated, aims to identify a set of homogeneous principles and canons to assess when changes to a sign lead to the alteration of the distinctive character of the trademark actually registered. In particular, the Common Practice assesses the impact that additions, omissions and changes in characteristics have on the distinctive character of a word, figurative or mixed mark.
The EUIPN identifies two key steps to make this assessment. First, the registered trademark must be considered with reference to its distinctive and visually dominant elements in order to determine which of them contribute to the distinctive character of the sign. Secondly, once these elements have been identified, it is necessary to establish whether these elements exist in the use of the sign which is made in practice through direct comparison between the two signs and by assessing in practice both the differences and the effect they have on the original mark.
In order to make it easier to understand, the Office proceeds with the listing of some examples, including:

In this first case, the Office maintains that the added figurative element does not interact with the trademark as registered and is perceived by the public regardless of the sign used. For this reason, the introduction of the figurative part (the fish) does not affect the distinctive character of the sign, which remains unchanged.

In the second example, on the other hand, a second figurative element is added to the registered trademark which, in the opinion of the Office, alters its distinctive character. In particular, the addition of the second figurative element implies the creation of a new concept (big fish eats small fish).
As far as the application of the Common Practice in administrative judgements is concerned, each Member State has indicated both the date of implementation and which procedures will be applied. As far as Italy is concerned, the Common Practice will only become applicable in proceedings instituted after 15 January 2021. Consequently, all proceedings that are pending but were introduced prior to that date are excluded.
Conclusions
Although the assessment of the actual use of a trademark is to be considered on a case-by-case basis, we believe that the Common Practice is a useful guide to facilitate and homogenise the decisions of national intellectual property offices and individual Courts.
The full text of the Common Practice is available at the following address: https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/contentPdfs/about_euipo/who_we_are/common_communication/common_communication_cp8_en.pdf

Paolo Passadori


PRODUCT PLACEMENT IN ROVAZZI’S MUSIC VIDEO-CLIP: THE PROCEEDINGS STARTED BY AGCM WITH MANDATORY COMMITMENTS OF PROFESSIONALS HAVE BEEN CONCLUDED

05/11/2020

With two measures published on November 2, 2020, the Antitrust Authority concluded the proceedings against LG, WINDTRE and Fabio Rovazzi, which concerned the inclusion of commercial brands in the video clip of the song “Senza Pensieri” in non-transparent mode. The artist and the operators involved presented specific commitments that the Authority has deemed appropriate to remedy the possible profiles of illegality.

 

The initiation of the proceedings
At the beginning of 2020, following the recommendation of the National Consumers’ Union, two separate investigation procedures were initiated (PS11603 concerning LG and PS11604 concerning Wind), both concerning a potential case of hidden advertising due to the presence of the WindTre and LG brands within the video clip of the song “Senza Pensieri” by Fabio Rovazzi, made available from August 1, 2019 on the singer’s “YouTube” channel and found on the Internet and on television networks.
In particular, the reporter claimed that the methods used to highlight the inclusion of trademarks for promotional purposes may be inadequate to make clear the existence of a contract relationship with the trademarks shown in the video, in order to ensure the consumer an adequate critical spirit, with possible violation under Articles 20 c. 2, 22 c. 2 and 23 c. 1 lett. m) of the Consumer Code. The warnings used “Sponsor Adv WindTre&LG”, were in fact external to the video and any consultation, visible only by clicking on “Show Other”, placed in the text below the video, along with other information. The Authority also ascertained that the above wording would be included in the description of the YouTube video only on November 6, 2019, a few months after publication.
During the preliminary activity, the artist reported that a modification of the video aimed at inserting new writings and warnings within it would require the upload of a new version of the video on the “YouTube” channel, with the deletion of the previous version of the video, resulting in the loss of all counted views and economic damage to the professional.

The commitments of the professionals involved
Fabio Rovazzi and the other professionals involved (including Universal, the production companies Bmovie Italia and 9.99 Films and the marketing agency Evolution People) have presented to AGCM specific commitments to eliminate the alleged violations in relation to the video clip under investigation and avoid future similar situations.
In particular, Fabio Rovazzi has committed himself to use the tool made available by YouTube called “Positions and approvals of paid products”, which does not involve reloading the video clip on the platform but makes the words “include paid promotions” appear in overlay for 16 seconds at the beginning of the video. This change is now already visible on the video clip of the song.
Again, in the event that the video was requested by television broadcasters, Fabio Rovazzi committed himself to deliver the work containing final credits, with specific warnings of the presence of product placement and explicit mention of commercial partners. Moreover, the singer will also deliver the video clip with the above mentioned warnings to Universal Music Italia S.r.l., the licensee of the rights of the above mentioned work.
In relation to future video clips, Fabio Rovazzi has also committed to include in the end credits of the video clip specific warnings regarding the presence of product placement, with explicit indication of the brands and brands present.
Finally, with regard to future communications by social media, the artist committed himself to include hashtags such as #advertising, #sponsored, #adversiting, #adv.
The LG operator, on the other hand, committed itself to sending a communication to the top management of the company to demand compliance with the regulations and avoid, in relations with influencers, occult advertising, adopting a self-regulatory code relating to product placement, and amending its contracts to strengthen the obligations of influencers with regard to compliance with the rules of the code of conduct.
The operator WindTre committed, for the new contracts that will be signed and that will have as their object artistic performances involving internet platforms where one of the brands of WindTre is present, to ask the other contractual party to insert a negotiating clause providing for the inclusion of a disclaimer to inform the user of the inclusion of commercial messages. This warning will be inserted in the position chosen by the artist, in sliding or static mode, at the beginning of the video before viewing or at the end of the video, with mention of the sponsor. The counterparty must provide WindTre with appropriate periodic reports on the initiatives undertaken.
Similar commitments have been made by the other operators involved.

The provisions of the AGCM
The AGCM has deemed the commitments presented suitable to eliminate the possible profiles of the illegitimacy of the disputed commercial practice, meeting the requirements of Article 27, paragraph 7, of the Consumer Code.
In particular, the Authority stated that the commitments – which can be traced back to parties active in various ways throughout the video clip production process – represent a common effort particularly effective in ensuring compliance with transparency rules.
The Authority has therefore closed the proceedings without determining any infringements, making the commitments made mandatory and pointing out that, in the event of non-compliance, a pecuniary administrative sanction ranging from 10,000.00 to 5,000,000.00 euros will be applied.

The rules of advertising
According to Directive 2006/114/CE concerning misleading and comparative advertising is “advertising”, any form of message which is broadcast in the exercise of a commercial, industrial, artisan or professional activity, with the aim of promoting the supply of goods or services, including real estate, rights and obligations”. The definition is rather wide and is suitable to include any form of communication, including those that use the Internet, such as links, banners, popups, showcases, email marketing, as well as social and/or blog posts and even music videos, when these forms of communication are aimed at promoting consumption.
Articles 18 et seq. of Consumer Code, also applicable to online advertising, state that advertising is lawful if it is “clear, truthful and correct”. In particular, it is defined as “misleading” the commercial message that misleads the consumer by prejudicing his economic behaviour and causing injury to competitors, including in this concept also the reticence” and “suggestiveness” of the message. The induction in error may concern the price, the availability on the market of the product, its characteristics, the risks connected to its use.
The Code also indicates commercial practices that must, in any case, be considered misleading (such as, for example, displaying a trustworthy mark, a quality mark or an equivalent mark, without having obtained the necessary authorisation, and similar behaviour) or aggressive (such as, for example, explicitly informing the consumer that, if he or she does not purchase the product or service, the work or subsistence of the professional will be endangered, and so on).
Another important regulatory measure is Legislative Decree 145/2007 on misleading advertising, Article 5 of which clarifies how advertising must always be recognisable as such, and how all forms of subliminal advertising are prohibited. Among other things, hidden product placement is prohibited, i.e. the highlighting of a product during a “storytelling” so that the presence of the good appears to be the result of the author’s natural choice, while in reality, it is the object of an economic agreement between the influencer and the company that produces the product. Special attention should be paid to children and adolescents, since according to art. 7 of the decree, advertising that may abuse the natural credulity or lack of experience of this particular segment of the public, which is very numerous in the world of social media and blogs, is considered misleading.
In the event of violation of law provisions that prohibit misleading advertising, the involvement of the civil judge who may prohibit the conduct is provided for even as a precautionary and urgent measure, as well as order compensation for any damage caused.
In this industry, the role played by the Competition and Market Authority (AGCM) is also very important, which, according to Article 8 of Legislative Decree No. 145/2007, can in turn issue an injunction against the continuation and temporary suspension of misleading advertising.
The AGCM may also apply a fine ranging from € 5,000.00 to € 500,000.00, taking into account the seriousness and duration of the violation.
In addition to the provisions of the law, in the advertising industry there is a code of self-discipline, managed by the “Istituto dell’Autodisciplina Pubblicitaria” (IAP): it is a “private” code of conduct, in the sense of a contract between the parties (mainly the advertising media) who enter into it.
The IAP launched in June 2016 (and integrated in 2017) the so-called “Digital Chart”, a document that carries out a survey of the most widespread forms of commercial communication on the web and in the digital world and sets the criteria for the recognition of commercial communication. With reference to advertising by means of celebrities, influencers, bloggers and/or vloggers, carried out both by post and live video, the Digital Chart clarifies that, in order for the commercial message to be clearly recognizable, these subjects must include in a clearly distinguishable way in the initial part of the post the words: “Pubblicità /Advertising”, o “Promosso da (brand)/Promoted by (brand)” o “Sponsorizzato da (brand)/Sponsored by (brand)” o “in collaborazione con (brand)”o “in partnership with (brand)”; e/o entro i primi tre hashtag (#) una delle seguenti diciture: “#Pubblicità/#Advertising”, “#Sponsorizzato da (brand)”/“#Sponsored by (brand)” o “#ad” unitamente a “#brand”.
Violation of the Digital Chart rules may result in the issue of a cease and desist commercial communication order by the Giurì.

Margherita Stucchi


THE SYSTEMATIC REPRODUCTION OF A SECONDARY NATURE ELEMENTS WITH RESPECT TO THE OVERALL SHAPE OF THE PRODUCT INTEGRATE A HYPOTHESIS OF PARASITIC COMPETITION, PURSUANT TO ART. 2598 No. 3 OF THE ITALIAN CIVIL CODE

28/10/2020

With decision of 22 October 2020, the Court of Milan, Business Division, ascertained that the conduct carried out by the defendant companies, active in the production and marketing of products in the footwear sector, create acts of unfair competition, pursuant to the art. 2598 n. 3 of the Italian Civil Code to the detriment of the plaintiff company, assisted by LGV.

 

The matter in question begins with the establishment by a well-known footwear and fashion manufacturer of a precautionary judgment pursuant to Articles 126, 131 and 133 c.p.i. and pursuant to art. 700 of the Italian Civil Code, upon which almost all the requests for injunctions formulated by the then appellant were accepted, with an order partially confirmed in the subsequent complaint phase.
The decision comes at the end of the proceedings on the merits with which the Court of Milan confirmed the findings in the precautionary stage, namely the presence of some elements on the defendants’ footwear and their suitability to produce a confusing effect. Indeed, during the proceedings it was proved that multiple elements present in the plaintiff’s shoes are replicated in the defendants’ products and that such conduct, which takes the form of a systematic imitation of all or almost everything that the competitor does, must be considered contrary to the rules which preside over the ordinary course of competition. According to the Court of Milan, this systematic imitation constitutes “an unfair competitive practice because the plurality of conduct gives rise to a unitary offense integrating a continuous and structured exploitation of the work of others, which can take place chronologically both subsequent acts imitating the initiatives and products of others through a series of simultaneous behaviors that can all be considered and manifested univocally and in a significant quantity as aimed at the pursuit of the same illicit purpose”.
On the basis of this premise, the Court of Milan, in partial acceptance of the defendants’ claims, founded the final injunction order to the detriment of the defendants, also ordering the withdrawal from the market of the products at issue and imposing a penalty for each violation. or non-compliance or delay in the execution of the order. The Court therefore remitted the case to be investigated for the quantification of the damage.

Brenda Villa


SOFTWARE INFRINGEMENT: THE DIRECTOR OF A COMPANY CAN BE HELD PERSONALLY RESPONSIBLE IF IT IS NOT PROVED THAT ALL THE NECESSARY MEASURES TO PREVENT THE INSTALLATION OF UNLICENSED COMPUTER PROGRAMS WERE ADOPTED, AND THE DAMAGES COMPENSATION INCLUDES BOTH FINANCIAL AND MORAL DAMAGES, SO AS TO DOUBLE THE AMOUNT DUE

20/10/2020

With the judgment of October 12, 2020, the Court of Venice, Business Division, condemned a company operating in the field of design of equipment and furnishings for catering and hospitals, and its director, for copyright infringement on software. The ruling was rendered within merit proceedings promoted following the confirmation, in interim proceedings, of the decree by which the same Court had authorized inaudita altera parte the civil search of the company’s PCs.

 

The case is based on the results of a civil inspection, carried out under the Italian copyright law, of the company’s PCs, which had highlighted the presence of various copies of the plaintiffs’ software without regular license. For this reason, following the confirmation of the civil search decree, the plaintiffs promoted proceedings on the merit for the definitive ascertainment of the violation of their exclusive rights and the full compensation for damages suffered. Merit proceedings were brought against not only the company to which the precautionary measure was addressed, but also its director, who was deemed personally responsible, among others, pursuant to articles 2395 and 2476 of the Italian Civil Code.

The counterparties defended themselves by denying their responsibility and stating that, as for the director, she should not have been condemned being she unaware of the presence of unlicensed software, which would have been independently downloaded on the company’s pcs by some of the employees.
With the commented judgment, the Court of Venice fully rejected these arguments, recognizing on the contrary the personal responsibility of the company’s director, too. On this point, the Court ruled that – given the small size of the company and the (design) activity carried out by it, for which it is necessary to use design software such as those owned by the plaintiffs – it was not credible that the director was not aware of the presence and use of illicit software and that, on the contrary, from the documentation and evidence acquired during the proceedings, it could not be excluded that it was the same director who promoted the commission of the ascertained infringements. The responsibility of the director, continues the Court, would exist in any case even if her awareness could not be demonstrated, and this in consideration of the fact that also an omissive conduct – consisting in the case in question in the failure to control the licenses of the software installed on the company’s computers and in any case in the failure to adopt technical measures able to prevent the commission of the violations – would cause direct damages to the copyright holders.

Another relevant aspect of the judgment concerns the order to pay damages. The defendants were in fact requested to compensate both pecuniary and non-pecuniary damages. On this last point, the Judges, once again granting the plaintiffs’ requests, deemed it necessary to liquidate non pecuniary damages – in their meaning as moral damage, in consideration of the criminal relevance under Article 171-bis of the Italian copyright law and Article 158 of the Italian Criminal Code, of the illegal reproduction of computer programs – in an amount equal to the economic damages, with a substantial doubling of the amount overall due.

Giorgio Rapaccini


ANOTHER CHAPTER OF THE ALL-ITALIAN SAGA RELATING TO THE EXEMPTIONS FROM THE PAYMENT OF COMPENSATION FOR PRIVATE COPYING AND THE ROLE OF SIAE

13/10/2020

On October 7, 2020, the Lazio Regional Administrative Court (TAR) intervened again on the matter, deeming the new legislation issued by the Ministry of Cultural Heritage to be legitimate, and in particular the new role entrusted to the SIAE, which would not be in conflict of interest – although it is the subject entrusted with identifying the documentation that the subjects interested in the exemption must file, as well as with the issuance of preventive opinions as to the applicability of the exemptions.

 

The background
The TAR ruling constitutes a new chapter in a judicial saga concerning the rules for benefitting from exemptions from paying the compensation for private copying in Italy. The issue concerns the payment of a flat-rate levy – or levy for private copying, pursuant to art. 71 septies ss. copyright law – which must be paid by all producers or importers in Italy, who sell devices or media suitable for the reproduction of audio and / or video content. These are obviously very important sums, which are collected by the SIAE (the Italian Society of Authors and Publishers, or the largest collecting on the Italian territory), which then provides for the breakdowns in favour of the owners of copyright and related rights. The Italian legislation provided and provides that producers and importers can take advantage of an exemption from the payment of the fee, in all those cases in which in abstract or in concrete the devices and / or media sold are not usable for audio and / or video reproduction. However, for some time there has been a very strong contrast between the category of manufacturers and importers of devices and supports on the one hand, and the SIAE (also representing the category of rights holders) on the other, regarding the legitimacy of the rules governing the application of the exemption. The interested parties, in addition to complaining about the substantial injustice of the flat-rate levy, challenged the role assigned by the legislation to the SIAE which, despite being a party to the matter, had the power to negotiate and conclude protocols for the application of the exemptions. The EU Court of Justice ruled on this point, holding that this role of the SIAE was incompatible with Community rules, for violation of the principle of non-discrimination. Following the decision of the EU Court of Justice, the Council of State i.e. the Supreme Italian Administrative Court, annulled the relevant legislation, so that in 2019 the Ministry for Cultural Heritage completely re-disciplined the matter, providing for a different and more contained role for the SIAE. According to this new regulation, SIAE can no longer conclude exemption protocols, being solely responsible for issuing preventive opinions at the request of the interested party, and for identifying the documentation that the latter must file in order to benefit from the exemption rules. However, even this new discipline was considered flawed by various manufacturers and importers of devices and supports, who argued – inter alia – that it would have assigned to the SIAE again a non-impartial and unequal role. The TAR, with the decision of October 7, 2020, judged the complaints unfounded, but it is to be expected that this decision will only constitute the first stage of a new judicial path.

Applicable legislation
For some time now in Italy – as in other European countries, although not all – the exception to copyright for private copying has been applied. According to the rules natural persons are entitled to make copies of audio and / or video works but only for personal and non-profit use and only for non-commercial purposes. In response to said exception, a lump-sum compensation (compensation for private copying) is due to the holders of copyright and related rights, which is levied by SIAE against those who carry out import, production and marketing of devices and media suitable for audio and video recording in Italy. The previous legislation (art. 4 of the Technical Annex of the decree of the Minister for Cultural Heritage of June 30, 2009) provided that the SIAE could promote protocols for a more effective application of the provisions “also for the purpose of providing objective and subjective exemptions, such as, for example, in the event of the professional use of devices and media or in respect of certain devices for video games. Those application protocols shall be adopted in agreement with the persons obliged to pay the compensation for private copying, or their trade associations”. Following an appeal, the legislation was brought to the attention of the EU Court of Justice which – by decision of September 22, 2016, in case C-110/15 – held that the Italian legislation did not comply with EU rules, as it “subjects exemption from payment of the private copying levy for producers and importers of devices and media intended for use clearly unrelated to private copying to the conclusion of agreements between an entity which has a legal monopoly on the representation of the interests of authors of works, and those liable to pay compensation, or their trade associations, and, on the other hand, provides that the reimbursement of such a levy, where it has been unduly paid, may be requested only by the final user of those devices and media.” As mentioned, following this decision of the EU Court of Justice, the Council of State annulled the aforementioned art. 4 of the Technical Annex to Legislative Decree December 30, 2009. The Ministry for Cultural Heritage therefore issued in 2019 a series of new provisions aimed at re-regulating the matter (provisions which, however, have already been replaced by new decrees, including in particular the decree of the Ministry of June 30, 2020 and the directorial decree of September 4, 2020, without any significant changes having been introduced). The new provisions aim to overcome the complaints that led to the cancellation of the previous legislation, thus providing that the system of granting protocols is replaced by a series of exemptions ex ante, determined by clear and transparent criteria. However, SIAE continues to carry out some specific activities concerning the proceedings related to the exemption, especially in cases different from those typified by art. 2 of the decree of June 18, 2019 (today replaced by the decree of June 30, 2020, of identical content). According to art. 2 in question, in fact, in general the remuneration is not due in the case of use of recording devices and media manifestly unrelated to the making of copies of phonograms and videos for private use, including exclusively professional use. The regulation also provides for some typical exemptions, namely: a) for recording devices and media exported to other countries; b) for recording devices and media used exclusively for carrying out professional instrumental diagnostics in the medical field; c) for recording devices and media, including video game consoles, in which the duplication function of phonograms and videos is not present or has been technically inhibited; d) for recording devices and media used exclusively for the professional activity of duplicating phonograms and videos; e) for recording devices and media sold, also through central purchasing bodies, to public administrations. In this context, the SIAE continues to play a role, since it is the entity which has to be contacted to obtain the identification of the documentation proving the requisite of being manifestly unrelated to private copying in cases other than the above listed ones (which also includes professional use). Furthermore, in all cases the producers and / or importers must quarterly file a declaration with the SIAE containing the analytical indication of the data of exempted sales together with the relative documentation for the performance of the control activities, which may also include the indication of the unique identification numbers of devices and media, as well as the filing of sales invoices. Finally, it is possible to request a prior opinion from SIAE on the applicability of an exemption in a specific case.

The proceedings before the TAR and the decision
In the case decided by the TAR, the plaintiffs – companies producing and importing devices and supports, as well as their trade associations – took legal action stating that the new regulations issued by the Ministry of Cultural Heritage would in any case create a dominant position for the benefit of SIAE, and it would be vitiated by illogicality and excessive burdensomeness. With regard to the first profile in particular, the exercise of the right to exemption would be illegitimately subordinated, in non-typed cases, to a prior “authorization” by SIAE. Therefore, a discretionary power to recognize or not the right of the exemption itself would remain to the SIAE. This would de facto annul the general criteria for the exemption set forth by art. 4, paragraph 1, of the Technical Annex. However, the position represented by the applicants was not shared by the TAR, which considered the reconstruction of the regulatory framework on which the complaints were based erroneous. According to the TAR the new legislation would not assign to the SIAE any power of exemption, which was instead predetermined by law. SIAE’s role would be limited to identifying the documentation the interested party must file, in the cases in which the exemption is not among those typified. In other words, while in the case of the devices addressed by letters a) to d) of art. 2 of the decree, the exemption applies ex ante without the need for SIAE to identify the documentation to be provided as proof of the applicability of the exemption. In other cases, however, it was necessary provide effective proof that on the one hand the devices and supports are not made available to private users and that on the other hand they are clearly reserved for uses other than that of making private copies. The burden of proof falls on the interested party, with the consequence that the pre-identification of the suitable documentation by exchange of correspondence with the SIAE aims to facilitate the fulfillment of the burden itself. In any case, said pre-identification falls within the special powers and functions assigned to SIAE pursuant to art. 182bis law on copyright.

Conclusions
The TAR’s decision enhances the changes made by the new discipline to the role of the SIAE which passes from the subject granting the exemption to the subject responsible for carrying out procedural activities related to the exemption. However, it is interesting to note that the TAR referred to art. 182bis of the copyright law, and consequently to the powers and special supervisory functions that the SIAE still enjoys, which seem to belong to a out-dated system, in which the SIAE was a public economic body with para-publicistic functions, perhaps no longer entirely adapted to the current configuration of the copyright system in Italy. It must be said that the collecting societies have been clearly recognized as operators without special powers and functions and as stake holders of specific interests (those of copyright and related rights holders). As such they are necessarily subject to the principle of “equality of arms” in comparison with other stakeholders, including end users and professional users. In addition, the Italian framework of public authorities also includes the Communications Regulatory Authority (AGCOM), to which competing and, in respect to those assigned to the SIAE, prevailing competences are conferred and whose role could be strengthened, given its major independence from private interests and impartiality.

Simona Lavagnini