Trade Mark Litigation

Studio Legale Jacobacci & Associati Nicoletta Galizia and Massimo Sterpi

1. Sources of Law

1.1 What are the principal sources of law and regulation relating to trade marks and trade mark litigation? (Briefly describe the role of international, federal or state laws and relevance of court decisions, list and briefly describe relevant statutes and international treaties).

The main source of law relating to trade marks in Italy is the recently enacted Code of Industrial Property (‘CIP’), Law Decree 30 of 10 February 2005, which repealed and reorganised all prior legislation on industrial property, including the old Trade Mark Law. The CIP entered in force on 19 March 2005.
Trade Mark litigation between 19 September 2005 and 23 June 2007 followed the procedural rules set out under Law 5/2003 (so-called ‘Corporate Proceedings’), which provided for a new format of litigation for IP matters, including trade mark litigation. Nevertheless, a very recent decision of the Italian Constitutional Court (17 June 2007/23 June 2007) held the unlawfulness of the application of the abovementioned proceedings to IP matters. As a consequence, from 23 June 2007 onwards, trade mark litigations follow the ordinary procedural rules set out under the Code of Civil Procedure applied to all proceedings in Italy. The parties to the actions begun under the Corporate Proceedings can prosecute under its rules or request the application of the ordinary rules by asking the Court to schedule a special hearing finalised to the change of the procedure.
In addition, Italy is party to a number of international treaties regarding trade mark law and aimed at setting a minimum level of protection in member states (such as the Paris Union Convention, the Madrid Agreement and Protocol and the TRIPs Agreement).
Moreover, as a member state of the European Union, Italy is also affected by Community legislation and, in particular, by Directives (such as the recently implemented EC Directive 48/2004 on the Enforcement of IP rights) and Regulations (such as the EC Regulation 40/94 on the Community trade mark and the Regulation 510/06 concerning Geographical Indications).
Court precedents are not binding for future cases between different parties. However, they may certainly have a persuasive effect for future decisions, especially in similar cases and if they represent consistent case law.

1.2 What is the order of priority of the relevant sources, ie which take precedence in the event of a conflict?

Whereas legislation prevails over case law, a well established principle provides for the primacy of EU law, and in particular of EC Regulations (directly binding) and international treaties over internal legislation, the supranational law therefore prevailing in case of conflict.

2. Court and Administrative System

2.1 Can third parties oppose/request cancellation of a national or supranational (eg Madrid Agreement and Protocol, Community Trade Marks) trade mark application/registration in your country? If so, on what grounds? Please briefly describe the opposition/ cancellation procedure(s).

Legislative Decree 447/99 of 8 October 1999 (then repealed and whose provisions are now included in the CIP) has introduced in Italy opposition proceedings against national applications and the Italian portion of an international trade mark, which – however – are not effective yet, as they will become applicable only when the Italian government finally issues the relevant implementing regulation.
As a consequence, nowadays the only possibility for a third party to obtain the cancellation of a trade mark registration – and not of a pending application (see below) – of a national trade mark or of the Italian portion of an international trade mark is to bring a cancellation action before the civil Courts. The action can be based on absolute grounds, relative grounds or non use (see below under question 3.5). In case of trade mark applications, which have not yet matured into registration, the cancellation action may be initiated but it is suspended until the application matures into a registered trade mark. In the light of the above, it is usual to file with the Italian Patent and Trade Mark Office an application for the anticipate grant of the trade mark registration (so called ‘application for acceleration’). In any case, registration does not preclude the possibility of taking judicial action against the validity of the trade mark.
The Italian cancellation action is now regulated by the ordinary rules of civil procedure, as described under question 6.1.
With reference to Community Trade Marks (‘CTM’), oppositions can be lodged within three months following the publication, in the CTM Bulletin, of the CTM application or, for international trade mark designating the European Union, within three months starting from six months after the date of publication provided for under article 147(1) of the CTM Regulation. Therefore, earlier rights do not automatically cause refusal of the CTM application, as the Office for the Harmonisation of the Internal Market (‘OHIM’) does not carry out an examination on novelty. The right holder of an identical or confusingly similar prior Community, national or international trade mark, as well as the owner of an unregistered trade mark – including well-known trade marks protected under article 6 bis of the Paris Convention – or other distinctive signs having more than local significance may file an opposition before the OHIM in Alicante (Spain).
Finally, cancellation actions against registered CTMs may be brought at any time in front of the OHIM according to article 55 of the CTM Regulation.

2.2 In which courts are trade marks enforced? Are they specialised trade marks courts? If not, what level of expertise can a trade mark holder expect from the courts?

Since 2003 civil litigation regarding IP matters – including trade mark litigation – has been concentrated in Italy in a limited number of Courts (currently, 12 first instance Tribunals and 12 Courts of Appeal), within which specialised sections have been set up for exclusively dealing with IP matters (the ‘IP Courts’). While the IP Courts rarely rely on experts on issues of trade mark validity or infringement, recourse to external experts (normally, chartered accountants) is customary to assess damages. In these latter cases, the IP Court can appoint an accountant to give an opinion in writing on the assessment of damages: during the investigation carried out by the Court expert to this purpose, the parties have the right to appoint their own experts that will be involved by the Court expert in a kind of ‘technical mini-trial’ (exchange of written briefs and experts’ meetings). At the end of this investigation, the Court expert will file his/her written report: while it happens often that the Court follows the Court expert’s conclusions and arguments, it is not obliged to do so: in fact, there are quite a number of decisions where the Court did not follow the expert’s conclusions.

2.3 To what extent are courts willing to consider, or are bound by, the opinions of other national or foreign courts that have handed down decisions in similar cases?

No doctrine of binding precedents is applied by Italian Courts. Prior national Court’s decisions may have, however, a persuasive effect on Courts handling similar cases. A similar effect may be recognised also in relation to foreign precedents, which may offer guidance especially in matters not expressly covered by domestic legislation or case law.
However, decisions of the European Court of Justice interpreting EU legislation or national legislation based on EU Directives have binding effect.

2.4 Do the courts deal with infringement and invalidity simultaneously? Or must invalidity actions be brought in separate proceedings? If so, before which court or national or supranational government agency shall they be brought (eg the national Trade Mark Office or the OHIM in Alicante)?

Infringement and invalidity actions can normally be brought simultaneously before the same Court and within the same proceedings. However, an exception is a cancellation action against a CTM registration, that must be requested through an action before the OHIM in Alicante: to the contrary, cancellation of a CTM may be the object of a counterclaim within an action pending before the national Court where same CTM is being enforced. The Italian PTO has no jurisdiction in respect of trade mark nullity claims.

2.5 Who can represent parties before the courts handling trade mark litigation and/or the national or supranational government agency dealing with trade mark validity issues?

Parties to trade mark litigation before the Courts must be represented by one or more lawyers (‘avvocati’) admitted to the Bar in Italy, possibly in conjunction with other lawyers admitted to the Bar within the EU. In respect of any technical expertise which may be possibly resorted to by the Court during infringement or invalidity proceedings, parties may also be represented by trade mark attorneys or other technical experts for addressing the relevant technical issues with the Court-appointed expert.
As to actions before the OHIM in Alicante, the situation is different depending on whether the party has or does not have its domicile or its main place of business or a real and effective industrial or commercial establishment in the EU: please refer to article 88 and 89 of the CTM Regulation in this respect.

2.6 What is the language of the proceedings? Is there a choice of language?

The official language of the proceedings taking place in Italy is Italian, with no other choice. As a consequence, the IP Courts – or the other party to Court proceedings – may require that any documents drafted in a foreign language be filed together with a sworn translation. Sometimes, however, IP Courts do not request translations of documents in English, French or Spanish, as they can directly understand them.
As to opposition or cancellation proceedings before the OHIM, the proceedings shall be filed in one of the languages of the Office, which are: English, French, German, Italian and Spanish. If the language chosen for the opposition or cancellation proceedings is the same language as the trade mark application or the second language indicated when the application was filed, that language shall be the language of the proceedings. If the language chosen for the opposition or cancellation proceedings is neither the language of the trade mark application nor the second language indicated when the application was filed, the opposing party or the party seeking cancellation shall be required to file a translation of his application either into the language of the trade mark application or into the second language indicated when the application was filed. The language into which the application has been translated shall then become the language of the proceedings.
Finally, notwithstanding the above, the parties may always agree that a different official language of the European Union is to be the language of the proceedings (see article 115 (7) of the CTM Regulation).

3. Substantive Law

3.1 To what extent are unregistered trade marks protected under your country’s laws?

The new Code of Industrial Property expressly lists unregistered trade marks among the available industrial property rights. Moreover, Italian case law adopts the key principles governing registered trade marks for the assessment of cases involving unregistered trade marks. Registered and unregistered trade marks are thus protected in a very similar way as to their use in connection with specified categories of goods or services, even though unregistered trade marks do not benefit from the presumption of validity of registered trade marks, can be enforced only between competitors and cannot take advantage of some forms of protection provided for by the criminal law. Unregistered trade marks that are well-known in Italy may also enjoy the protection provided for under article 6 bis of the Paris Convention, protection which may extend also to dissimilar goods and services.
Finally, an unregistered mark which is known only locally may still continue to be used locally in spite of its subsequent registration by a third party, but this prior local use does not affect the validity of the later registration by such a third party.

3.2 How is trade mark infringement assessed? Does protection extend to translations or to conceptually identical but graphically different trade marks?

From a general point of view, the owner of a registered trade mark has the right to prevent third parties from using identical or similar signs for identical or similar products or services. Where the signs used are similar – and not identical – to the registered trade mark and are referred to identical or similar products or services, the use of such signs is forbidden when there is a risk of confusion for the consumer, which can also consist of a risk of association between the two signs. No risk of confusion must be proved in case of identical signs used for identical products or services.
The width of the protection of a trade mark depends, of course, on the degree of its distinctiveness. While the Italian PTO applies quite loose criteria on distinctiveness, granting registration to trade marks which consist of small variations (or foreign translations) of generic or descriptive signs, or which ‘evocate’ the characteristics of the products or services to be distinguished by the mark, as regards such ‘weak’ marks it is then sufficient to use signs which contain minor variations to avoid the risk of confusion.
Finally, a well-known trade mark is protected in our country against the use of identical or similar signs for different kinds of products or services – in addition to identical or similar ones – provided that such use takes undue advantage of, or is prejudicial to, the reputation of the well-known trade mark.
Protection of the trade mark is usually extended to a translation into another language of the same (provided it is understandable to the relevant Italian consumer) or to a conceptually identical but graphically different trade mark. More in general, graphical differences are normally irrelevant in order to exclude the risk of confusion between two signs if they are similar from a literary point of view and/or phonetically.

3.3 Are there other causes of action for trade marks (eg dilution)?

The owner of a well-known trade mark can act against third parties who use similar or identical signs even in other non competing markets if such use can be detrimental to the reputation of the well-known mark or is taking undue advantage of such reputation. Dilution incorporates two kinds of damages: ie ‘blurring’ and ‘tarnishment’. Blurring corresponds to the erosion of the uniqueness of a trade mark in a market, usually as the result of the use of similar trade marks. Dilution by blurring prevents consumers from identifying a trade mark with a particular product, diminishing the link between the product and the trade mark. Tarnishment, on the contrary, refers to the weakening of a trade mark through unflattering associations. Trade Mark dilution by tarnishment occurs when the image of a well-known trade mark is degraded in force of its use by unauthorised third parties.
It has to be noted that Italy did not implement the facultative provision of the EC Harmonisation Directive (ie article 5(5) of EC Directive 89/104) which confirmed the possibility for each member state to permit trade mark owners to act against use of famous trade marks for purposes other than distinguishing goods or services (eg for decoration purposes).
Finally, it has to be stressed that if the trade mark owner does not adequately react against his trade mark being used as a generic description of the product or service, the registration of the mark can be forfeited for becoming a generic name (so called ‘volgarizzazione’).

3.4 Can a trade mark be enforced against a domain name, a trade name, a pseudonym or other distinctive signs?

According to article 22 CPI, a trade mark owner can enforce his trade mark against a domain name, a trade name or other distinctive signs where such signs are confusingly similar to the owner’s trade mark. In fact, our legal system applies the principle of the ‘unity of the distinctive rights’: in particular, according to such principle, the likelihood of confusion/association is not only realised in case of interference between distinctive signs of the same type (for example, between registered trade marks) but also between different types of distinctive signs (eg trade mark/domain name, trade mark/trade name). The risk of confusion taken into account, in fact, is between the activities of the parties and not only between the individual signs.

3.5 On what grounds can a trade mark be invalidated?

A trade mark can be invalidated – or declared forfeited – on the following grounds:

• Absolute ground of invalidity (lack of distinctiveness, genericness, deceptiveness, sign contrary to public order or morality), all of these grounds can apply either if existing at the time of registration or if arisen thereafter;
• Relative ground of invalidity (likelihood of confusion, conflict with an earlier trade mark or other distinctive sign or IP right, registration in bad faith);
• Non-use for more than five years after registration (see question 3.6 below).

3.6 Must use requirements be satisfied to maintain the trade mark registration? If so, is there any definition of what constitutes use?

Trade mark rights can be maintained if use of the sign is actual, effective, and continuous, as it is not in the public interest to grant monopoly rights on signs which are no longer used. In particular, for a trade mark registration, failure to actively use it may also expose the registration to removal from the Register after a certain period of time. In this respect, article 24(1) CIP provides for the loss of the rights referred to the trade mark registration if it is not used for five years as of its registration date or if such use is suspended for a period of five years. Removal from the Register may only occur upon request of an interested third party, but not ex officio.
The Italian leading authors and case law never gave a precise definition of what constitutes ‘use’ of a trade mark. In theory, in our country any exploitation of a trade mark is qualified as sufficient to avoid the forfeiture of a trade mark registration. As a matter of fact, use of a trade mark can be inferred by:

• affixing the sign to the goods or services;
• offering the goods under that sign;
• importing or exporting the goods under that sign; or
• using the sign on business papers or in advertising.

The same principles apply for CTMs, even though it must be taken into account that – according to the Guidelines – use in one or more member states is normally sufficient to avoid forfeiture of the CTM throughout the European Union (see also ECJ case Opel, C- 48/05).

3.7 What other defences, if any, are available to an alleged infringer? Does your country’s law provide for a prior user rights?

Until some years ago, it was possible for an alleged infringer to claim invalidity of the trade mark being enforced against him because it was anticipated by third parties’ earlier rights. Now, this defence is no longer possible, as the alleged infringer can only raise a prior rights defence based on his own rights (including unregistered rights), and not on those of third parties.
However, the alleged infringer can still try to prove that the trade mark being allegedly infringed does coexist with a number of similar trade marks of third parties, to prove that it is a ‘weak’ trade mark and, therefore, that also minor differences may be sufficient to avoid confusion.
As to prior use of the alleged infringer, there may be two scenarios:

• prior use is merely local: in that case, the alleged infringer may continue to use his trade mark, but only within the same local scope and this does not impair the validity of the trade mark registration being enforced against him; or
• prior use is more than merely local (ie it concerns some regions of the country): in this case, the alleged infringer may also claim nullity of the registration being enforced against him.

3.8 To what extent can enforcement of a trade mark expose the trade mark holder to liability for an antitrust violation?

Trade mark rights can surely interfere with antitrust legislation and can be limited by the latter. A typical case are trade mark coexistence agreements or selective distribution agreements, which may determine alterations to the market dynamics.

3.9 Can a court only partially invalidate a trade mark?

A trade mark registration can also be partially invalidated by a Court, in which case the decision will provide for a limitation of the list of goods and services covered by the registration.

3.10 Is it possible to amend a registered trade mark during a lawsuit?

Amendment to the list of goods and services covered by a trade mark registration may be requested at any time, and also during a court action, provided that it is requested by all parties that own registered rights on the trade mark (eg co-owners and registered licensees).

3.11 Are there any grounds on which an otherwise valid trade mark can be deemed unenforceable, owing to misconduct by the trade mark holder, or for some other reason (eg expiry of time limit)?
A trade mark application has effect and can be (provisionally) enforced from the date on which the application is filed, on the condition that the application is granted before the court issues its decision on the merits.
In our practice there are two main time limits:

• it is not possible to prevent use or apply for invalidation of a junior identical or similar registered trade mark if the owner of the prior right had knowingly tolerated such use for more than five years (ie the junior registration becomes incontestable for the owner of such prior rights); and
• the owner of a trade mark being infringed can only request damages for the five years preceding the court action (or the cease and desist letter which preceded the court action).

3.12 Can a trade mark holder bring a lawsuit claiming both trade mark infringement and unfair competition for the same set of facts? Is it possible to bring parallel unfair competition proceedings, whether or not the trade mark is registered?

It is certainly possible to bring a lawsuit for both unfair competition and trade mark infringement, provided that the (different) requirements of each action exist at the same time. In fact, whereas to claim trade mark infringement it is sufficient to prove the risk of confusion between the respective marks, the claim of unfair competition also requests proof that the owner of the infringed trade mark and the infringer are actually competitors and there is an effective risk of confusion between the respective products/services actually on the market (and not only between the respective signs).
The owner of a non-registered trade mark (except for the well-known trade marks protected under article 6 bis of the Paris Convention) can only bring an action for unfair competition against a competitor, by proving that there is an effective risk of confusion between the respective signs and the respective products/services.

4. Parties to Litigation

4.1 Who can sue for trade mark infringement (trade mark holder, exclusive licensee, non-exclusive licensee, distributor)? Does a licensee need to be registered to sue?

An action for trade mark infringement may be brought by either the owner of the trade mark (whether the original owner or the assignee) or by the licensee (whether exclusive or, under certain conditions, non-exclusive: see below).
The distributor, not being the owner of any rights in the trade mark, cannot sue for trade mark infringement (whereas he can sue for unfair competition).
As no specific rule is provided by the law in respect of actions by licensees, some case-law precedents have not allowed an infringement action to be brought by a non-exclusive licensee and required that the action be brought jointly by the trade mark owner and the non-exclusive licensee, or the latter proves that the licence agreement permitted him to sue. To the contrary, it is widely recognised that the exclusive licensee can sue in his own name, as he enjoys all rights of the trade mark holder.
No registration of the licence is needed to allow the licensee to sue. The existence of the licence can be proved by all means, including presumption (eg a licence will be presumed in case of a joint action). Normally, evidence is constituted by a copy of the licence agreement.

4.2 Under what conditions, if any, can an alleged infringer bring a lawsuit to obtain a declaratory judgment on non-infringement?

A lawsuit to obtain a declaratory judgment on non-infringement can be brought only by an alleged infringer, ie by a person against whom the trade mark holder has already raised claims for trade mark infringement (eg through a cease and desist letter).

4.3 Who can be sued for trade mark infringement? Can the company directors be sued personally? Under what conditions, if any, can someone be sued for inducing or contributing to trade mark infringement by someone else?

Any person participating in the use of the trade mark can be sued for trade mark infringement. Typically, in case Company A fabricates and marks the infringing products and Company B only distributes the infringing products, both will be jointly liable vis-à-vis the trade mark holder, even if the distributor Company B – where in good faith – could subsequently ask to be kept harmless from Company A.
Company directors cannot be sued personally unless the alleged infringing activity is claimed to refer to them personally – eg in case of criminal actions – and not as legal authorised officers of the company.

4.4 Is it possible to add or subtract parties during litigation?

Third parties may intervene in pending proceedings either on a voluntary basis (eg the trade mark holder when the action has been commenced by the licensee) or by order of the judge (eg when the plaintiff failed to extend the nullity action to all persons registered as owners of rights on the trade mark). Rules of procedure provide for stringent time limits for the intervening parties to raise or support claims in the proceedings, depending on the various situations.
Subtraction of parties during litigation is not allowed as a general rule, but it is possible only in specific cases provided under the law and upon order of the judge (eg when the guarantor intervenes and agrees to continue litigation in place of the guaranteed party, or when the right which is the object of litigation is assigned during the proceedings and the new owner intervenes: in both cases, however, the consent of all the other parties to the proceedings is required).

5. Enforcement Options

5.1 What options are open to a trade mark holder when seeking to enforce its rights in your country?

A wide range of options are open to a trade mark holder to enforce its rights, including civil proceedings, criminal proceedings, border measures and, as the case may be, arbitration.

5.2 Are criminal proceedings available? If so, what are the sanctions?

Criminal prosecution in respect of trade mark counterfeiting or infringement may be based both/either under:
a) article 473 of the Italian Criminal Code, which provides for imprisonment up to three years and a monetary fine up to €2,065.00 for whoever counterfeits or alters registered trade marks having effect in our country; and/or
b) art 474 of the Italian Criminal Code, which provides for imprisonment up to two years and a monetary fine up to €2,065.00 for whoever sells or offers for sale products bearing counterfeit registered trade marks;
c) article 517 of the Italian Criminal Code, which provides for imprisonment up to one year and a monetary fine up to €1,032.00 for whoever counterfeits or alters unregistered trade marks;
d) article 127 of the CIP, which provides for a monetary fine up to €1,032.91 for whoever manufactures, sells, exhibits, uses industrially or introduces in the state products infringing a valid IP right;
Whereas in case d) criminal prosecution might be requested, and may later be stopped by the right owner by filing pleadings, in the other cases prosecution can also be initiated by the Public Prosecutor on its own motion and cannot be stopped by the right owner as the action will be prosecuted ex officio.
It must be stated that the relationship between the aforementioned three provisions under a), b) and d), which clearly overlap, is very much unclear and disputed.

5.3 Are border measures available?

Seizure of imported infringing products may be obtained through the customs authorities following the procedures provided under EC Regulation 1383/2003. Under this Regulation, customs authorities are required – where they ascertain that the goods being imported may infringe an IP right, usually upon consulting the right holder – to suspend release of or detain same goods, informing promptly the relevant right holder. The right holder who previously submitted an application to customs has ten working days – which in justified cases may be extended for further ten working days – to inform the customs authorities that infringement proceedings have been initiated before the competent civil or criminal Courts. In case of blatant counterfeiting, the customs authorities must also inform the Public Prosecutor thereby initiating criminal proceedings. Failing timely commencement of any such proceedings, either civil or criminal, the goods are released. The application for customs’ intervention may be lodged by the right holder in advance or upon notification by the customs authorities of suspension of release or of detention. In the latter case, the application of the right holder must be lodged within the following three working days from being notified by the customs authority. Simplified procedures apply under the above EC Regulation to obtain destruction of the goods seized, even if the implementing rules have not yet been issued in Italy.

5.4 To what extent are courts willing to grant cross-border or extra-territorial injunctions?

Cross-border injunctions effective throughout the entire EU are expressly provided for by article 99 of the CTM Regulation, provided that a CTM is being enforced and action is taken in the member state indicated by article 93 of same Regulation (ie, where the infringer has its domicile or permanent establishment within the EU, plus other cases).
As to national trade marks or international trade marks under the Madrid System, cross-border injunctions on IP matters have been rarely issued by the Italian Courts, starting with the landmark precedent by the Court of Bolzano of 22 April 1998, in respect of protected geographical indications. Such measures are in general considered admissible in trade mark litigations even if the debate is still open. Cross-border injunctions in respect of a trade mark infringement, in fact, may be based on the provision allowing the request for preliminary relief before the Court of a member state even if the Court of another member state has jurisdiction on the merits. Some difficulties may arise where proceedings pending in the relevant foreign jurisdictions involve the validity of the registration (see, in this respect, the decisions of the European Court of Justice in matter of patent, both pronounced on 13 July 2006, C-4/03 and C-539/03).

5.5 To what extent do courts recognise the blocking effect of ‘torpedo’ actions abroad?

‘Torpedo’ actions were typically brought in Italy to try to take advantage of the length of trade mark litigation here: now, however, after the establishment of the new IP Courts, the duration of trade mark litigation is much shorter, so that this advantage is almost non-existent.
Most recent Italian precedents have also shown the Courts’ negative attitude towards ‘torpedo’ actions.
‘Torpedo’ actions – aimed at blocking infringement proceedings by seeking a declaratory judgment of non-infringement before the Courts of a different country, typically of the country of the alleged infringer – are based on the special jurisdiction provision of the Brussels Convention (now EC Regulation 44/2001) in respect of tort liability, allowing plaintiffs to sue before the Courts of the place where the harmful event occurred (or may occur, in the new version of the Regulation). Recent Italian precedents, following the case law of the ECJ, underlined the fact that the general principle of domicile of the defendant as the main basis for jurisdiction can not be prejudiced by too wide an interpretation of the cases of special jurisdiction. In particular, according to such precedents, special jurisdiction for tort liability would not help in establishing an action for non-infringement, as in such a case no unlawful behaviour and no harmful event is claimed to occur by the plaintiff, who claims exactly the contrary.
As a consequence, the abovementioned case law leads to the blocking effect of ‘torpedo’ actions not being permitted on the grounds of lack of jurisdiction when the non-infringement action is commenced in a EU member state where the trade mark holder – whose trade mark is the subject of a non-infringement ‘torpedo’ action – is not domiciled.

5.6 To what extent are alternative dispute resolution (ADR) methods (such as arbitration or mediation) available to resolve trade mark disputes? How widespread are ADR methods and in which sectors? If arbitration is available to assess invalidity, will your Trade Mark Office recognise and execute an arbitral award declaring a trade mark invalid?

Arbitrations in respect of IP matters have recently been expressly provided for under the new Code of Industrial Property, even if they are not very common in Italy. Arbitration is therefore available also in respect of trade mark litigation, as it was generally admitted under prior legislation at least in respect of trade mark infringement issues. Doubts have been raised in the past as to whether arbitration was available in respect of trade mark invalidity issues: this has been generally excluded and admitted in isolated case law by underlining that the arbitral decision on invalidity would only have effect inter partes and not erga omnes. This issue is not expressly dealt with by the new CIP, which however allows the overcoming of one of the major arguments against arbitration on trade mark invalidity under the old law, ie the compulsory participation of a Public Prosecutor in trade mark invalidity proceedings, which has now been repealed. However, the other major hurdle to arbitration on trade mark invalidity issues, ie the fact that only a Court may issue an invalidity decision with effect erga omnes, has not been expressly amended by the new legislation. Thus, it remains to be seen how the case law will apply the new rules in respect of this issue.

6. Procedure in Civil courts

6.1 What is the format of trade mark infringement proceedings?

The format of trade mark infringement proceedings, after a short parenthesis of two years in which the so called ‘Corporate Proceedings’ applied, has been changed again, coming back to an ordinary civil proceedings format (see above question 2.1), as recently amended to render it much faster.
After serving the deed of summons to the defendant and subsequently filing it with the court, there is a first phase in which the parties present their claims and the facts on which they are based. Such first phase can end up – upon specific request of both parties – in a hearing finalised at trying to amicably settle the dispute.
After this first phase – which should last three to four months from the first hearing – there is a phase dedicated to the acquisition of evidence.
The last phase will be devoted to permit each party to submit its final conclusions to the Court both verbally, during a hearing, and in writing, by filing a final brief and a reply to the other side final brief; then, in a couple of months the court will issue its decision in writing.

6.2 Are disputed issues decided by a judge or a jury?

Cases regarding IP matters – including trade mark litigation – are decided by a panel of three professional judges.

6.3 To what extent are documents, affidavits, witnesses and/or (court-appointed or private) experts used? Is it possible to cross-examine witnesses?

The parties may file documents in support of their claims and exceptions up to the hearing dedicated to the taking of evidence.
Affidavits and, in general, sworn declarations by third parties, have the same value as any other written documents and must be confirmed by oral witnesses if the other party so requests.
Witnesses must be indicated by the requesting party, also indicating the actual questions that they will be asked to respond. In civil litigation, it is not possible to cross-examine witnesses, but the court may – on its own motion or upon the parties’ request – ask witnesses to clarify specific facts and/or confront them with other witnesses in case of contrasting statements.
Technical expertise is not usually resorted to by the Court in trade mark matters, whereas it is customary to appoint accountants to assess damages (see above, under question 2.2).

6.4 To what extent is survey evidence used (eg to support acquired distinctiveness, likelihood of confusion)? What is its relevance in proceedings (eg party allegation, evidence)? Who decides which consumers are questioned in the survey (eg the court or court expert)? What level of cost should one expect to incur to carry out a survey? Are these costs recoverable from the losing party?

Survey evidence is occasionally used in our system to support the acquired distinctiveness of a trade mark, as well as the actual existence of confusion between two signs.
When resulting from an activity of one of the parties, survey evidence is not normally appreciated by the Courts. Appreciation may be higher if the party applies to the Court to order survey evidence and this is carried out by an expert appointed by the Court. In general, however, Italian Courts very rarely resort to survey evidence.
In case the survey evidence is applied for by one of the parties, this party shall provisionally bear its costs, whereas these costs will be normally charged to the losing party at the end of the proceeding (even if the Court has a large discretionary power in the allocation of costs).

6.5 Is evidence obtained for criminal proceedings admissible in civil proceedings, and vice versa?

Evidence obtained for criminal proceedings is admissible in civil proceedings and vice versa. For example, the minutes of criminal proceedings can be used in a civil action. On the contrary, minutes relating to evidence acquired in civil proceedings are admissible in criminal proceedings only if the civil action has been decided and the decision has become final.

6.6 To what extent is pre-trial discovery permitted? If it is permitted, how is discovery conducted? If it is not permitted, what other, if any, mechanisms are available for obtaining evidence from an adverse party or from third parties?

Discovery, whether before or during trial, is not permitted as a general rule under Italian law. To a limited extent, however, specific mechanisms for obtaining evidence from the adverse party or third parties are available as preliminary relief and within proceedings on the merits.
As preliminary relief, the trade mark holder may apply to obtain evidence of the infringement of his trade mark, including invoices, accountancy, samples, etc (see below). Moreover, in case of trade mark piracy (ie in case of willful and systematic infringement, carried out on a large scale), the applicant may request, upon supplying evidence of circumstances likely to endanger his recovery of damages, preventive seizure of the assets of the infringer, including the blocking of its bank accounts up to the amount of presumed damages; in this regard, the court may order the communication of bank, financial or commercial documents, or appropriate access to the relevant information.
Within proceedings on the merits, the judge may order the defendant, upon plaintiff’s request, to exhibit documents or information in respect of which the plaintiff has provided sufficient circumstantial evidence. In such a case, the judge may also order the defendant to provide all appropriate elements to identify other subjects involved in production and distribution of the infringing products, as well as to exhibit commercial and financial documents in case of piracy (defined as above).
In both preliminary proceedings and proceedings on the merits, the judge may also order the defendant or third parties involved in the production, manufacture or distribution of infringing goods or services, upon justified and proportionate request of the plaintiff, to provide information on their origin and distribution networks (so called ‘right of information’). The plaintiff must indicate the persons to be heard and the facts on which they will be questioned by the Court. Where the person being deposed refuses to respond or supplies false information, he/she will be subject to criminal sanctions.

6.7 What level of proof is required for establishing infringement or invalidity?

The plaintiff must provide full evidence in support of its claims following the principle of the burden of proof, whereby each party must prove the facts on which its claims and/or exceptions are based. The decision of the Court must then be based only on the evidence provided by the parties.

6.8 How long do trade mark infringement proceedings typically last? Is it possible to expedite this process?

Recent legislation providing for a new format of civil procedure – which now applies also to IP litigation – and for the exclusive jurisdiction of specialised IP Courts, has significantly expedited the length of trade mark infringement proceedings, which typically last from a few months to a maximum of two years, depending on the level of complexity of the issues involved and on the need for technical/economic expertise (as well as subject to the Courts’ workload).
In case of urgency, interim relief may be obtained in a matter of days.

6.9 What options, if any, are available to a defendant seeking to delay the proceedings? Under what conditions, if any, can proceedings be stayed? How can a plaintiff counter delaying tactics of defendant?

The defendant is not left with many options in seeking to delay the proceedings, other than raising all available exceptions. Proceedings can be stayed upon joint request of both parties for no more than four months. In addition, the Court must stay proceedings when the decision of the case depends on the decision of a different case already pending before a different Court. If a CTM is being enforced before a national Court, the Court could decide to stay the proceedings if the same CTM is subject to an invalidation action before the OHIM. At the same time, opposition proceedings before the OHIM, according to Rule 20(7) and 21(2) of the EC Regulation 2868/95 of 13 December 1995 implementing Council Regulation (EC) 40/94 on the Community Trade Mark, can be stayed by the OHIM if: (i) the opposition is based on a still pending application; or (ii) the opposition is based on a still pending application for geographical indication or designation of origin; or (iii) where the suspension is appropriate under the circumstances; or (iv) if there is a number of opposition proceedings against the same application.

7. Final Remedies

7.1 What remedies are available against a trade mark infringer (final injunction, delivery up or destruction of infringing goods, publication of the decision, recall-order, monetary remedies, etc)?

The remedies available against a trade mark infringer are a final injunction with provision of a penalty, withdrawal of the infringing goods from the market, seizure and destruction or assignment to the trade mark holder of the infringing goods, publication of the decision, damages.
According to article 124 (3) CPI, the destruction of the infringing goods cannot be ordered if it is prejudicial to the national economy, in which case the trade mark holder is only entitled to damages. If the infringing goods may be lawfully used subject to their modification, the Court may order their provisional recall with the possibility of putting them back on the market when modified, instead of their destruction.

7.2 To the extent it is possible to obtain a final injunction against future infringement, is it effective against the infringer’s suppliers or customers?

The injunction, as well as the removal from the market, whether final or provisional, can be ordered against the infringer or any intermediary who is party to the proceedings and whose services have been used to commit the infringement. Therefore, only suppliers and customers that were party to the proceedings will be bound by the injunction.

7.3 What monetary remedies are available against a trade mark infringer (reasonable royalty, lost profits, account of profits, or some other basis)? Are punitive damages available? If so, under what conditions?

In assessing damages, the court must take into account all appropriate elements, such as the negative economic consequences, including lost profits, which the right holder has suffered, the infringer’s profits and, where appropriate, elements other than economic factors, such as the non-monetary prejudice caused to the right holder by the infringement (eg damage to commercial reputation, tarnishment, defamation, other moral damages).
The Court may also set damages as a lump sum, in which case the lost profits are determined in an amount which cannot be less than the royalties that would have been due if the infringer had obtained a regular licence at market rates. In determining the royalty to be paid by the infringer, recent case law has on some occasions applied an increased royalty, usually by half, as compared to usual market standards, so as to take into account all the costs normally borne by a regular contractual licensee (eg advertisement obligations, quality controls, minimum guaranteed royalties and so on).
In any event, the right holder may request the reversion of profits made by the infringer as an alternative to recovery of the lost profits, or in addition thereto in as far as they are in excess of lost profits.
Punitive damages are not available under Italian law.

8. Preliminary relief

8.1 Is preliminary relief available? If so, what preliminary measures are available (eg preliminary injunction) and under what conditions?

Preliminary relief is available both before and during proceedings on the merits. In particular, the right holder may request description, seizure, withdrawal from the market of the infringing products, injunction with provision of a penalty, seizure of assets to ensure recovery of damages in specific cases, publication of the decision. In order to obtain preliminary relief, evidence must be given of both:

• the prima facie existence of an infringement of the applicant’s rights; and
• a serious and irreparable damage caused to the applicant by the infringer.

8.2 Is ex parte relief available, where defendant is given no notice at all? If so, under what conditions?

Preliminary relief may also be granted ex parte, ie without having previously heard the party against which the measure is directed, but only in circumstances in which hearing the other party would prejudice the enforcement of the measure requested or in cases of extraordinary urgency. In such a case, with the same order the judge schedules a hearing for appearance of both parties, to be held within the following 15 days and at which the order already issued may be confirmed, modified or revoked.

8.3 Is plaintiff entitled to ask for an order that defendant’s premises are searched and a description of the infringing goods (and the accounting relating thereto) is made in order to establish proof of infringement (saisie-contrefaçon)? If not, what other mechanisms, if any, are available for seizing and preserving evidence for trial?

With a motion for preliminary relief, the plaintiff may also request description of the infringing products and of the relevant means of production as well as of any other evidence relating to the alleged infringement, such as accounting and commercial documents, etc. Typically, proceedings for description are commenced in order to obtain pre-trial evidence of infringement (provided the requirements for preliminary relief are met) and in order to use such evidence within the action on the merits to follow. The order for description (if not accompanied by a request of seizure) cannot be appealed against. If no infringement is shown as a result of the description operations, the claimant is subject to possible liability for damages, provided that the other party pursues this claim and gives the necessary evidence within a subsequent action on the merits. In view of possible liability for damages, the judge may order the applicant to provide a security.

8.4 Can the defendant put the validity of a trade mark at issue in preliminary injunction proceedings?

Invalidity of the trade mark within preliminary proceedings can be raised at any time by the defendant as an exception against the infringement claim and, where supported by adequate evidence, must be taken into account by the Court. An interlocutory decision of the Court on invalidity during the preliminary proceedings cannot become res judicata. A final decision stating invalidity of the trade mark and ordering its cancellation may only be obtained within subsequent proceedings on the merits.

8.5 What is the format of preliminary injunction proceedings?

Upon application by the right holder seeking preliminary relief, the Court – if not proceeding ex parte – schedules at short term a hearing for appearance of the parties, at which the case is discussed and, where needed, evidence is gathered on an informal basis. The order is issued at the end of the hearing or, in most cases, shortly thereafter.
When hearing the other party would prejudice the enforcement of the measure requested, the order may be issued ex parte and a hearing is scheduled within the next 15 days for discussing the case with both parties with a view to confirming, modifying or revoking the order.

8.6 To what extent are documents, affidavits, witnesses, survey evidence, and/or (court-appointed or private) experts used in preliminary injunction proceedings?

During preliminary injunction proceedings, evidence is gathered on an informal basis in view of the urgency to proceed. Whereas affidavits have in principle the same value of other documents filed by the parties, any witness or person informed of the facts at issue may be heard, where the judge deems it appropriate, at the hearing for discussion of the application. Court-appointed or private experts may be used if the judge agrees to resort to technical expertise on specific issues regarding infringement and/or validity of the trade mark enforced: in trade mark cases, however, it is very rare that the court resorts to experts during the urgency proceedings.

8.7 What level of proof is required for establishing infringement or invalidity in preliminary injunction proceedings?

Prima facie evidence is required and sufficient within preliminary proceedings.

8.8 How long do preliminary injunction proceedings typically last?

Preliminary proceedings typically last from a few days up to a maximum of two to three months, depending on whether or not the measures are granted ex parte, and whether or not the judge resorts to technical expertise.

8.9 Where a preliminary injunction is granted, is it necessary to start main proceedings to confirm the preliminary injunction?

Upon issuing an order for preliminary injunction, the judge sets a deadline within which the parties must initiate proceedings on the merits. Where the judge does not set a deadline, proceedings on the merits must be commenced within 20 working days or 31 calendar days, whichever is the longer, from the communication of the decision.
If proceedings on the merits are not initiated within the applicable deadline, or if proceedings on the merits are extinguished after their commencement, the preliminary injunction loses effect.
This rule does not apply, however, in respect of urgency measures granted under article 700 of the Code of Civil Procedure (which apply mainly to unfair competition claims) and of preliminary relief anticipating the effects of the decision on the merits (see article 131 CIP), such as in case of an injunction not accompanied by a seizure or withdrawal order: in these cases, either party may commence proceedings on the merits at any time, failing which an agreement on stabilisation of the preliminary relief will be implied.

9. Appeal Procedure

9.1 What avenues of appeal are available for a defeated party in main proceedings or preliminary injunction proceedings? Under what conditions?

The appeal against a first instance decision must be lodged before the specialised section for IP matters of the Court of Appeal within 30 days from service of the decision to the losing party or, in default of service, within one year from publication of the decision (please note, however, that the term is suspended for 45 days between 1 August and 15 September each year, so lasting – in effect – one year and 45 days).
The appeal against a preliminary injunction must be filed before a panel of three judges of the same IP Court within 15 days from communication of the order.
Both the appeal against a first instance decision and the appeal against a preliminary injunction involve a new consideration of the facts and the points of law of the first instance decision, with the exclusion of new claims. However, whereas an appeal on the merits implies stringent limitations on the filing of new evidence, the appeal against a preliminary injunction allows filing of new documents.

9.2 How long do appeal proceedings typically last?

Appeal proceedings on the merits typically last from 12 to 18 months.
Appeal proceedings on preliminary relief typically last from one to two months. Additional time may be needed if technical expertise is resorted to in the course of the appeal proceedings.

10. Litigation Costs

10.1 What level of cost should one expect to incur to take a case through to a first instance decision, preliminary injunction proceedings and/or appeal proceedings?

Litigation costs largely depend on the complexity of the case. Under normal circumstances, legal costs for an action on the merits may vary from €15,000 to €40,000 in the first instance and from €15,000 to €25,000 in the second instance. Costs for preliminary proceedings may vary from €10,000 to €20,000 in the first instance and from €10,000 to €15,000 in the second instance. The above costs do not include the fees of technical experts, if any, nor other costs such as translations, appointment of local associates, travel, and others.

10.2 Are costs recoverable from the losing party?

As a general rule, the winning party is entitled to recover all its legal costs from the losing party, but this is a matter where the court has a large discretionary power. In particular, the court freely liquidates the amount of legal costs to be reimbursed by the losing party (which are usually much lower than the actual amount of legal costs borne by the winning party) and may set off legal costs between the parties in a case of particular complexity or where some of the claims of the winner were rejected. In general, normally only 30-60 per cent of actual legal costs are recovered by a winning party.

11. Forthcoming Legislation

11.1 What are the important developing and emerging trends in your country’s trade mark law?

Trade mark law – and more generally intellectual property law – has been recently affected in a significant way by new legislation, providing for a unique body of substantive rules and, even for a limited period of time, a new format of litigation. Current discussions are mainly focused on the new legislation, its interpretation and effects.
Certainly, implementation of a number of EU Directives, the last one being the Enforcement Directive (2004/48/EC), has recently provided much more effective means to gather information from the infringer and to liquidate damages, so making it much easier to counter any unlawful activities affecting IP rights.
Moreover, it has been noted that IP Courts are much more efficient in acting quickly and liquidating substantial damages.

11.2 To the extent it relates to trade mark enforcement, please outline any major trade mark legislation in the pipeline.

New legislation has been recently enacted in respect of trade mark law – and more generally intellectual property law – through the Code for Industrial Property, which entered in force on 19 March 2005 and has been amended since, recently by implementing EC Directive 48/2004 on the enforcement of intellectual property rights.
The most relevant forthcoming legislation is the proposed EU directive on criminal sanctions for IP piracy.

12. Useful References

12.1 Please identify any useful works of reference relating to trade mark law and trade mark litigation in your country including useful websites.

Scuffi – Franzosi – Fittante – Il Codice della Proprietà Industriale – CEDAM – Padova – 2005;
Marchetti – Ubertazzi – Commentario Breve alle Leggi su Proprietà Intellettuale e Concorrenza – CEDAM – Padova – 2007;
Ufficio Italiano Brevetti e Marchi, www.uibm.gov.it