(Court of Milan, Specialized Section in Enterprise Matters, order no. 62286/14 of 11.12.2014)

A court order dismissing an interim motion on account of prolonged negotiations between the parties to the proceedings is invalid, according to a recent appeal ruling issued by the Enterprise Matters Section of the Court of Milan.

A renowned footwear manufacturer had sought precautionary measures before the Court of Milan against two alleged infringers of some of its registered trademarks and designs. At the first hearing, the appointed Judge invited the parties to explore the possibility of a settlement, urging the applicant to put forward a compensation proposal, and referred the case to the next hearing. Negotiations, however, continued for several weeks, without the parties reaching an agreement. Following the second joint request of the parties to further postpone the hearing in order to continue their negotiations, the Judge held that the renewal of a request for referral was the expression of a common dilatory behaviour and evidence that there was no danger of irreparable harm, thus dismissing the motion without examining the merits of the case and compensating between the parties the costs of the proceedings.

The applicant filed an appeal before a panel of three judges of the same Section, which substantially upheld it.

The appeal judges found that not only, in this instance, had only 40 days elapsed from the start of negotiations, a time they considered anything but excessive in relation to the economic interests at stake and the legal nature of the parties involved (which were all corporations and thus had complex internal decision-making procedures); but that, on a more general level, even assuming that there had been undue delay in negotiating a settlement, this would still not be indicative of a lack of danger of irreparable harm.

The court reasoned that “no relationship whatsoever can be held to exist between the difficulty of reaching an agreement (or even the unwillingness to reach it by one of the parties, because of its confidence in the merits of its case, and in light of its full right not to settle ‘at all costs’) and the existence of the rights claimed and/or the permanence of a situation of danger in the market“.

These considerations were followed by an order annulling the first instance ruling and, upon examination of the merits of the case, granting the urgent remedies sought by the applicant.