On 5 July 2022, the Company and IP Specialised Division of the Court of Milan filed a landmark judgment in an infringement case, in which it established:

  • the liability of the parent company – not only for the damages caused, but also for the restitution of the profits made by its subsidiaries; and
  • that the Italian trademark owners anti-counterfeiting association (INDICAM), a member of the European Brands Association (AIM), is entitled to participate in infringement cases brought by its members – not only by filing amicus curiae briefs, but also by actively intervening and taking part in oral hearings. Such participation enables INDICAM to support the recognition of case law principles of general interest to its members, thus pursuing its own associative purposes.


The case concerned the Inditex Group (the owner of the Zara brand), which had allegedly copied two of Diesel's fashion product models (ie, a pair of jeans and a pair of shoes). Diesel requested damages and the restitution of the profits made by the infringer.

The peculiarity of the case was that the Inditex Group comprises approximately 100 companies, 80 of which were involved in the marketing of the counterfeit products in question. Further, the Inditex Group's transfer pricing policy meant that the profits generated by the infringing products had been divided between all of these companies, only a few of which were party to the Milan lawsuit.

The expert accountant appointed by the Court ascertained that:

the Inditex Group's business model is based on the principle of a 'purchasing centre' managed by the parent company, which produces (or imports) and then resells the products at a very low cost to the subsidiaries, which apply significant mark-ups to retail sales.

As a result, "the higher profits collected by the subsidiaries are then included in the consolidated financial statements as group profits".

This business model could therefore severely limit the effectiveness of the deterrence measure of the counterfeiter having to return its profits, since it would be materially impossible to bring all the parties involved in the counterfeiting (and the related profits) together in a single case. This would give rise to monstrous trials with disproportionate notification and cost burdens, as well as timeframes and difficulties that would be incompatible with the most basic requirements of procedural economy and with achieving the fundamental objective of infringement lawsuits, which is for the offence to be stopped.

The plaintiff therefore argued that the parent company was also liable for the retroversion of profits (and, in any case, for the calculation of the damages suffered by the plaintiffs, which is to be determined on the basis of all the "benefits made by the infringer" pursuant to article 125(1) of the Italian Industrial Property Code, in accordance with European Commission Directive No. 48/2004). The judgment was thus of paramount importance to INDICAM, which pursues as its associative purpose the effective and efficient fight against infringement, in the interests of all its members (including Diesel), of the market as a whole (and that of branded products in particular) and of consumers.


First, the Court admitted INDICAM's interest in intervening in the proceedings, holding that "for that purpose it is sufficient that it [ie, INDICAM's intervention in the proceedings] be effectively and concretely reflected in the claims of the respondents, irrespective of their admissibility and merits". This interest finds a basis in article 2601 of the Italian Civil Code, which provides that "[a]ction for the repression of unfair competition may also be brought by professional associations and bodies representing the category". This provision has been interpreted in the sense of acknowledging that trade associations represent a widespread interest – see, for example, Supreme Court of Cassation case No. 11404 (20 December 1996), cited with approval by Supreme Court of Cassation case No. 7676 (3 April 2020), which held that such an interest exists in any case where there is also "direct injury to the specific interest of which the professional association is the bearer". The judgment under review is important because it recognises that such associations may intervene in litigation to request that their members' claims that are in line with these purposes be granted.

With regard to the merits, the Court, while considering the infringer's profits only in the context of the compensation for damages (and not as the subject of an independent claim, which it held had not been brought by Diesel in a sufficiently timely manner), ruled that:

the demonstration of a drop in turnover of the infringing right holder's company is by no means an indispensable element for the proof of the damage by infringement, which is not necessarily based on the analysis of the sales flows respectively recorded by the infringer and in the same period by the right holder.

According to the Court, the prejudice to the latter's marketing opportunities must also be taken into account, on a presumptive basis – considering, for their quantification, the benefits achieved by the infringer, as prescribed by both Italian and Spanish law, respectively applicable to the activities of some of the defendants.

In particular, the Court held that it was "admissible to trace back to the benefits obtained by the parent company also those obtained by the subsidiaries for the subsequent marketing stages" carried out by it in the countries covered by the infringed IP rights (in this case, in the European Union). This conclusion was based:

  • on the one hand, "on the consideration that the parent company . . . materially carried out the initial stage of the offence - acquiring the infringing products in a centralised manner and distributing them locally through its subsidiaries - and that therefore its contribution was also an immediate and direct cause of the further damage resulting from the distribution of the products to the consumer"; and
  • on the other hand, on the fact that in the case at issue "in addition to the shareholding control relationship, there is a unitary decision-making centre (the purchasing centre . . . ) to which corresponds a correlative unity of imputation of the strategic choices and conduct implemented by the various members of the Group beyond their autonomous legal status".


In relation to the issue of the benefits obtained by the parent company and therefore also from the perspective of deterrence, the judgment at issue appropriately emphasised a widely consolidated principle of law – namely, that the parent company's compensatory liability exists for activities carried out by its subsidiaries if:

  • "it is proven that the unlawful conduct at issue was directly inspired by the parent company within the scope of its coordination activity";(1) or
  • the parent company "has (assumed) responsibility for marketing for having acted in close coordination between them".(2)

For further information on this topic please contact Cesare Galli at IP Law Galli by telephone (+39 02 5412 3094) or email ([email protected]). The IP Law Galli website can be accessed at


(1) See Court of Rome, 27 July 2005 and Court of Turin, 26 October 2012.

(2) See Milan Court of Appeal, 3 December 2019, Hop Mobile et al v Samsung Korea et al, rendered in a case that saw the parent company of the world's largest player in mobile telephony also answer for the parallel imports on the Italian market of infringing products sold to Italian importers by companies of its group that were not involved in the case.