Cesare Galli August 5 2019 New regulations on brands that evoke Italy or are linked to Italian territory IP Law Galli | Intellectual Property - Italy Cesare Galli Intellectual Property Distinctive signsHistorical trademarksDistinctive signsThe so-called 'Growth Decree' (Decree-Law 34 of 30 April 2019, as approved by Parliament, with amendments, as Law 58 of 28 June 2019) has made provision for IP rights, in particular by introducing new regulations concerning 'Italian-sounding terms' – that is, relating to the adoption by foreign manufacturers of distinctive signs that evoke Italy and, more generally, of trademarks linked to Italian territory.Such acts are now included among acts of piracy (which allows, among other things, rights holders to obtain orders to reveal the banking, financial and commercial information of infringers) and are considered substantially equal to counterfeiting, so that the National Anti-counterfeiting Council is now called the National Council for the fight against counterfeiting and Italian-sounding terms.Funds are also provided for "national consortia operating on foreign markets in order to ensure the protection of the authenticity of Italian products", to contribute to the costs incurred for the "legal protection of products affected by Italian-sounding terms" and for "information and communication campaigns aimed at allowing the immediate identification of the Italian origin of a product when compared to other products".The Patent and Trademark Office is also expected to reject the registration of trademarks that "prejudice Italy's image or reputation" and must obtain the previous authorisation of the competent authority to register "signs relating to the police and the armed forces, or the names of states and Italian territorial public entities". Under Italian law, the authorisation of the armed forces and of foreign states was already required to apply for trademarks pertaining to the same. As far as the names of local authorities are concerned, it is reasonable to assume that the provision should be interpreted as referring to only the full name of such entities (eg, Comune di Firenze and Regione Lombardia) and not to the corresponding place names (ie, Firenze and Lombardia), which have always been considered to be freely registrable when they have no connection with the characteristics of the goods or services for which registration is sought.Historical trademarksA new trademark category ('historical trademarks') has been created, defined (somewhat vaguely) as trademarks registered or used for at least 50 years "for the marketing of products or services made by an Italian manufacturing company of excellence historically connected to the Italian territory". Trademark owners intending to "close the original or main production site" for the "termination of the activity or for the delocalisation of the same outside the national territory" must notify the Ministry of Economic Development of their intentions, under penalty of administrative fines (from €5,000 to €50,000). The ministry then "starts the procedure" to issue shares in the capital of the company that owns or licenses the historical trademark – that is, to nationalise it. This raises issues concerning the constitutionality of the provision and its compliance with EU law.This measure (for which €30 million is allocated each year) seems to overlook the fact that the problem of avoiding the separation of brands relating to a local tradition and the company assets in which this tradition is represented already has a perfectly appropriate answer in the current legislation. Article 23(4) of the Industrial Property Code (Legislative Decree 30/2005) provides that "[i]n any case, the transfer and licensing of the trademark must not mislead the public with regard to those features of the products or services that are essential to the public's perception". Moreover, even outside the context of a transfer, Article 14(2)(b) provides for the lapse of a trademark which:has become capable of misleading the public, in particular with regard to the nature, quality or origin of the goods or services, due to the manner and context in which it is used by the owner or with its approval, for the goods or services for which it is registered.Italian scholars have pointed out that it is not only the misleading aspect of the "physical" features of the products that are sanctioned, but "all the elements of the trademark's message, not just the strictly material ones". Indeed, in today's economy:there are... also 'immaterial' aspects… that have a significant importance for customers… the fact that trademarks are now protected also against the non-confusing use of signs that are identical or similar to them, when such use may damage, or take unfair advantage of, the reputation or distinctiveness of the trademark, implies... the provision of particularly extensive and meaningful protection against misleading signs, in order to balance the interests of the different parties involved – owners, competitors and customers - and to ensure that trademark rules are coordinated with those concerning other aspects of business communication, such as advertising, and the manufacturer's own liability for faulty products.(1)In a landmark case, the Court of Milan forbade, on the basis of this provision, the use of the trademark MASSIMO PIOMBO – the name of a well-known stylist – by the party to which the mark had been assigned following the bankruptcy of the stylist's company, because the assignee had failed to disclose to the market that the stylist no longer had a role in the design of the garments for which the trademark was used. The judges considered that such use would be misleading. The provision was interpreted in a different way in another case, but the decision of the Supreme Court in this regard is still awaited.Further, an action to obtain penalties for the deceptive use of a trademark (ie, lapse or injunction against its use) can be filed with the competent company and IP specialised division by any interested party; this includes employees' unions and public entities. The risk of such actions may prevent the separation of an 'historical trademark' from the assets to which it is linked, therefore contributing to preserving its connection with the local area, without needing to introduce new provisions of questionable legitimacy.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 www.iplawgalli.it.Endnotes(1) See Galli, "The non-deceptiveness status of the trademark: the actual relevance and prospects of a legal concept", in Studi in memoria di P Frassi, Milan, 2010; see also Riva, "Comment on Article 14 of the Industrial Property Code", in Galli-Gambino, Commented Code of Industrial and Intellectual Property, Turin, 2011.An earlier version of this article first appeared in World Trademark Review. For further information please visit www.worldtrademarkreview.com.