Cesare Galli June 27 2022 Revision of Italian IP code: university patents return to universities and digitisation continues IP Law Galli | Intellectual Property - Italy Cesare Galli Intellectual Property IntroductionDigitalisation and simplificationUniversity patentsOfficially recognised expositionsCompulsory licensingCommentIntroductionThe Italian Council of Ministers has approved a draft law to amend several provisions of the Industrial Property Code (CPI). The text is expected to be heard by Parliament shortly, where it could be approved in the Commission in deliberative session without the need for passages in the plenum of the Houses (which could postpone it to the next legislative session).Some significant potential novelties concerning the administrative simplification and digitisation of procedures have to be pointed out. Even more significant – albeit in need of improvement – is the restitution to universities (both public and private) and other public research organisations of patrimonial rights to inventions made by their employees.Much less impactful, however, is the rule on provisional protection for designs exhibited at "official or officially recognised" international trade fairs, which reinstates a rule deleted by the 2010 reform, and the correlative abolition of the ban on seizures at these fairs.Also missing is an intervention that would bring back to systematic consistence – and, before that, make it concretely applicable – the compulsory licence in the event of a national health emergency, introduced in 2021 under the pressure of the (unfounded) controversy against the patent system that developed after the launch of vaccines against covid-19 (which, precisely thanks to the patent system and the incentives for companies that it creates, came about in record time).Digitalisation and simplificationParticularly relevant from the point of view of digitalisation are:the abolition of the obligation to submit paper documents in support of applications submitted to the Italian Patent and Trademark Office (article 10);the extension of the possibility to access and use the electronic filing system at the Italian Patent and Trademark Office, which will be allowed only on the condition that the digital identity of the user is verified (also article 10); andthe extension of the use of digital services available from foreign bodies (article 11).Other simplification rules are also welcome, such as:making the transcription of acts relating to the Italian branch of a European patent that have already been transcribed at the European Patent Office optional (article 9); orstreamlining the procedure for granting patents for new plant varieties (article 12).University patentsAlso extremely important is the "counter-reform" of the regulation of inventions by employees of universities and public research institutions, with the granting to these institutions of the right to patent in their name these inventions. This right had been taken away from them in 2001 by Law No. 383 of 18 October 2001 (the so-called "Tremonti-bis", or "100-days law" of the second Berlusconi government). This law had introduced an article 24 bis in the Patent Law in force at that time, according to which the right to patent inventions made by employees of universities and public research bodies was always granted to the employees themselves, even when the inventive activity was part of their contractual duties, rather than to the body to which they belonged, to which only a percentage share of the income from the exploitation of the inventions themselves went.This rule, which was also very poorly formulated from a technical point of view, was criticised by legal experts, universities and research institutes, from which it subtracted income that could have financed their institutional activities – namely, research (in Italy there is almost no adequate public funding). It was also criticised by business circles, because of the negative effects the rule could have on the recourse to public research by private parties. In 2009, the Italian Parliament granted the government the authority to return ownership of these patents to the universities, and the Commission of Experts charged with drafting the legislative decree proposed the adoption of such a rule. However, the Council of Ministers that approved Legislative Decree No. 131 of 13 August 2010 removed this rule from the text of the decree.The text of the new article 65 of the CPI that had been prepared by the Commission of Experts in 2010 would have dictated a regulation of researchers' inventions that was homogeneous with the general regulation provided for in article 64 of the CPI for all other employee-inventors, with the only peculiarities justified by their belonging to public research institutions. Instead, the one proposed today differs from the general one in many respects, which have no justification and are therefore unconstitutional, the differences being completely irrational.This is particularly so because:the new draft rule would give universities and other public research institutions the right to patent all inventions made by their employees, including those they have achieved outside the employment relationship and for which the general rule dictated by article 64 of the CPI reserves to the employer only an option to acquire for consideration ownership (or a licence over them) and only if the invention falls within its field of activity; andunder this draft rule researcher-inventors would be awarded "in any case . . . remuneration of not less than 50 percent of the income from the economic exploitation of the invention", while all other employee-inventors can only be entitled to a "fair premium" (largely less than 50%) and, more importantly, are only entitled to it if the inventive activity did not form the subject of their employment relationship and was therefore not remunerated for that purpose.Officially recognised expositionsAnother novelty contained in the bill is a draft rule that was provided for in the old article 34(5) of the CPI, which was abolished in 2010, and is inspired by article 11 of the Paris Convention for the Protection of Industrial Property 1883. It would, however, have a very limited impact: "official or officially recognised international expositions" are in fact only those recognised as such by the Bureau International des Expositions, in accordance with the provisions of the Paris Convention on International Exhibitions of 22 November 1928, namely – based on the current text of that convention, which has been amended several times:universal expositions (considered "official"), lasting up to six months and taking place every five years (such as the Milan 2015 Expo); andthose held between two universal expositions, on specific themes and lasting no longer than three months (considered "officially recognised"). A list of such officially recognised expositions can be found here.Compulsory licensingFinally, it remains to talk about a rule that is not in this draft law, but which it is hoped will find a place in the law that will be passed by Parliament. In 2021, Law No. 108 of 29 July 2021, converting Law-Decree No. 77 of 31 May 2021, introduced article 70 bis to the CPI. This article provided for a new case of compulsory licensing into the Italian legal system, relating to drugs and medical devices that are "deemed essential". Such a licence can be granted by the Ministry of Health (instead of the Ministry of Economic Development, as is the case for other compulsory licences) only following a "declaration of a state of national health emergency" and effective only for the "emergency period" and, if it is deemed appropriate in the single case, for up to 12 months after its expiration.Article 31 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement), which provides the minimum standard of IP rights protection mandatory for WTO member countries, allows member states to provide, in general terms, for the grant of a compulsory licence also "in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use". The rule introduced in Italy by Law-Decree No. 77/2021 fits precisely within this exception. However, it has a much more limited scope than allowed by the TRIPS Agreement and, more importantly, a wording that is in several ways inadequate, since:it only covers the hypothesis in which a "state of national health emergency" has been declared and there is a shortage of "specific medicines or medical devices deemed essential" (a hypothesis in which article 2045 of the Civil Code could already operate effectively in the Italian legal system – for further details, see "Patent infringement to deal with COVID-19 emergency: possible exemptions"); andit provides that even for this "special" compulsory licence, the applicant must prove in advance that it has "previously approached the patent holder and has not been able to obtain from the latter a contractual license on fair terms" (article 72(1) of the CPI, which now also refers to article 70 bis), which inevitably slows down its possible grant. This is, however, unnecessary, since the aforementioned article 31 of the TRIPS Agreement expressly allows that "[t]his requirement may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency", prescribing only that in such a case "the right holder shall, nevertheless, be notified as soon as reasonably practicable".CommentIt is to be hoped that the Italian Parliament will act on this draft law to remedy these technical errors, thus continuing on the path of excellence that has always characterised the process of law making in Italy in the IP field.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.