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Intellectual property

Intellectual property law

Under what statutes, regulations or case law are intellectual property rights granted? Are there restrictions on how IP rights may be enforced, licensed or otherwise transferred? Do the rights exceed the minimum required by the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)?

Under Italian law, intellectual property rights (IP rights) (eg, patents, trademarks and other trade names and distinctive signs, geographical indications, know-how, design, utility models, domain names and copyright) are granted according to the following main legislation and related case law:

  • articles 2575 to 2594 of the Italian Civil Code, on intellectual property rights and industrial inventions;
  • Legislative Decree No. 30 of 10 February 2005 as modified by Legislative Decree No. 131 of 13 August 2010, setting out the Industrial Property Code;
  • Decree of the Ministry of Economic Development No. 33 of 13 January 2010, setting out the implementing regulations of the above-mentioned Industrial Property Code; and
  • Law No. 633 of 22 April 1941 protecting copyright and other related rights.

The main restrictions on how IP rights may be enforced include:

  • their duration: for example, patents have a limited duration and are not renewable (eg, 20 years from filing of the application for patents on industrial inventions; 10 years for patents on utility models); trademarks are instead indefinitely protected for renewable periods of 10 years; copyrights last for 70 years after the death of the authors, as far as economic rights are concerned (while moral rights are perpetual and non-assignable); and
  • the lack of the requirements for patentability of an invention (ie, novelty, inventive step, industrial character, lawfulness, sufficient description) or for the registration of a trademark (ie, novelty, distinctive character, lawfulness), while copyright protection is automatic with the creation of the work (although registration is advisable).

Under Italian law, IP rights can be assigned (except for the moral rights on creative works) and licensed by agreement between the parties, on an exclusive or non-exclusive basis. As further detailed in the following answers, compliance with EU and national competition rules may constitute a further limit on how IP rights may be enforced, licensed or otherwise transferred.

Responsible authorities

Which authorities are responsible for granting, administering or enforcing IP rights?

In Italy, the authorities responsible for granting, administering or enforcing IP rights are as follows:

  • the Directorate-General for the Fight against Counterfeiting - Patent and Trademark Office of the Italian Ministry of Economic Development, which is in charge of registering trademarks, designs and models, topographies of semiconductor products and patenting inventions, utility models and new plant varieties;
  • the Patent and Trademark Office is also in charge of the opposition proceedings against pending trademarks registrations (under article 174 of the Industrial Property Code);
  • the decisions of the Patent and Trademark Office, concerning rejection of an application and registration of IP rights or adopted following the above-mentioned opposition proceedings against trademarks applications, can be appealed to a special jurisdiction body called the Board of Appeals;
  • special business civil courts, which have jurisdiction on IP rights infringement actions;
  • criminal courts (eg, in the case of counterfeiting events); and
  • the Anti-counterfeiting National Council, which is an inter-ministerial body established within the Ministry of Economic Development, entrusted with planning, promoting and coordinating all the administrations dealing with the fight against counterfeiting.

Proceedings to enforce IP rights

What types of legal or administrative proceedings are available for enforcing IP rights? To the extent your jurisdiction has both legal and administrative enforcement options for IP rights, briefly describe their interrelationship, if any.

As mentioned in question 2, civil courts have jurisdiction on IP rights infringement actions. Such proceedings are governed by the Italian rules on civil procedure. The Trademark and Patent Office is in charge of the opposition proceedings against trademarks applications (under article 174 of the Industrial Property Code). The Board of Appeal decides on the appeals against the decision of the Trademark and Patent Office concerning rejection of an application and registration of IP rights or following the above-mentioned opposition proceedings against trademarks applications.

Remedies

What remedies are available to a party whose IP rights have been infringed? Do these remedies vary depending on whether one utilises judicial or administrative review or enforcement?

A party whose IP rights have been infringed may request the adoption of provisional or permanent measures such as the seizure, removal and destruction of the infringing material, prohibiting release of the product or its withdrawal from distribution or further use. It may also obtain full recovery from the damages suffered as a result of the infringement. For example, in the case of patent infringement, the judge estimates the damages considering the profits made in breach of patent rights and the amount that the infringer would have had to pay if he or she had obtained the licence from the patent holder (article 125 of the Industrial Property Code). The entitled party may also obtain a published copy of the judgment and reimbursement of the legal costs.

Nexus between competition and IP rights

Do any statutes, regulations or case law in your jurisdiction address the interplay between competition law and IP law?

There are no specific statutory provisions or regulations on the nexus between competition and IP rights. However, the interplay between competition law and IP law is regularly addressed in court cases and antitrust and merger control proceedings before the Italian Competition Authority (the Authority) and the European Commission (the Commission), as further detailed in questions 10-28.

Patent cooperation treaties and other agreements

Does your jurisdiction participate in any patent cooperation treaties or other similar agreements?

Italy is a party to all major international agreements, including the WIPO Patent Cooperation Treaty and other WIPO-administered treaties (eg, the Paris Convention for the Protection of Industrial Property of 7 July 1884, the Trademark Law Treaty of 1994 and the Berne Convention for the Protection of Literary and Artistic Works of 5 December 1887); IP-related multilateral treaties (eg, the WTO Agreement on TRIPs of 1 January 1995); and IP regional treaties (eg, the European Patent Convention of 1 December 1978). A full list of the treaties and other agreements is available at www.wipo.int/wipolex/en/profile.jsp?code=IT.

Remedies for deceptive practices

With respect to trademarks, do competition or consumer protection laws provide remedies for deceptive practices?

As further detailed in questions 26-28, if a dominant company is found to have abused its IP rights, such conduct may constitute an abuse of dominant position in breach of article 3 of Law No. 287/1990 or article 102 of the Treaty on the Functioning of the European Union (TFEU), or both. In such instances, the enforcement of competition rules may constitute a remedy available for competitors, customers or final consumers, who may file complaints to the Authority (and the Commission) or court claims.

As far as consumer protection is concerned, the Consumer Code (Legislative Decree No. 206 of 6 September 2005, as amended by Legislative Decree No. 146 of 2 August 2007, implementing Directive 2005/29/EC on unfair businesses-to-consumer commercial practices and by Legislative Decree No. 130 of 6 August 2015, implementing Directive 2013/11/EU on alternative dispute resolution for consumer disputes and amending Regulation (EC) No. 2006/2004 and Directive 2009/22/EC) prohibits sales and promotional activities creating confusion with products, trademarks, trade names or other distinguishing marks of a competitor or involving the use of false information on a trader’s ownership of industrial, commercial or IP rights. Such conducts can be investigated and fined by the Authority, acting ex officio or at the request of a third interested party.

In a relatively recent case of September 2016 (PS9315, Fly Go - Confusion with official website, decision of the Authority No. 26,173 of 14 September 2016), the Authority fined and prohibited the continuation of the company’s conduct consisting in creating confusion with services and trademarks of competitors in its online advertisements and website, therefore deceiving consumers. In July 2017, the Authority issued a second decision for non-compliance with its previous decision and fined the company an additional €550,000 (IP269, Fly Go - Confusion with official website, decision of the Authority No. 26,698 of 19 July 2017). In addition, in 2016, the Authority issued a high number of decisions prohibiting the online sale of counterfeited products by foreign professionals (eg, PS10355, Yinsi Baohu - Online sale of counterfeit products, decision of the Authority No. 25,898 of 9 March 2016 and PS10354, Geryi Wang - Online sale of counterfeit products, decision of the Authority No. 26,035 of 1 June 2016).

Technological protection measures and digital rights management

With respect to copyright protection, is WIPO protection of technological protection measures and digital rights management enforced in your jurisdiction? Do statutes, regulation or case law limit the ability of manufacturers to incorporate TPM or DRM protection limiting the platforms on which content can be played? Has TPM or DRM protection been challenged under the competition laws?

The use of TPMs and DRM was harmonised at EU-level by articles 6 and 7 of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society. Articles 6 and 7 of Directive 2001/29/EC were implemented in Italy by articles 102-quarter and quinquies of Law No. 633 of 22 April 1941 on copyright protection.

In relation to TPMs, article 102-quarter provides that rights holders may use effective technological protection measures, designed to prevent or restrict unauthorised acts. Technological measures are deemed effective where the use of a protected work or other subject matter is controlled by the rights holders through application of an access control or protection process, such as encryption, scrambling or other transformation of the work or other subject matter, or a copy-control mechanism, which achieves the protection objective.

Similarly, article 102-quinquies provides that rights holders may incorporate DRM information, aimed at identifying the protected work, its author or any other rights holders. DRM information is associated with a copy of, or appears in connection with, the communication to the public of a protected work. It may also contain indications about the terms and conditions of use of the work or other subject matter, and any numbers or codes that represent such information.

There have been no recent cases where TPM or DRM protection was challenged under the competition laws. However, similar to any other protection related to IP rights, in the event of misuse, in principle, such conduct might be investigated and prohibited if its object or effect restricts competition in the market.

Industry standards

What consideration has been given in statutes, regulation or case law to the impact of the adoption of proprietary technologies in industry standards?

According to the Commission’s Horizontal Guidelines (which are applied also by the Authority at national level), standardisation usually produces significant positive economic effects, for example by promoting economic interpenetration in the internal market and encouraging the development of new and improved products or markets and improved supply conditions. Standards thus normally increase competition and lower output and sales costs, benefiting economies as a whole. Standards may maintain and enhance quality, provide information and ensure interoperability and compatibility (thus increasing value for consumers).

According to the Horizontal Guidelines, standard-setting can, however, in specific circumstances, also give rise to restrictive effects on competition by potentially restricting price competition and limiting or controlling production, markets, innovation or technical development. For example, standardisation may lead to anticompetitive results by preventing certain companies from obtaining effective access to the results of the standard-setting process (that is to say, the specification or the essential IP rights for implementing the standard, or both). If a company is either completely prevented from obtaining access to the result of the standard, or is only granted access on prohibitive or discriminatory terms, there is a risk of an anticompetitive effect.

In these circumstances, when the standard may constitute a barrier to entry, the company holding the related essential IP rights could control the product market to which the standard relates (eg, by ‘holding up’ users after the adoption of the standard, either by refusing to license the necessary IP rights or by requesting excessive royalty fees, thereby preventing effective access to the standard). Such conduct might be found in breach of competition rules. Where access to the standard is instead provided on fair, reasonable and non-discriminatory (FRAND) terms, the agreement will normally not restrict competition.

In a relatively recent case of 29 April 2014 (AT.39939, Samsung - Enforcement of UMTS standard essential patents), the Commission accepted binding commitment from Samsung, consisting in refraining from seeking injunctions in the European Economic Area (EEA) for a period of five years on the basis of any of its standard essential patents (SEPs), on technologies implemented in smartphones and tablets against any company that agrees to a particular framework for licensing the relevant SEP.

In the recent judgment of 16 July 2015 in the Huawei v ZTE case (C-170/13), the European Court of Justice stated that companies that hold SEPs, and that are bound to grant licences on a FRAND basis, may bring actions for infringement (seeking an injunction or the recall of the product) without violating article 102 TFEU. However, to do so, they must first alert the alleged infringer, and offer to grant a licence on FRAND terms (specifying also the amount of royalties and their calculation) and wait for the response of the alleged infringer. If the alleged infringer refuses and continues to use the patent, the company can legitimately bring an action for infringement of the patent without violating article 102 TFEU. In addition, the European Court of Justice indicated that, in similar circumstances, companies are allowed to seek the rendering of accounts or an award of damages for the unlawful use of their patent.

In a recent case of 7 February 2017 (A503, Società Iniziative Editoriali/Servizi di Rassegna Stampa nella provincia di Trento, decision of the Authority No. 26,412 of 7 February 2017), the Authority found that Società Iniziative Editoriali was abusing its dominant position in the local newspaper market of the autonomous province of Trento by denying the licence for the press release services rights to downstream market operators. In its decision, the Authority granted interim measures requiring Società Iniziative Editoriali to grant operators a licence on FRAND terms.

Competition

Competition legislation

What statutes set out competition law?

The main statutory provisions setting out competition law are:

  • article 101 TFEU and articles 2 and 4 of Law No. 287/90, which prohibits anticompetitive agreements between undertakings;
  • article 102 TFEU and article 3 of Law No. 287/90, which prohibits the abuse of dominant position; and
  • Council Regulation (EC) No. 139/2004 of 20 January 2004 (the EC Merger Regulation) and articles 5 and 6 of Law No. 287/90, on the control of concentrations between undertakings.

IP rights in competition legislation

Do the competition laws make specific mention of any IP rights?

IP rights are specifically referred to in EU regulations and guidelines, which are also applicable at national level, to ensure compliance with competition law. In particular, the following:

  • Commission Regulation (EU) No. 316/2014 of 21 March 2014 on the application of article 101(3) TFEU to categories of technology transfer agreements (the Technology Transfer Regulation);
  • Commission Regulation No. 1217/2010 of 14 December 2010 on the application of article 101(3) TFEU to categories of research and development agreements (the Research and Development Regulation);
  • Commission Regulation No. 330/2010 of 20 April 2010 on the application of article 101(3) TFEU to categories of vertical agreements and concerted practices;
  • Communication from the Commission - Guidelines on the application of article 101 TFEU to technology transfer agreements (the Technology Transfer Guidelines);
  • Communication from the Commission - Guidelines on the applicability of article 101 TFEU to horizontal cooperation agreements (the Horizontal Guidelines); and
  • Commission notice - Guidelines on Vertical Restraints.

Review and investigation of competitive effects from exercise of IP rights

Which authorities may review or investigate the competitive effect of conduct related to exercise of IP rights?

The Authority is in charge of investigating and reviewing the competitive effect of conduct related to exercise of IP rights (eg, reviewing IP-related agreements or conduct of companies in a dominant position, assessing the effect on competition of notified transactions involving transfer of IP rights, protecting consumers from misleading advertising, comparative advertising that may bring discredit upon competitors’ products or cause confusion as well as unfair commercial practice among undertakings).

Under article 15 of Law No. 287/90, if the Authority finds that an infringement of competition law has occurred, it sets a deadline for the companies involved to cease and desist from the alleged infringements, and can impose fines of up to 10 per cent of the company’s turnover in the preceding business year, depending on the seriousness and duration of the alleged infringement.

In the event of failure to comply with the above-mentioned cease-and-desist order, the Authority may fine the company concerned at least twice the amount of the fine referred to above and up to 10 per cent of the company’s turnover in the preceding business year. In the event of repeated failure to comply, the Authority may suspend the company’s business for up to 30 days.

Under article 14-bis of Law No. 287/90, the Authority may adopt ex officio interim measures, prior to the finding of an infringement, when serious and irreparable harm to competition is likely to occur. A decision providing for interim measures cannot be renewed or extended. The Authority may fine companies not complying with the decision setting out the interim measures up to 3 per cent of their turnover.

Furthermore, under article 14-ter of Law No. 287/90 (introduced by Law-Decree No. 223 of 4 July 2006), the Authority can accept and make the commitments offered by the parties binding to avoid the negative effects of potentially infringing conduct under investigation, and close the proceedings without ascertaining the alleged breach of articles 2 or 3 of Law No. 287/90 (or articles 101 or 102 TFEU).

Competition-related remedies for private parties

Can a private party recover for competition-related damages caused by the exercise, licensing or transfer of IP rights?

Under article 12 of Law No. 287/90, private parties (including consumer associations) can file complaints before the Authority concerning alleged breach of competition rules (eg, in case A473, Provision of cholic acid, the Authority started, in December 2013, an investigation for alleged abuse of dominant position on the basis of a complaint filed by a purchaser against its historical supplier, closed on 15 July 2015 with commitments and no finding of infringement).

Under article 33 of Law No. 287/90, private parties can also bring actions in court for the annulment of alleged anticompetitive agreements, as well as requests for interim measures and actions for damages before the civil courts (special business courts), including damages caused by the exercise, licensing or transfer of IP rights, in breach of competition rules.

The rules governing actions brought by private parties (including consumer associations) for damages related to alleged breach of competition rules, before civil courts, are set out in Legislative Decree No. 3 of 19 January 2017, implementing Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the member states and of the European Union, which entered into force on 3 February 2017.

Competition guidelines

Have the competition authorities, or any other authority, issued guidelines or other statements regarding the overlap of competition law and IP?

As indicated in question 11, IP rights are specifically referred to in EU regulations and guidelines, which are also applicable at national level, to ensure compliance with competition law. The main guidelines regarding the overlap of competition law and IP are outlined in question 11.

Exemptions from competition law

Are there aspects or uses of IP rights that are specifically exempt from the application of competition law?

Technology transfer agreements are capable of improving economic efficiency and being pro-competitive as they can reduce the duplication of research and development, strengthen the incentive for the initial research and development, facilitate diffusion and generate product market competition.

Therefore, according to the above-mentioned Technology Transfer Regulation (which is directly applicable in Italy), such agreements can be exempted from the above-mentioned prohibition set out in article 101 TFEU and article 2 of Law No. 287/90 if they satisfy the following criteria:

  • the combined market share of the parties to the agreement does not exceed 20 per cent for the relevant product, service or technology market (or if they are not competitors, neither party has a market share of more than 30 per cent in respect of their own relevant product, service or technology market); and
  • they do not contain the following ‘hardcore restrictions’:
    • price-fixing, limitation of output, allocation of markets or customers, and restriction of the licensee’s ability to exploit its own technology or restriction of any party to carry out research and development (in the case of agreements between competing companies); or
    • price-fixing, territorial (or customer) restrictions of passive (unsolicited) sales by the licensee and restrictions of active or passive sales to end users by a licensee that is a member of a selective distribution system and operates at the retail level (in the case of agreements between non-competing companies).

Technology transfer agreements, which cannot benefit from the above automatic exemption under the Technology Transfer Regulation, are not prohibited outright and shall be individually assessed according to the principles set out in the Technology Transfer Guidelines, to determine whether they meet the conditions for an individual exemption under article 101(3) TFEU and article 4 of Law No. 287/90.

Copyright exhaustion

Does your jurisdiction have a doctrine of, or akin to, ‘copyright exhaustion’ (EU) or ‘first sale’ (US)? If so, how does that doctrine interact with competition laws?

The copyright exhaustion principle is laid down in article 17 of Law No. 633 of 22 April 1941 on copyright protection (as amended by Legislative Decree No. 68 of 9 April 2003 implementing Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society), and it is constantly reaffirmed in the case law of Italian courts. According to such doctrine, once a product is legally marketed within the EEA (ie, the European Union and Iceland, Lichtenstein and Norway), the holder of an exclusive IP right cannot use this right to further restrict the distribution of such product within the EEA, control pricing of products sold downstream or prevent ‘grey marketing’ (eg, the Court of Cassation judgment of 15 October 2014, Court of Milan judgment No. 701 of 11 December 2014 and Court of Cassation judgment No. 27,081 of 21 December 2007). Any such conduct would instead be likely to be considered in breach of competition rules.

In a recent case (C-419/13, Art & Allposters International v Stichting Pictoright) the European Court of Justice found that:

[T]he rule of exhaustion of the distribution right set out in article 4(2) of Directive 2001/29/EC does not apply in a situation where a reproduction of a protected work, after having been marketed in the European Union with the copyright holder’s consent, has undergone an alteration of its medium, such as the transfer of that reproduction from a paper poster onto a canvas, and is placed on the market again in its new form.

Import control

To what extent can an IP rights holder prevent ‘grey-market’ or unauthorised importation or distribution of its products?

As indicated in question 16, according to the exhaustion doctrine, an IP rights holder is capable of preventing grey-market or unauthorised importation or distribution of a product within the EEA (including Italy) provided that such product has not been marketed in the EEA without his or her consent. In principle, the exhaustion doctrine would not preclude an IP rights infringement action against goods imported into the EEA from a third country (eg, Court of Cassation judgment No. 21,847 of 15 October 2014, which states that the IP rights holder can control the import from non-EEA countries of a product covered by his or her IP right or patent; see also Court of Cassation judgment No. 27,081/2007; Court of Naples judgment of 30 April 2004; and Court of Turin judgment No. 1,448 of 16 January 2004). That said, a clause contained in an agreement covering distribution into a third country, preventing the sale of a product in the EEA may be considered having the effect of restricting competition within the EEA, in breach of article 101 TFEU, and would therefore need to be assessed on a case-by-case basis.

Jurisdictional interaction between competition laws and IP rights

Are there authorities with exclusive jurisdiction over IP-related or competition-related matters? For example, are there circumstances in which a competition claim might be transferred to an IP court to satisfy subject matter jurisdiction? Are there circumstances where the resolution of an IP dispute will be handled by a court of general jurisdiction?

The Authority is the only administrative entity entrusted with competition law enforcement in Italy.

As far as the judicial review of IP-related or competition-related matters is concerned, Law Decree No. 1 of 24 January 2012 (converted by Law No. 27 of 24 March 2012), renamed the former IP specialised courts into the above-mentioned business courts. It also increased their number (there were 12 IP specialised courts; there are now 21 business courts located in the following cities: Ancona, Bari, Bologna, Brescia, Cagliari, Campobasso, Catania, Catanzaro, Florence, Genoa, L’Aquila, Milan, Naples, Palermo, Perugia, Potenza, Rome, Turin, Trento, Trieste and Venice) and extended their competence to almost every litigation related to corporate law, including competition law.

Under article 18 of Legislative Decree No. 3 of 19 January 2017 (implementing Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the member states and of the European Union), the business sections of the courts of Milan, Rome and Naples are the only ones having jurisdiction in case of actions for damages regarding alleged violations of competition rules, including class actions.

Merger review

Powers of competition authority

Does the competition authority have the same authority with respect to reviewing mergers involving IP rights as it does with respect to any other merger?

There are no specific merger control thresholds for the notification of transactions involving transfer of IP rights. Therefore, general merger control rules apply, according to which transactions must be notified to the Authority, when both the following thresholds (under article 16 of Law No. 287/90, as amended by Law No. 124 of 4 August 2017, entered into force on 29 August 2017) are met (provided that the transaction does not have a Community dimension under the EU merger control rules set out in Regulation (EC) No. 139/2004 on the control of concentrations between the following undertakings):

  • the aggregate turnover in Italy of all undertakings involved above €492 million; and
  • the individual aggregate turnover in Italy of at least two of the parties of the transaction above €30 million.

In principle, the Authority’s powers with respect to reviewing mergers involving IP rights do not differ from those exercised while reviewing any other mergers. That said, as further detailed in questions 20-22, the Authority’s assessment may vary significantly when a notified transaction involves the transfer of IP rights.

Analysis of the competitive impact of a merger involving IP rights

Does the competition authority’s analysis of the competitive impact of a merger involving IP rights differ from a traditional analysis in which IP rights are not involved? If so, how?

The Authority’s analysis of the competitive impact of a transaction involving the transfer or concentration of IP rights may differ from a traditional analysis in which IP rights are not involved, insofar as the transfer or concentration of IP rights may result or contribute to the creation or strengthening of a dominant position in the market.

Challenge of a merger

In what circumstances might the competition authority challenge a merger involving the transfer or concentration of IP rights? Does this differ from the circumstances in which the competition authority might challenge a merger in which IP rights were not a focus?

The Authority may challenge transactions involving the transfer or concentration of IP rights when they may cause market distortion, impede effective competition creation or strengthen a dominant market position (eg, where the transaction would deprive remaining competitors from accessing essential IP rights, in the absence of alternative technologies).

Remedies to address the competitive effects of mergers involving IP

What remedies are available to address competitive effects generated by a merger when those effects revolve around the transfer of IP rights?

Under article 18 of Law No. 287/90, the parties may offer commitments to meet the Authority’s concerns with regard to a notified transaction. In principle, the Authority can require either structural or behavioural remedies to resolve potential competition issues raised by a notified transaction. In the Authority’s past experience, structural remedies appear to be preferable to behavioural ones, as they allow the potential competition issues to be resolved from the outset and require more limited monitoring activities.

Commitments available to address potential competition issues related to the transfer or concentration of IP rights include the mandatory licensing of IP rights or their divestment.

In case C6941 - Koninklijke Numico v Mellin of 15 June 2005 - the Authority found that, inter alia, the divestment of Nutricia’s milk-branded products was an adequate means to reduce Numico’s presence and resolve the potential issues raised by the transaction. In case C1179 - Bolton Alimentari v Simmenthal of 2012 - Bolton committed instead to divest the Manzotin business, which included the Manzotin brand and related business information. In case C12023 - Arnoldo Mondadori Editore v RCS Libri of 23 March 2016 - Arnoldo Mondadori Editore offered to divest its publishers Marsilio and Bompiani to allow the entry into the market of a new player. In addition, Arnoldo Mondadori Editore waived the rights of option and preferential rights regarding future narrative and non-fiction works contained in the authors’ contracts.

Specific competition law violations

Conspiracy

Can the exercise, licensing or transfer of IP rights create price-fixing or conspiracy liability?

Licensing or assignment of IP rights may be found in breach of article 2 of Law No. 287/90 or article 101(1) TFEU, if its object or effect is the prevention, restriction or distortion of competition, including the following:

  • directly or indirectly fixing purchase or selling prices or other contractual conditions;
  • limiting or restricting production, market outlets or market access, investment, technical development or technological progress;
  • sharing markets or sources of supply;
  • applying to other trading partners objectively dissimilar conditions for equivalent transactions, thereby placing them at an unjustifiable competitive disadvantage; or
  • making the conclusion of agreements subject to acceptance by the other parties of supplementary obligations that, by their nature or according to commercial usage, have no connection with the subject of such agreements.

Under article 101(3) TFEU and article 4 of Law No. 287/90, the Authority may authorise, for a limited period of time, potential restricting agreements provided that they have the effect of improving the conditions of supply in the market, leading to substantial benefits for consumers. Such improvements shall be related, in particular, to increases of production, improvements in the quality of production or distribution, or to technical and technological progress. The exemption may not permit restrictions that are not strictly necessary or that can eliminate competition in a substantial part of the market. In any case, the benefits to consumers must outweigh the negative consequences that the agreement could produce.

Since the entry into force of Regulation (EC) No. 1/2003 on 1 May 2004, companies cannot file voluntary notifications of agreements any more with a view to obtaining a negative clearance or an individual exemption decision of the Authority (although article 13 of Law No. 287/90, which provides such possibility, has not been formally repealed). Therefore, companies shall assess on their own, with the support of specialised legal counsels, the compatibility of their agreements with competition rules.

For example, in the recent Roche-Novartis case, the Authority found that licensing of IP rights was one of the means used by the parties to reach an alleged collusive agreement aimed at manipulating the sales of two drugs for treating eye illnesses (case I760, Roche-Novartis v Farmaci Avastin and Lucentis).

The Authority closed its investigation against Roche and Novartis on 27 February 2014 and imposed fines totalling €182.5 million (€90.5 million for Roche and €92 million for Novartis). According to the Authority, the two companies had been involved in an alleged anticompetitive agreement since 2011 aimed at excluding the use of Avastin in Italy, marketed by Roche for the treatment of certain diseases, to favour the sales of the competing product (Lucentis), marketed by Novartis. Both Avastin and Lucentis were developed by Genentech (a US subsidiary of Roche) and licensed respectively to Roche and Novartis for commercialisation outside the United States. Therefore, according to the Authority, Roche had indirectly taken advantage (in terms of licence royalties) of the sale of Lucentis by Novartis. The Authority apparently found evidence of a campaign of misinformation to influence the prescriptions of doctors and the National Health Service. The Authority estimates that the alleged collusion had resulted in an overall cost increase for the National Health Service in 2012 of over €45 million, which, according to the Authority, justified the high fines imposed on the parties. On 2 December 2014, the Administrative Court of Appeal in Rome dismissed the Roche and Novartis appeals and confirmed the fining decision of the Authority. On 11 March 2016 the Council of State, by order No. 966, made a request for a preliminary ruling to the European Court of Justice (case C-179/16) in the appeal proceedings against the first instance judgment. The Council of State referred a number of questions to the European Court of Justice, such as on the application of article 101 TFEU to licensing agreements where the licensee is only active in the relevant market because of the licensing agreement itself and, in such instance, to what extent the licensee can be qualified as a competitor of the licensor under article 101 TFEU. Other questions relate to the criteria for the market definition and, in particular, the relevance of marketing authorisations or off-label use of pharmaceutical products. The Council of State will stay the proceedings and wait for the judgment of the European Court of Justice before reaching its final decision on the appeal.

Reverse payment patent settlements

How have the competition laws been applied to reverse payment patent settlements in your jurisdiction?

Patent pool, copyright collectives, standard-setting and other forms of technology sharing may produce significant positive effects and encourage the development of new and improved products. However, in certain circumstances they might facilitate collusion, restricting price competition or limiting production and the level of innovation and technologies and favour market foreclosure. The likelihood that efficiency-enhancing and pro-competitive effects will outweigh any anticompetitive effects related to the restrictions contained in such agreements needs to be assessed on a case-by-case basis, as it depends on the degree of market power of the undertakings concerned and the overall features of the market and the relevant technologies being licensed.

With regard to patent pools, the Technology Transfer Guidelines (which are also applied by the Authority at national level) specifically distinguish between complementary technologies (ie, technologies needed for the production of a product) and substitute technologies (ie, when either technology enables the downstream manufacturer to produce the product or carry out the process to which the technologies relate). Patent pools composed of purely substitute technologies are more likely to harm competition and social welfare than are pools of complementary technologies. A further distinction is made between essential and non-essential technologies. Patent pools that are only composed of essential technologies are always pro-competitive and are unlikely to fall within the prohibition of article 101 TFEU or article 2 of Law No. 287/90. By contrast, in the case of complementary non-essential patents, there is a higher risk that the agreement might give rise to collective bundling in breach of article 101 TFEU or article 2 of Law No. 287/90.

The Horizontal Guidelines of the Commission (which are also applied by the Authority at national level) provide detailed guidance on the assessment of standardisation agreements, as further detailed in question 9.

There are no recent past decisions of the Authority concerning patent settlements. However, the indications provided by the Commission in its 2009 sector enquiry on the status of competition in the pharmaceutical sector (Final Report of 8 July 2009 on pharmaceutical sector inquiry pursuant to article 17 of Regulation (EC) No. 1/2003) on the likely competition issues raised by patent disputes, are likely to apply also to the Italian market.

For example, according to the Commission, patent settlement agreements (with particular regard to the pharmaceutical sector) may prove to be problematic from an antitrust perspective, when they lead to a delay of generic entry in return for a payment by the originator company to the generic company. Other examples of potentially problematic agreements relate to settlements that contain restrictions beyond the exclusionary zone of the patent (meaning that they would reach beyond its geographic scope, its period of protection or its exclusionary scope). Also, agreements raising potential antitrust concerns include settlements where the patent holder knows that its patent does not meet the patentability criteria.

In the recent Lundbeck v Commission case of 8 September 2016 (cases T-472/13, T-460/13, T-467/13, T-469/13, T-470/13 and T-471/13), the General Court upheld the Commission decision of 19 June 2013, whereby it found that the Danish pharmaceutical company Lundbeck and four generics competitors had concluded agreements that harmed patients and healthcare systems in breach of article 101 TFEU, and imposed a fine of €93.8 million on Lundbeck and fines totalling €52.2 million on the four generics competitors (Generics UK, Arrow, Alpharma and Ranbaxy), alleging that Lundbeck paid the generics competitors for their promise to stay out of the citalopram market. The General Court found that not all patent settlements are able to raise competition concerns; however, those that contain disproportionate reverse payments combined with the partial or total exclusion of competitors from the market could raise issues. Lundbeck and the four generics competitors have appealed the judgment before the European Court of Justice (cases C-591/16, C-586/16, C-601/16, C-588/16, C-614/16 and C-611/16).

(Resale) price maintenance

Can the exercise, licensing or transfer of IP rights create liability under (resale) price maintenance statutes or case law?

The analysis regarding resale price maintenance does not differ from situations that do not involve the exercise of IP rights. Any attempt by the licensor to establish a fixed or a minimum price to be observed by the licensee, in the resale of the licensed products to third parties, is considered a hardcore restriction, capable of creating liability under resale price maintenance statutes.

Exclusive dealing, tying and leveraging

Can the exercise, licensing or transfer of IP rights create liability under statutes or case law relating to exclusive dealing, tying and leveraging?

If a dominant company uses its IP rights to foreclose competing products or technologies (eg, by means of exclusive dealing, tying or leveraging), such conduct would be likely to be considered in breach of article 102 TFEU and article 3 of Law No. 287/90, on the abuse of dominant position.

If the company holding the IP rights is not in a dominant position, exclusive dealing, tying and similar clauses can be automatically exempted if the agreement where they are incorporated meets the requirements set out in the Technology Transfer Regulation; otherwise they shall be individually assessed according to the principles set out in the Technology Transfer Guidelines, as further detailed in question 15.

Abuse of dominance

Can the exercise, licensing or transfer of IP rights create liability under statutes or case law relating to monopolisation or abuse of dominance?

Whether a company might be considered in a dominant position simply on account of the IP rights that it holds would depend on the overall competitive structure and features of the market and whether such IP rights allow the alleged dominant company to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers (eg, if there are no actual or potential substitutes in the market). In such instances, the conduct of the dominant company in respect of its IP rights may constitute an abuse of dominant position in breach of article 102 TFEU and article 3 of Law No. 287/90.

For example, in case A431 - Ratiopharm v Pfizer of 11 January 2012 - the Authority found that Pfizer was in a dominant position owing to the lack of proprietary or non-proprietary substitutes in the market for its product, and therefore, its refusal to license constituted an abuse of a dominant position.

Unjustified patent enforcement by a dominant company may also be considered in breach of competition rules if it is aimed at excluding potential competitors or restricting competition. In said case, the Authority found that Pfizer had abused its dominant position, inter alia, by threatening and initiating legal actions before civil and administrative courts, to prevent or delay the entry into the market of the drugs manufactured by Ratiopharm and other generics producers.

In a recent case (A508, SIAE - Intermediation Services of 5 April 2017), the Authority started an investigation against the Italian Association of Authors and Publishers (SIAE) for alleged abuse of dominant position. According to the Authority, the SIAE would have put in place exclusionary conducts aimed at preventing new operators from entering the copyright management market. In particular, the SIAE would have exerted pressure on its members (authors and co-authors) to dissuade them from concluding deals with other collecting societies. The Authority highlighted that the investigation is also aimed at clarifying whether the sectoral legislation (article 180 of Law No. 633 of 22 April 1941) is in compliance with the provisions of European law on competition and freedom of establishment and freedom to provide services.

Refusal to deal and essential facilities

Can the exercise, licensing or transfer of IP rights create liability under statutes or case law relating to refusal to deal and refusal to grant access to essential facilities?

The refusal to license IP rights or technology by a company holding a dominant position may create liability under statutes or case law relating to refusal to deal and refusal to grant access to essential facilities, in particular if:

  • the refusal is not justified by objective considerations;
  • the IP right or the relevant technology is necessary to exercise an activity on the downstream market;
  • such IP right or relevant technology is impossible to reproduce under reasonable conditions; and
  • access is technically feasible.

In case A415 - Sapec Agro v Bayer Helm of 5 July 2011 - the Authority imposed a fine of €5.1 million on Bayer Cropscience Srl and Bayer Cropscience AG (Bayer) for abuse of dominant position in breach of article 102 TFEU, in the market for the production and commercialisation of fosetyl-based fungicides. In particular, Bayer had refused to provide Sapec Agro SA and other companies access to certain studies in its possession, which were considered necessary to obtain the market authorisation of fosetyl-based products. On 16 May 2012, the decision of the Authority was annulled by the Regional Administrative Court in Rome (TAR Lazio), stating that Bayer’s studies could not be considered an essential facility, given that (at least until 2007) they would have been accessible to the companies requesting market authorisation. On 29 January 2013, the Council of State overturned the first instance decision and confirmed the previous finding by the Authority (Council of State, judgment No. 548 of 28 January 2013).

On 4 June 2013, the Court of Milan decided on a dispute concerning the screen scraping of the Ryanair website by online travel agencies (Ryanair Ltd v Viaggiare Srl, judgment No. 7,825 of 4 June 2013 and Ryanair Ltd v Lastminute Srl, judgment No. 7,808 of 4 June 2013). The court found that:

  • screen scraping Ryanair’s website to provide consumers with relevant information on flights (eg, place of departure and arrival, time, date, price) is not eligible for database copyright protection under the Italian Copyright Law (Law No. 633/1941); and
  • Ryanair’s refusal to deal with the online travel agencies constituted an abuse of dominant position because it prevented the development of the downstream market.

Therefore, regardless of the availability of copyright protection means against screen scraping (as in other jurisdictions in the EU, the question was subject to a preliminary ruling by the European Court of Justice), the judgment of the Milan court found that the refusal by Ryanair to grant access to its database constituted an abuse of dominant position.

In case A-415, NUOVO IMAIE - Anticompetitive Conducts of 22 March 2017, the Authority found that NUOVO IMAIE (an operator, former legal monopolist, active in the management and intermediation of rights related to copyright) had abused of its dominant position through exclusionary conducts, including refusal of access to its general archive of authors’ and performers’ works. NUOVO IMAIE submitted commitments, the Authority accepted them and closed the case on 22 March 2017 with no finding of infringement.

Remedies

Remedies for violations of competition law involving IP

What sanctions or remedies can the competition authorities or courts impose for violations of competition law involving IP?

Under article 15 of Law No. 287/90, if the Authority finds that an infringement of competition law has occurred, it sets a deadline for the companies involved to cease and desist from the alleged infringements, and can impose fines of up to 10 per cent of the company’s worldwide turnover in the preceding business year, depending on the seriousness and duration of the alleged infringement.

In the case of failure to comply with the above-mentioned cease-and-desist order, the Authority may fine the company concerned at least twice the amount of the fine referred to above and up to 10 per cent of the company’s worldwide turnover in the preceding business year. In the event of repeated failure to comply, the Authority may suspend the company’s business for up to 30 days.

Under article 14-bis of Law No. 287/90, the Authority may adopt ex officio interim measures, prior to the finding of an infringement, when a serious and irreparable harm to competition is likely to occur. A decision providing for interim measures cannot be renewed or extended. The Authority may fine companies up to 3 per cent of their worldwide turnover if they do not comply with the decision setting out the interim measures.

Furthermore, under article 14-ter of Law No. 287/90 (introduced by Law-Decree No. 223 of 4 July 2006), the Authority can accept and make the commitments offered by the parties binding to avoid the negative effects of potentially infringing conduct under investigation, and close the proceedings without ascertaining the alleged breach of articles 2 or 3 of Law No. 287/90 (or articles 101 or 102 TFEU).

Finally, as indicated in question 13, under article 33 of Law No. 287/90, private parties can bring actions in court for the annulment of alleged anticompetitive agreements, as well as request for interim measures and actions for damages before the civil courts (special business courts), including damages caused by the exercise, licensing or transfer of IP rights, in breach of competition rules.

Competition law remedies specific to IP

Do special remedies exist under your competition laws that are specific to IP matters?

There are no special competition law remedies that are specific to IP matters.

Scrutiny of settlement agreements

How would a settlement agreement terminating an IP infringement dispute be scrutinised from a competition perspective? What are the key factors informing such an analysis?

Settlement agreements terminating an IP infringement dispute may fall within article 101 TFEU and article 2 of Law No. 287/90, which prohibits anticompetitive agreements.

According to the Commission’s Technology Transfer Guidelines, a no-challenge clause, contained in patent settlement agreements or non-assertion agreements, does not constitute in itself a restriction of competition, given that it is inherent to such settlement agreements. Such no-challenge clause would, therefore, be unlikely to fall within the scope of application of article 101 TFEU and article 2 of Law No. 287/90.

However, the Technology Transfer Guidelines also state that such clauses may fall within the above prohibition provided by article 101 TFEU (and article 2 of Law No. 287/90) if they cannot be considered inherent to the settlement but rather the result of the licensor’s offering financial incentives to the licensee not to challenge the validity of the IP rights (eg, ‘pay for delay’ agreements related to generic entry).

Therefore, the circumstances under which the parties agree such no-challenge clauses would need to be assessed on a case-by-case basis, taking into account the overall market context.

Further information on competition law issues related to patent settlements is provided in question 24.

Economics and application of competition law

Economics

What role has competition economics played in the application of competition law in cases involving IP rights?

As for most areas of competition law, economics also plays a fundamental role in cases involving IP rights. The definition of the relevant market, for the purpose of the assessment of agreements or transactions involving IP rights, is often based on the economic analysis of the demand-side and the supply-side substitutability, as well as the existence of potential barriers to enter the market. Competition economics also plays an important role in the assessment of the potential effects on competition, for example, any extra profits gained by the rights holder in the case of exclusive licensing, with regard to consumer pricing of the products embodying the IP right being licensed.

Recent cases and sanctions

Recent cases

Have there been any recent high-profile cases dealing with the intersection of competition law and IP rights?

The most recent high-profile case, where the Authority dealt with the intersection of competition law and IP rights, is Roche-Novartis v Farmaci Avastin and Lucentis (see question 23).

Another recent high-profile case is Ratiopharm v Pfizer of 11 January 2012 (case A431). In this case, the Authority fined Pfizer for having delayed the entry of competitors’ generic drugs to the market after patent coverage expiry by deliberately misusing patent application procedures, with the ultimate objective of frustrating or delaying the market entry of manufacturers of generic drugs. On 12 February 2014, the Italian Council of State confirmed the Authority’s decision following its annulment by the TAR Lazio.

Remedies and sanctions

What competition remedies or sanctions have been imposed in the IP context?

In the Roche-Novartis v Farmaci Avastin and Lucentis case, the Authority imposed fines totalling €182.5 million (€90.5 million for Roche and €92 million for Novartis).

In the Ratiopharm v Pfizer case, the Authority, considering the severity and duration of the infringements, imposed a fine of €10.7 million. In addition, the Authority required Pfizer to refrain from engaging in similar conduct in the future.