The reform of the Italian Intellectual Property Code (IPC), which entered in force on 2 September 2010, brought a substantial amendment to the transitional regime of Article 239 IPC which allowed Italian companies to lawfully manufacture industrial design products protected by copyright of third parties.

In the last ten years, Article 239 IPC was amended several times on the ground that it was (allegedly) non-compliant with the EU Directive no. 98/71 on the legal protection of designs (Design Directive) which allows a cumulative protection of industrial design products under design and copyright law.

In its first version, Article 239 IPC had provided that industrial design products manufactured and sold before 19 April 2001 were not protected under copyright law for a 10-year period if they reproduced designs which were not (or not anymore) protected under design law. Only after the expiry of this grace period, design owners could claim copyright infringement.

In 2005, EU Commission brought an infraction procedure against Italy, claiming that the introduction of the grace period was inconsistent with the Design Directive.

In 2007, the Italian Government revised the provision and deleted any reference to the 10-year grace period. It transformed the transitional regime in an exemption which was now based on the prior use of the design protected by copyright. The manufacturers of products sold before 19 April 2001, which incorporated a design not protected by copyright at that time, were entitled to continue this production without any time limit.

The amended provision was again widely criticized by design owners who claimed a limitation of their rights on old and prestigious designs which could enjoy copyright protection.

This issue was brought before the Court of Milan in proceedings initiated by the Italian company Flos S.p.A. (Flos), who produce and sell the famous "Arco" lamp designed by the Castiglioni brothers, against Semeraro who manufactured and sold a copy of the lamp whose design has fallen in public domain. In the preliminary decision, the court confirmed that the "Arco" lamp was protected by copyright and ordered the seizure of the lamps manufactured by Semeraro. Apparently, the court did not apply Article 239 of the IPC as it had some doubts on its consistency with EU legislation. In the main proceedings, the Court of Milan decided to refer the question of the compliance of Article 239 IPC with the Design Directive to the Court of Justice of the European Union (CJEU) for a preliminary ruling.

In the proceeding before the CJEU, the General Advocate gave its opinion that Article 239 IPC was inconsistent with the EU Directive. The General Advocate clarified that: (i) products which reproduced a design fallen in the public domain before April 2001 could be protected by copyright law and (ii) companies which had legitimately sold copies of such products during the transitional regime should be granted a reasonable grace period (the General Advocate considered five years) to sell out the relevant items.

Following the General Advocate's opinion, the Italian legislator again amended Article 239 IPC which now provides that design owners cannot claim copyright infringement by third parties who manufactured and sold, during the twelve months prior to 19 April 2001, products in compliance with public domain design (even if they continued with such activity after this date) if such products were manufactured and sold either before or within five years after 19 April 2001.

Every production of copies of industrial design products protected by copyright and manufactured after 19 April 2006 (or imported after 19 April 2001) amounts to an infringement.

The newly amended provision might cause concerns for the companies in this sector and create uncertainties in the market. Some industrial design manufacturers might face compensation claims for damages caused by the marketing of copies of industrial design products protected by copyright from 21 April 2006 until today. It should be borne in mind, however, that these manufacturers operated in compliance with the law at that time and, thus, in good faith. Therefore, it would actually be difficult for design owners who claim copyright infringement to prove faulty and intentional infringement.

In conclusion, it is positive that the reform of the IPC solved the controversial issue and finally adapted Italian law to EU legislation. However, it is regrettable that the retroactive effect of the provision which changes lawful activities during the last four years into unlawful activities could not be decided by the CJEU.