Italian Supreme Court, Decision of 5 April 2012, No. 5497, Fidia v. Chemi

The Italian Supreme Court ruled that the existence and extent of a prior use right are to be determined by the specific factual circumstances of the use of the invention in the year prior to the patent priority date.

The Italian Supreme Court set forth basic principles and limits to the protection of prior use under Article 68 (3) of the Codice Della Proprietà Industriale (CPI) which states that "a person who, in the course of the last 12 months prior to the filing date of the patent application or to the priority date, has used in its business the invention, is entitled to continue such use within the limits of its prior use. Such right can only be transferred together with the business where the invention is used. The prior user bears the burden of proof of the prior use and of its extension."

According to the Italian Supreme Court, Article 68 (3) CPI aims at reconciling the exclusive right of the patent owner and the limited rights of the person who made "bona fide" use of the invention prior to the patent application. Such use was lawfully commenced and to that extent should lawfully continue, within the limits of its prior use. The existence and the limits of the prior use right were to be determined by the factual circumstances under which the use was carried out during the year prior to the filing of the application (or to the priority date). The court observed that "use in the business" in Article 68 (3) CPI aimed at not to deprive a person who had used a new and inventive solution in his business without protecting it by means of a patent. As a consequence, the right of the prior-user was limited by the circumstances under which the use was made – either geographically, e.g. limited to the plant where the process was carried out, or with regard to the quantities manufactured in the relevant period.

By contrast, a valid prior use right was not established if the use was public, since this was irreconcilable with the existence of a third party's valid patent, or if it was unlawful as consequence of a third party's invention misappropriation.

In the case at issue, the claimant alleged the infringement of two patents covering a process for manufacturing phosphatidylserine: one patent covering the preparation of the compound and the other covering its purification. While the patent covering the preparation of the compound was filed on 28 April 1999, the patent for the purification process was filed a couple of years later.

As the defendant had allegedly used both patents for manufacturing phosphatidylserine, the main question was which patent had to be considered as relevant.

The Supreme Court said that the relevant pre-use had to be calculated on the basis of the annual quantities of phosphatidylserine, prepared before the filing date of the first patent. As a consequence, the large amount of products manufactured in the year prior to the filing of the second patent was held to be infringing and therefore subject to compensation for damages.

The decision is also interesting with regard to the large damages awarded to the claimant as a compensation, assessed in the amount of € 6,876,288.68.

The decision confirms the current trend of Italian courts of a more effective enforcement of intellectual property rights following the implementation of the Directive 2004/48/EC.