The year 2012 has proved to be quite lively in terms of IP litigation in Italy over the issue of the scope for copyright protection of industrial designs. The IP specialized court of Milan has unsurprisingly occupied the centre of the arena, as the city is renown as one the world capitals of industrial design: between June and September last year, the IP court of Milan has delivered a string of five rulings over as many cases of alleged plagiarism of design pieces (decisions of 5 June, 20 July, 24 July, 2 August, 13 September 2012).

The centerpiece of controversy in each case has been the conditions under which Italian Law (art. 2, paragraph 10, Law no. 633/1941 – “ICL”) allows access to full copyright protection – as opposed to registered design protection afforded under art. 31 of the Italian Intellectual Property Code (Legislative Decree no. 30/2005 – “IPC”), as well as the much criticized temporary safe harbor for third parties manufacturers/resellers of the designs provided for by art. 239 of the IPC. Moreover, the court of Milan also ruled on the residual protection available under art. 2598 of the Civil Code which, absent grounds to claim copyright protection, may nevertheless prohibit as unfair competition the copying of the appearance of a competitor’s product.

Below we will summarize the position of the Italian case law on the three issues above reported.

COPYRIGHT PROTECTION FOR INDUSTRIAL DESIGN

Article 2, paragraph 10) of the ICL comprehends in the realm of copyrightable works, also the “works of industrial design which per se display creative character and artistic value”. This provision is the result of the transposition in Italy of EC Directive no. 98/71, which mandated member States to provide for copyright protection for industrial design and to allow for both forms of protection (registered design and copyright protection) to be cumulatively claimed. However, the Directive did not harmonize the substantive law requirements for eligibility for copyright protection, so that each member State has been left free to establish the extent of copyright protection and the conditions under which such protection is conferred. The choice of Italy has been to raise the bar at quite a higher level, than that ordinarily required for works of art, so that eligible industrial design must not only be creative but also display artistic value. Up to 2001 industrial designs in Italy were not protectable under copyright law, unless their artistic value were conceptually separable from the industrial character of the products which featured such designs. Moreover, the, at that time in force, “ornamental model law” excluded that copyright and design protection could be cumulatively claimed. De facto before 2001, in Italy copyright protection for the design of a product, if not registered, could be claimed only in a very limited number of cases (mostly in respect of bi-dimensional designs).

Since 2001 commentators in Italy have been struggling around the meaning of the “per se artistic value” requisite that industrial designs must fulfill. However, the IP court of Milan with the mentioned stream of design-related decisions of 2012, has probably for some time put an end to the ongoing discussions. In essence, the Milan forum has expressed the view that, while establishing “creativity” does not require more than finding that a design work is the expression of the author’s own personality, in order to also pass the “per se artistic value” test, the claimant acting for copyright infringement shall be required to demonstrate that its design piece, when looked at in retrospect, has acquired recognition as a trend-setter and a milestone in the history of arts. Namely, in the words of the court: “…it is necessary to capture as objectively as possible the perception of a given design work that has settled in society and, in particular, in cultural circles at large, i.e. not restricted to those directly involved in the sale and purchase of design products. In this vein, a significant indicator of the artistic value of a design work is the widespread consensus among cultural institutions that the design work is at the same time the result of and the foundation of artistic movements, even beyond the intention of the author… This construction of the requirement confines the possibility to allow for copyright protection only to a few industrial design works” (judgment of 2 August 2012 in the case Vitra Patente Ag v. High Tech S.r.l.). To this end, for the burden of proof to be discharged it will be necessary to submit evidence that the design for which protection is sought has been the object of qualitatively remarkable studies, publications and art shows exhibitions.

Clearly, these courts’ findings will in the vast majority of cases exclude copyright protection for any newly created design, to the extent that only the passing of time will allow to establish (ex post) that indeed a design work has contributed to shape artistic trends and taste.

By applying these principles, the Court of Milan has found that designs such as the Panton Chair designed by Verner Panton (Decision 13 September 2012), the Lounge Chair & Ottoman designed by Charles & Ray Eames (Decision 2 August 2012), the “Nathalie” bed designed by Vico Magistretti (Decisions of 5 June and 24 July 2012) are works of industrial design that deserve copyright protection, for their inherent artistic value.

THE SAFE-HARBOUR PROVIDED UNDER ARTICLE 239 OF IP CODE

Jumping over the high “artistic value” bar might yet appear insufficient for those who intend to claim copyright protection in Italy for their products’ design. As a matter of fact, article 239 of the IPC as amended by Law no. 14/2012, provides for a safe-harbor in favor of those businesses that can demonstrate that, in the twelve month period prior to 19 April 2001 (when the law implementing EC Directive 98/71 came into effect), had manufactured or sold products embodying designs which at that date were or had fallen into the public domain. This safe-harbor is quite far reaching, as it prevents right holders from challenging the right of those qualified third parties to keep selling the (otherwise infringing) products beyond 19 April 2001 in respect of: i) products that were manufactured or purchased by them prior to 19 April 2001 and ii) products which they can continue to manufacture for a period of 13 years after 19 April 2001, on condition that it is proved and demonstrated that the quantities of products made after 19 April 2001 do not exceed those that had been lawfully manufacturing prior to 19 April 2001. With this quantitative limit in mind, nothing in the safe-harbor provision seems to prevent third parties manufacturers from stock-piling products embodying the protected design up to 19 April 2014 and then continue to sell them beyond such date, until the stock has been sold-out in full.

The safe-harbor provision of art. 239 appears to be in sharp contrast with the principles of EC Directive no. 98/71 as interpreted by European Court of Justice. The ECJ in the case C-168/09 had in fact already outlawed the previous version of art. 239, which originally provided for a 10 year grace period (allowing manufacturers of otherwise copyright infringing products to keep selling the products in stock up to 19 April 2011). On that occasion the court clarified that, although the Directive is not inconsistent with the provision of a temporary grace period for those who in good faith had started to manufacture design products prior to 19 April 2001, such a grace period cannot be excessively long, so as to detract from the “effetto utile” of the Directive itself. It is clear that the current 13 year extensive safe-harbor can even less be reconciled with the principles set out by the ECJ in case C-168/09. As a consequence, relying upon the C-168/09 decision of the ECJ, the Court of Milan (orders of 20 July and 13 September 2013), without referring back the cases to the ECJ, has directly disapplied the current version of art. 239 of the IPC. Therefore, it can be said that the safe-harbor provision of art. 239 of the IPC should as such no longer be an obstacle to the enforcement of copyright over industrial design works in Italy.

UNFAIR COMPETITION: KNOCK-OFF OF THE APPEARANCE OF A PRODUCT

In the decision issued on 2 August 2012 the Court of Milan, in spite of the exclusion of copyright protection for a number of pieces of furniture which were found to be wanting “artistic value”, ruled that the manufacturing and the sale of furniture which are copycats of pre-existing products may amount to unfair competition pursuant to article 2598, paragraph 1, of Civil Code, i.e. imitation of products which is capable of giving rise to confusion with the products or activity of a competitor.

Since no differences were found between the claimants’ and the defendants’ product, the Court, in the absence of registered design rights or copyright, ruled that a risk of confusion on the origin of the product concerned for the target consumer/user exists, as a consequence of the identical appearance of the defendants’ product with that of the claimant. The unfair “knock-off” competition claim is indeed residual, as it requires that the claimant may inter alia demonstrate that the products’ appearance has some degree of distinctiveness in the eyes of the target user and has not become a “generic” shape due to the tolerance of the right-holder. However, it is certainly a possibility that the design industry should explore when evaluating enforcement actions.