Intellectual property

IP rights

How can franchisors protect their intellectual property (eg, trademarks and copyright)?

Franchisors can protect their trademarks in Italy by means of registration at the Italian Trademarks and Patents Office – based in Rome – or, in case of European or international trademarks, by registering the trademarks respectively at the Office for Harmonisation in the Internal Market in Alicante or at the World International Property Organisation in Geneva.

The regulation of the trademarks is governed by the Industrial Property Code (IPC), which was enacted in Italy by the Legislative Decree 30/2005.

When duly registered, a trademark provides the owner with exclusivity rights for 10 years from the date of the filing of the registration request. From that moment, the owner of the registered trademark has the right to its exclusive use (and thus prohibit its use by third parties).

Must IP licences be registered?

Pursuant to Section 138 of the IPC, agreements that transfer, whether for reward or free, in whole or in part, industrial property rights must be publicly disclosed by means of registration of such agreement at the Italian Patents and Trademarks Office.

As regards trademarks that are the object of a licensing contract, the owner of the trademark keeps its property, but permits its use by other undertakings in return for a payment of royalties. Usually, such trademarks licensing agreements are granted as part of a bigger agreement, such as a franchise.

Know-how

How can franchisors protect their know-how and trade secrets?

Sections 98 and 99 of the IPC expressly recognise the protection of know-how and trade secrets. To be eligible for protection, know-how needs to be secret, carry economic value through its secrecy and be kept by the owner in a proper manner to maintain its secrecy. Consequently, owners of know-how and trade secrets have a legal recourse against parties that communicate such secrets to third parties or obtain them in an illegal or inappropriate manner, usually under unfair competition rules.

Breach

What are the consequences of a franchisee’s breach of the franchisor’s IP, know-how or trade secret rights and what remedies are available to the franchisor in this regard?

Any breach of the franchisor’s intellectual property, know-how or trade secrets will be subject to the general rules on contracts, which may lead to the compensation for the damages suffered by the franchisor and the termination of the contract for failure, by the franchisee, to fulfil its obligations.

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