The Italian Council of State (Section III) has ruled on the concept of exclusivity with sentence no. 748 of 5/2/2018, establishing that even if existing, the exclusive rights of a company cannot prevent the call for a public tender.

A hospital in Rome had launched a tender for the supply of medical devices, but the award procedure was challenged by an applicant that proved to enjoy exclusive rights on said products.

The position of the Council of State is based on art. 63, par. 2, let. b), pt. 3 of Legislative Decree n. 50/2016, which states that "in the case of public work, supply and services contracts, the negotiated procedure without prior publication of a tender notice may be used [.] b) when supplies or services can only be provided by a given economic operator for one of the following reasons: [.] 3) protection of exclusive rights ".

The issue is therefore built on the use of the verb 'may'. Indeed, while recognizing the exclusive rights of an economic operator, the Italian Procurement Code does not oblige public administrations to award the tender directly to those who enjoy exclusive rights.

The legislator, in essence, provides this possibility but does not impose it as an obligation.

The reason for this opening is to be found in the fact that competitors may have purchased the goods to be supplied before the company gained the exclusive rights or abroad, and therefore out of the scope of validity of the right itself.

In the present case, for example, the company enjoying exclusive rights, obtained them after the contract award procedure had been launched.

However, what the decision of the Council of State indicates, is that a possible infringement of the right of exclusivity does not as such constitute sufficient grounds to cancel an award decision. In fact, the aforementioned infringement only takes place in the civil law sphere, since the binding legal effects do not affect the public administration that opens the tender process unless the successful tenderer is then unable to supply the goods or services requested.

This ruling overturns the common opinion that leads many of us to think that when a company possesses exclusive rights, a call for tenders is not required and the contract should be directly awarded instead.