Gaia Bellomo - Senior Associate
Maria Sole Torno - Stagista
Are names of high value customers a boast for a company?
Nowadays, the reputation among the public and the distinctive character of one's own brands and trademarks are undoubtedly of great interest for companies and unfair market conducts might threaten their competitive value. From a legal point of view, the Italian Civil Code (“I.C.C.”) regulates the behaviour of companies at an individual level, protects them from unfair behaviours and aims to ensure the correct development of market dynamics with its articles reserved to competition regulation (see, among the others, Art. 2598 I.C.C.).
The Italian Supreme Court of Cassation has recently dealt with the subject of unfair competition, ruling on the prohibition of misappropriation of attributes of a competitor’s company or products in particular, making reference to Art. 2958, paragraph 1, no. 2 of the I.C.C..
The case examined by the Court involved the advertising agency 055 Communication S.r.l. and its competitor Senza Filtro S.n.c., the latter having been accused of having published on its own website the name of high value customers of 055 Communication without authorization.
The Supreme Court was asked to provide a ruling on the issue of whether the names of a company's customers should be considered as a competitive asset. In this respect, the Court of Appeal of Florence had already previously expressed its opinion by rejecting the thesis according to which customers’ names may constitute a company's asset, considering them instead to be only historical elements of the business level reached.
Following this decision, 055 Communication S.r.l. appealed to the Court of legitimacy for violation or misapplication of art. 2598, paragraph 1, no. 2, of the Civil Code. Indeed, it claimed that the conduct of an entrepreneur, who shows, contrary to the truth, on its c website another entrepreneur's customers as its own, can amount to an act of unfair competition contrary to professional fairness. Moreover, according to the appellant, Art. 2598, paragraph 1, no. 3, of the Civil Code had also been violated by Senza Filtro S.n.c., since its conduct had been also detrimental to professional correctness, to the extent that it exploited others’ entrepreneurial endeavor.
In its judgment, the Supreme Court deemed it appropriate to deal with both grounds of appeal jointly and to pay reference to its previous decision No. 25607 of 2018 where it already stated that the typical conduct of unfair competition identified as misappropriation of attributes of the products or of the company of others occurs when "an entrepreneur, in advertising or equivalent marketing activities, attributes to its products or company attributes such as medals, awards, qualities, indications, requirements, virtues, not really possessed by him, but belonging to the products or to the company of a competitor, in a way which limits consumers' freedom of choice".
In the present case, the Court states that a competing entrepreneur misappropriates the attributes of another one when, in a communication addressed to third parties, he makes a self-attribution of qualities, peculiarities or characteristics acknowledged to the other one.
According to the Supreme Court, the conduct put in place by an entrepreneur pretending to enjoy a customer portfolio he did not actually have constitutes a case of misappropriation of another company’s qualities.
On the basis of these considerations, the Court set aside the previous judgment of the Court of Appeal of Florence, in the light of the principle according to which "the conduct of "misappropriation of attributes", covered by Art. 2598, paragraph 1, no. 2 of the I.C.C., is integrated by the boast performed by an entrepreneur of the characteristics of his firm, actually taken from those of another competing company, whenever such boast has the capability to make the former wrongfully acquire merits on the market he does not really have and resulting in act of unfair competition for the so-called misappropriation.".
Supreme Court of Cassation, decision of May 19, 2021