This article by Gianpaolo Todisco was published in the September 2014 issue of the IBA Intellectual Property and Entertainment Law Newsletter of the International Bar Association Legal Practice Division.
Background
In order to ensure that information controlled by a
company is protected, it is necessary that this is economically exploitable and
secret, meaning it is hardly accessible as well as adequately protected by
whoever is the rightful owner.
In Italy, in order to claim adequate protection of a
trade secret, the owner must demonstrate the existence of a documented and stringent
protection policy and to have arranged appropriate measures like internal
rules, specifications, safety procedures, confidentiality clauses etc.
The Legal Frame
Under Italian Law, the protection of trade secrets is granted
under Intellectual Property and Unfair Competition Law as well as under the Criminal
Code.
Before the reform of 1995 which acknowledged TRIPS
Agreements, a specific and autonomous legal qualification for the protection of
trade secrets could not be found in the Italian system. Until then, protection could
have been found under the general principles of contract law and unfair competition
law. However, the 1995 reform finally introduced a separate article (article 6-bis) in the 1939 Italian Patent Act[i]
which protected general corporate information from misappropriation.
In 2005, the protection of corporate information under
article 6 bis of the Patent Act was transferred
and expanded in articles 98 and 99 of the Intellectual Property Code
(hereinafter the IP Code).
Articles 98 of
the IP Code
Article 98 defines the perimeter of what is considered
secret information under the IP Code. According to such article:
1. “Corporate
information, and technical-industrial experiences, which are under the
legitimate control of its holder are protected, if such data:
a) are secret in
the sense that they, as a whole or in the combination of their single
components, are not known among (or readily accessible to) experts and
professionals;
b) have economic
value due to their secrecy;
c)
are subject to adequate secrecy measures by persons who
lawfully control such data .
2.
Evidence and data which involve a considerable effort
for the grant of authorization of chemical, pharmaceutical or agricultural products
involving the use of new chemical substances are also protected”.
It must be underlined that art. 98 of the IP Code does
not only protect general corporate information, (as it happened under art. 6 bis of the former Italian Patent Act)
but also more general technical – industrial experiences as commercial
information.
With the introduction in 2005 of articles 98 and 99,
the IP Code finally protects:
a)
technical
information related to procedures and products which are patentable or not[ii];
b)
trade
information related to the implementation of commercial functions;
c) administrative information[iii].
With respect to trade information, before the
introduction of articles n. 98 and 99 of the IP Code, Courts stated that client
lists and more general information as well as economic conditions applied to
clients were treated as confidential information, even in cases when such data
was accessible to only certain employees or known within the company[iv].
After articles n. 98 and 99 were introduced, Courts have abandoned the concept
of per se confidential information,
stating that client lists and more general trade information are granted
protection only if the company has adopted secrecy measures aimed in protecting
such data and that such information has an economic value.
In order to seek for the protection under article 98
of IP Code, all the following requirements have to be met:
a)
the information
must be novel, meaning that it is not known or not easily accessible by
operators of the same territorial and economic sector[v];
b)
the data must
have an economic value, meaning that the company in possession of trade secrets
is in an economically advantageous position with respect to its competitors
which do not hold such data;
c)
the company must
have adopted secrecy measures in order to protect such information from
disclosure, meaning that it must have adopted specific measures in filing and classifying
documents as well as in imparting rules to employees as to avoid disclosure.
Article 99 of IP
Code
The other article contained in the IP Code governing
the protection of trade secrets is art. 99, which states that:
“Notwithstanding
the principles of unfair competition, the legitimate holder of the information
and data referred to under Article 98, is entitled to prevent non authorized third
parties, to acquire, use or disclose such information and data, except for the
case in which they have been independently acquired”.
This article provides trade secrets’ holders with
remedies that apply notwithstanding to the more general unfair competition
discipline of article 2598, n. 3 of Civil Code, which applies only to the wrongful
acts of competitors.
The relationship
between know-how and trade secrets protected under article 98-99 of the IP
Code.
Generally speaking, Italian Courts and Italian authors
have defined know-how accordingly to the CE 04/772, CE 00/2659 and to CE 10/330,
in which an explicit reference is made to such IP asset.
Here Know-how defined as “an asset of non-patented
practical knowledge deriving from experience and evidence which is: (i) secret,
or in other words not generally known or easily accessible, (ii) substantial, i.e.
significant and useful for the production of contractual products, (iii)
identified or described in a sufficient manner as to allow the compliance with
the criteria of secrecy and substance”.
Consequently, know-how appears to overlap only
partially with the definition of secret information under article 98 of the IP
Code, as the only common requirement for the protection seems to be the
economic value of the information. Indeed, such partial overlap derives from
the different nature of the two assets where know-how is generally protected
and determined in order to be licensed, while trade secrets are not meant to
circulate among third parties. Therefore, in case of violation of know-how by
third parties, Courts have generally applied the principles of unfair
competition under article 2598, § 3, rather than articles 98 and 99 of IP Code.
The unfair
competition rules contained in the Civil Code
Art. 2598 § 3 of the Italian civil code article states
that “... anyone that uses directly or
indirectly any mean which does not comply with the principles of fair
professional conduct and which is capable of harming other companies performs
acts of unfair competition”.
It must be noted that such rule is applicable only
between competing entrepreneurs so that, for example, if a consultant steals a
trade secret in the furtherance of a contractual relationship, protection under such article could not be
claimed.
The rule under art. 2598 § 3 protects information
which is not per se confidential, but
only in the presence of behavior that is deemed unfair and when the parties are
competitors. This of course means that when the unfair act is carried out by
the employee, the claimant cannot seek protection under this article unless the
ultimate beneficiary is competitor. This occurs for example, when the employee steals
trade secrets for the benefit of a competitor, unless defendant proves otherwise[vi].
More specifically Courts have also considered the theft
of trade secrets through espionage as an unfair conduct[vii]
as well as the appropriation of confidential information, illegally stolen, when
the ultimate effect is the subtraction of commercial and industrial secrets
that the company does not want to put in the hands of third party competitors[viii].
Also the theft of secrets through the hiring of a
competitors’ employees constitutes an unfair competition act when the ultimate
purpose is to obtain their technical knowledge in order to enter the market
sooner than it would be possible on the basis of their studies and research[ix].
Again Courts have stated that the termination of an
employment relationship does not prevent competitors from passing off actions for
the misappropriation of trade secrets by the ex-employee when he continues to contact
the competitor’s regular customers by offering the same products and omitting
any communication regarding termination of employment[x].
We should also briefly mention that the
misappropriation of trade secretes is recognized as an unfair completion
conduct by art. 2105 n. 6 of the civil code which regulates the duty of loyalty
of the employee that should refrain from any behavior that may affect the
interests of the company while benefitting a competitor. Indeed, the employee has
a legal obligation to secrecy for the entire duration of the employment
relationship, which may be extended also after the termination by signing a
non-competition agreement.
The protection
granted by Criminal Law.
Apart from the rules stated in the IP and Civil Code
an effective degree of protection can be found in the Criminal code under
articles 621 and 623.
These articles censor the revelation of the contents
of secret documents and of trade secrets with the possible punishment of
imprisonment.
More specifically the Italian criminal code protects
the content of secret documents and records, whether public or private against
unpermitted disclosure with imprisonment up to three years or a fine. For the purposes
of protecting new supports also computer devices containing data, information
or programs fall within the definition of “documents”.
Protection is also granted in case a secret is
revealed for the profit of third parties by reason of their status or office,
or profession and without just cause with imprisonment or a fine.
The penalty is increased if the offense is committed
by directors, general managers, managers responsible for preparing corporate
accounting documents, auditors or liquidators, or if it is committed by those
who carry out the audit of the company.
In light of the system
described above, data and trade secrets holders can seek for an effective protection
under Italian Law and can find an adequate response to their needs in the
Courts rulings that continuously evolve in order to
[ii]
According to the Court of Rome executive designs related to the construction of
plants for the production of fibers are protected as secret information (Court
of Rome decision of March 31, 2004 in Giurisprudenza Annotata di Diritto
Industriale, 04, p. 997.
[iii]
With respect to administrative information, Courts have stated that
documentation related to the UNI, EN, ISO 9001 quality certification is
protected as trade secret (Court of Mantova, 12th of July, 2002).
[iv]
Court of Verona, May 4th, 1996; Court of Appeal of Florence, 24th April, 1976;
Court of Milan, 24th May, 1973;
[v]
Italian Courts have excluded protection for lack of novelty in cases of reverse
engineering, Milan Court of Appeal, 25th of January 1972 and Court of Rome, 1st
of July 1985.
[vi] Court of Appeal of Bologna, June 19, 1995.
[vii] Court of Modena, July 15, 1996.