What point has the sports law reform reached?

Roberto Ninno - Partner

Lorenzo Joel Terranova - Associate

What point has the sports law reform reached?

For more than forty years, L. 23/03/1981, No. 91 bearing "Norms concerning relations between companies and athletes" has been the industry benchmark for legal interpreters. A regulation from yesteryear one could argue, at least in light of its "longevity," which, however, is heading for repeal. In fact, the revolution of the discipline began in 2019 when the Delegated Law 8/8/2019, No. 86 (entitled "Delegations to the Government and other provisions on sports organization, sports professions as well as simplification") was approved.

The Parliament, outlining the principles and guiding criteria with which the new legislation must comply, therefore instructed the Government to adopt "one or more legislative decrees" aimed at reorganizing the discipline of the sector with reference to both the organization of the Italian National Olympic Committee (CONI) and the sports professions reserving, in the end, a chapter on the simplification of administrative procedures and safety in the sports field.

Analyzing the guidelines dictated by Parliament to the executive, it seems that the legislature was moved by the animus proper to a "champion of the values of sport" with the aim of leading the sports system back to its atavistic (and lost?) values, in line with the dictates of the Constitutional Charter.

Thus, it is not surprising that among the key-words found in the text of the Delegated Law stand out: "organization," "homogeneity of the regulatory framework," "promotion," "women's participation," "social and preventive-health character of sporting activity," "equal opportunities," "health and safety of minors" (who play sports) and even "protection and welfare of animals used in sporting activities."

Deadline for the adoption of the decrees? 12 months from the entry into force of the Delegated Law. Then the pandemic, and ... then what?

Are there today these legislative decrees? What has already changed and what will change?

To the first question we can answer positively: they exist.

Between March 18 and 19, 2021, five legislative decrees implementing Articles No. 5, 6, 7, 8 and 9 of the enabling act were published in the Official Gazette:

  • Legislative Decree No. 36 of Feb. 28, 2021 "reorganizing and reforming the provisions on professional and amateur sports bodies as well as sports labor";
  • Legislative Decree No. 37 of Feb. 28, 2021 "on measures regarding the representation relationships of athletes and sports clubs and access to and exercise of the profession of sports agent";
  • Legislative Decree No. 38 of Feb. 28, 2021 "on measures on the reorganization and reform of the safety for the construction and operation of sports facilities and regulations on the modernization or construction of sports facilities";
  • Legislative Decree No. 39 of February 28, 2021 "on simplification of requirements for sports bodies";
  • Legislative Decree No. 40 of Feb. 28, 2021 "on safety measures in winter sports disciplines".

Coming to the second question, what has changed and what will change?

The reorganization process has suffered a setback due to the intervention of Decree-Law No. 41 of March 22, 2021, converted into law, with amendments, by Law No. 69 of May 21, 2021, better known as the "Supports Decree," which in Art. 30, co. 7, provided for the modification of the deadlines for the measures contained in the implementing decrees by postponing them.

It is not over.

A further change is due, most recently, to the entry into force of Decree-Law No. 73 of May 25, 2021, converted, with amendments, by Law No. 106 of July 23, 2021 (the so-called "supports bis decree"): it is in the light of this last discipline that we can finally draw conclusions and answer the second question. There are three different terms of application of the provisions contained in the reform, rectius in the No. 5 implementing decrees: January 1, 2022, August 31, 2022 and January 1, 2023. Specifically, as a result of the provision in Article 10, para. 13-quater of the aforementioned Decree-Law, the following apply:

  1. as of January 1, 2022, the (only) provisions of Articles 10, 39 and 40 and Title VI of Legislative Decree No. 36 of February 28, 2021, as well as those of Legislative Decree No. 40 of February 28, 2021, which, specifically, concern:
  • modalities for the recognition of amateur sports associations and clubs;
  • the Fund for transition to professionalism and the extension of labor protections in women's sports;
  • the promotion of gender equality at all levels and in every structure; iv. safety measures in winter sports disciplines.

  1. As of Aug. 31, 2022, the provisions set forth in Legislative Decree No. 39 of Feb. 28, 2021, "simplification of fulfillments related to sports bodies" concerning the simplification of administrative burdens on sports bodies as well as in the area of combating and preventing gender-based violence.

    The text of the decree in question is thus among the most emblematic of the inspiring rationale behind the reform, which, as anticipated, aimed to ensure that the practices of the (new) sports world were marked by a model that was, in concrete terms, guaranteeing constitutional principles. It is no coincidence that the aforementioned decree, in addition to providing the establishment of the National Register of Amateur Sports Activities (which is essential for the purpose of recognizing the legal personality of amateur sports associations), includes provisions aimed at the protection of minors, the prevention of harassment and gender-based violence as well as other discriminatory cases relating to:

  • ethnicity;
  • religion;
  • personal beliefs;
  • age;

  • sexual orientation.

    All of which delegates to both National Sports Federations and Amateur Sports Associations and Societies and Professional Sports Societies the task of adopting the relevant codes of conduct and organizational models functional to this end.

  1. As of January 1, 2023, all regulations (except those effective as of January 1, 2022, see point no. 1 above) referred to in:
  • Legislative Decree No. 36 of February 28, 2021 "Reorganization and reform of the provisions on professional and amateur sports bodies as well as sports labor";
  • Legislative Decree No. 37 of Feb. 28, 2021 "Measures on the representation relationships of athletes and sports clubs and access to and exercise of the profession of sports agent";
  • Legislative Decree No. 38 of Feb. 28, 2021 "measures on the reorganization and reform of safety regulations for the construction and operation of sports facilities and regulations on the modernization or construction of sports facilities".

A clarification needs to be made. The central point of the reform, if only in terms of its concrete scope of application, is probably to be found in the provisions contained in these last three decrees.

The innovative character is dictated by the fact that the legislature has, in fact, dismantled (so much so as to provide for its abrogation in toto) the past codification of L. 23/03/1981, no. 91, going so far as to reformulate ex novo the labor law principles that had hitherto been applied in the interpretation of "sports" labor relations.

The novelty is not insignificant, especially taking into consideration the difficult issues inherent in the so-called "sports bond," a punctum dolens that has not failed to generate tensions, and this even before the actual entry into force of the text.

Coming to the details of the main novelties, it is enough to consider the domains of application of the new provisions of which the topics of greatest interest are listed below:

  • discipline of amateur and professional sports entities;
  • discipline of individuals (membership, minor athletes, technicians, sports managers and match directors);
  • provisions for the protection of animals in sports disciplines involving their use;
  • provisions on sports labor;
  • provisions on equal opportunities for persons with disabilities in access to military and civil corps sports groups of the state.

Reconnecting with the incipit of the article, consider that the rules dictated here not only provide for the repeal of the discipline that for more than forty years has been the reference for interpreters of the law, but even overturns past assumptions, betting on the modernity of the sports system.

Taking into account the complexity and breadth of the reform, Clovers decided to devote a special focus to the various implementing decrees so as to ensure a careful examination of the new provisions and, at the same time, not to exhaust the many insights and analysis offered by the innovative nature of the new legislative framework. Clovers intends to follow the evolution of the reform step by step, and to this end, for the analysis of the individual decrees and the respective novelties contained therein, it makes an appointment for all readers to the next episode.

Ambush marketing and protection of promotional investments between past and future

In view of the next Winter Olympics, which will feature the mountain territories of Lombardy and Veneto as the protagonists of the world sports scene, an important regulatory instrument will protect registered trademarks and companies from parasitic and misleading advertising, carried out not only during the Olympics, but also during all sporting events or trade fairs of national or international importance that will take place on Italian territory.

The new discipline that counteracts unauthorized advertising, is contained in the decree-law on 'Urgent provisions for the organization and holding of the Winter Olympic and Paralympic Games Milan-Cortina 2026 and the ATP Finals Turin 2021 - 2025, as well as on the prohibition of parasitic advertising', published in the Official Gazette n.66 of March 13, 2020, converted into Law no.31 of May 8, 2020 and published in the Official Gazette no.121 of May 12, 2020, and represents the first organic intervention of the Italian legislator in this matter, having been preceded only by contingent measures for individual sports events.

Unauthorized advertising associated with events of national or international resonance is defined in practice as 'ambush marketing' and identifies the unauthorized conduct of those who associate their brand with an international event, for the sole purpose of exploiting its media resonance and without bearing the costs of sponsorship.

Ambush marketing gives rise not only to a deception for the public - which will associate the brand illegally connected to the event with the event itself - but also to a parasitic link with the actual sponsors of the event and may constitute a violation of the rules protecting unfair competition (art. 2598 Civil Code) and fair advertising communication (Legislative Decree no. 145 of August 2, 2007 and the Advertising Self-Discipline Code).

In particular, the regulation prohibits the following activities:

  1. the creation of an indirect link between a trademark or other distinctive sign and one of the events, suitable to mislead the public about the identity of the official sponsors;
  2. falsely stating in one's advertising that one is an official sponsor of one of the events; or
  3. the promotion of one's own brand or other distinctive sign, through any action, not authorized by the organizer, that is suitable to attract the attention of the public, carried out on the occasion of one of the events, and suitable to generate in the public the erroneous impression that the author of the conduct is the sponsor of the sporting event or exhibition itself
  4. the sale and advertising of products or services that are improperly marked, even only in part, with the logo of a sports or exhibition event, or with other distinctive signs likely to mislead the public about the logo and to create the erroneous perception of any connection with the event or its organizer.

Depending on the way it is carried out, ambush marketing is usually classified into: "insurgent ambush", which is the organization of surprise initiatives close to the event; "predatory ambush", which uses distinctive signs in connection with or indirectly recalling the event “saturation ambush", which occupies all the published space left over from that used by official sponsors.

From a temporal point of view, the bans operate from the 90th day prior to the official start date of the sports or exhibition event, until the 90th day after its conclusion, while, from an operational point of view, sponsorship contracts for athletes, teams and participants in events are excluded from the rule.

The authority in charge of ascertaining and repressing ambush marketing conduct is the Antitrust Authority (AGCM), which can apply administrative fines ranging from 100 thousand euros to 2.5 million euros, depending on the case.

Recently, it was precisely the AGCM that dealt with a case of ambush marketing relating to the 2020 UEFA Cup, going so far as to fine the e-commerce Zalando com 100,000 euros against Zalando SE ("Zalando"), for violation of Article 10, paragraphs 1 and 2, letter a), of Decree Law No. 16 of March 11, 2020.

The censured agreement consisted of the display, in the same square in Rome where the official Euro 2020 area was set up, of a poster asking "Who will be the winner?" accompanied by the distinctive signs of Zalando affixed to a soccer shirt flanked by the flags of the Euro 2020 national teams.

This advertising was deemed illicit by the AGCM because Zalando's poster was likely to make consumers believe that Zalando was an accredited partner of the event as it created an undue connection between Zalando itself and the event of which it was not an official sponsor.

The Agcm's decision was careful to value all the circumstances of the case and, therefore, in view of the upcoming winter games, it is of primary importance that companies carefully evaluate their marketing campaigns before accidentally incurring in profiles of violation of advertising regulations.

The "transfer of employees" between free enterpreneurial initiative and act of unfair competition

The transfer of employees from one legal entity to another may integrate, at the occurrence of specific conditions, a case of unfair competition as provided for in article 2598 n. 3 of the Italian Civil Code which provides that "acts of unfair competition are committed by anyone who: (...) 3) uses directly or indirectly any other means not in accordance with the principles of professional fairness and suitable to damage the other company”.

Specifically, this refers to conducts that do not comply with professional integrity or dignity of the profession and are aimed at the illegitimate appropriation of a competitor’s market space and/or clients. A prerequisite for the offence is in fact necessarily the existence of a situation of competition between two or more entrepreneurs, deriving from the simultaneous exercise of the same industrial or commercial activity in a territorial area that is even only potentially common and a connected potential commonality of clients.

In order to clarify when there is a real risk of integrating a case of unfair competition and distinguish it from its physiological phenomenon, it becomes crucial to identify the boundary, often blurred, between a simple act of hiring, even multiple, of employees of third parties, falling in general in the free entrepreneurial initiative and a real act of transfer of employees to be considered as an act of unfair competition which gives rise to civil liability.

In this regard, some relevant judgments on the merit have clarified that "the transfer of employees from one company to another does not constitute in itself an act of unfair competition under article 2598 n. 3 of the Italian Civil Code. ...but becomes unlawful when it is accompanied by a series of elements - such as the number of employees transferred, their professional competence, the role they played in the transferred company - which highlight the unlawfulness of the conduct of the transferring company, which takes advantage in a parasitic way of the training investments made by the transferred company on its employees transferred" (Court of Turin, February 4, 2009 and inter alia Court of Milan, specialized business section February 26, 2018) and also that "in terms of unfair competition for diversion of customers the unlawfulness of conduct must not be sought episodically, but must be inferred from the tendential qualification of the acts put in place to damage the competitor, or to systematically take advantage of its goodwill in the market)" (Court of Cassation n. 12681/07, Court of Milan, February 1, 2022 and also Court of Milan, March 22, 2019).

In the light of these principles, the same case-law has therefore identified some significant indicators of the transfer of employees specifying that, by way of example, such case of unfair competition is integrated when the disloyal competitor acts:

  • in violation of labor law regulations (for example, as regards the notice periods) and of the other absolute rights of the competitor (such as reputation and intangible property rights and confidential information);
  • in ways that are not physiological, as they are potentially risky for the business continuity of the entrepreneur who suffers the trasnfer in his competitive ability, taking into account, on the one hand, the normal dynamics of the labor market in a specific economic context and, on the other, the internal conditions of the loyal company (for example, it has been held that, in cases of business crisis or situations of difficulty, the breaking up of the workforce and the increased outflow of employees are to be considered a physiological effect);
  • with methods that have a shock effect on the ordinary activity of offering goods or services of the transferred company and that potentially jeopardize the business continuity of the entrepreneur in its competitive capacity, or cause alterations beyond the threshold of what can be reasonably foreseen and therefore not susceptible of being absorbed through an adequate reorganization of the company.

The material conducts described above must also be carried out with the so-called animus nocendi, to be understood as a will, that cannot be justified in relation to the principles of professional correctness and suitable to create distorting effects in the market and to cause damage or destroy the competitor: in other words, the transfer of employees is only forbidden if implemented with the precise intention of damaging the competing company, which can, however, be assessed presumptively in the light of a series of objective indicators, identified by case-law in the quantity and quality of the transferred personnel, in its position within the transferred company, in the difficulty that can be linked to its replacement and in the methods that may have been adopted to persuade employees to transfer to the transferring company.

Only when all the abovementioned requirements are met and proven, at least in an indicative and presumptive manner, the case of transfer of employees will be configured and the author of such unfair competition act may be called upon to compensate the damage, often significant, suffered by the transferred competitor.

Wine trademarks between validation and tolerance of use

With a recent ordinance (09.02.2022) the Court of Turin has expressed itself regarding the counterfeiting of some trademarks registered by a wine cellar, mainly for wine products in class 33. In the aforementioned order, the Court of Turin also took the opportunity to clarify the difference between the legal institution of validation, provided for by art. 28 of the Industrial Property Code, and the different, albeit relevant, phenomenon of tolerance with respect to the use of a later trademark by the owner of the earlier registered trademark.

The trademarks involved in the case, which were written on the labels of bottles, consisted in particular of the word "SOLO" accompanied by the type of wine (pinot, prosecco, shiraz, etc...) or alcoholic beverage (grappa). These were trademarks regularly registered by the owner at a national level.

In particular, the trademark invoked in the precautionary proceedings was the following:

The appellant, a wine cellar in Frascati, therefore contested the use of the de facto trademark "SOLO PINOT NERO" for wine products by a competitor in the Piedmont area, claiming infringement of its earlier trademark registered under art. 20 C.p.i. (the respondent used a trademark identical or very similar to that of the appellant for identical products).

The defense of the respondent was based first of all on the exception, rejected by the judge, of the validation pursuant to art. 28 C.p.i.. This provision states that the owner of a registered trademark who, for 5 consecutive years, tolerates, being aware of it, the use of a later registered trademark that is the same or similar, cannot therefore ask for it to be declared null and void or oppose its use for the goods or services in relation to which the said trademark has been used.

The ratio of this institute is to be found in the balancing of two different interests: on one hand, that of the owner of the later trademark to avoid seeing the investments made over the years for the accreditation of his own sign cancelled, and on the other hand, that of the consumer to avoid seeing a situation suddenly changed which is now consolidated.

The norm is clear in reserving the benefit of validation only to subsequently registered trademarks and the prevailing jurisprudence is in line with the literal interpretation of the norm. However over the years, also on the basis of some doctrinal ideas, this literal interpretation has seemed to be lacking. Just in the wine sector and just the Court of Turin in 2016 in fact had clearly left to glimpse the possibility of an analogical interpretation (extension) of the rule on validation also to trademarks of fact.

With judgment no. 2256/16 of 22.4. 16 the Court of Turin in fact had clearly argued about the advisability of extending the benefit of validation to de facto trademarks: according to the Court, since the de facto trademark is protected by the rules on unfair competition, rules that implement "principles of protection of the wealth produced by investments and aversion to parasitic initiatives", it must be reached "if not to an analogical application of the institution of validation to unregistered trademarks - at least" to deny protection to a trademark "with respect to equal or similar signs used for a long time in the knowledge and without the opposition of the owner of the trademark".

Well, with the ordinance of February 2022, the same court of Turin seems to go back on its own steps: according to the Court, "Given that it could not be spoken of validation of the trademark, ex art. 28 CPI, because this effect is prescribed only with reference to registered trademarks, the tolerance of the use of the trademark of others, by the owner of the previous registered trademark, could demonstrate the absence of an abstract danger of confusion about the different entrepreneurial origin and involve a limit to the protectability of the previous trademark".

While therefore denying analogical extensions of the validation rule to unregistered trademarks, the Tribunal highlights the relevance, for the purposes of excluding the likelihood of confusion and therefore infringement, of conduct of tolerance with respect to later de facto trademarks by owners of earlier registered trademarks. However, even in the case of tolerance, the Court recalls the limits of its operativeness: "the case of 'tolerance' cannot be recognized where there is no proof of effective knowledge, on the part of the owner of the earlier trademark, of the subsequent use, for a certain period of time, of the de facto trademark of others".

"For the purposes of the recognition of this "tolerance", it is not sufficient a presumed inactivity of the owner of the earlier trademark with respect to the use of the later trademark, but it is necessary that the owner of the earlier registered trademark has put in place, while being aware of such use, behaviors that can be considered as tolerance of such use (Trib. Venezia Sez. PI, 20/10/2006)."

The burden of proof of this tolerance is on the owner of the later trademark. The proprietor of the later trademark must prove, not only that the proprietor of the earlier trademark was aware of the filing of the later trademark, in a concrete manner and not on a presumptive basis, but also that the proprietor of the earlier trademark has shown tolerance to such use for a certain period of time. Therefore, proof (or fumus thereof) of actual knowledge of the use of the later trademark is necessary, because in the absence of actual knowledge of the use of the other trademark, one cannot even speak of tolerance (Turin Tribunal 15/1/2010).

ART and CULTURAL GOODS, NEW CRIMES and COMPLIANCE: THE FINAL PUSH FOR THE ADOPTION OF THE 231 MODEL

Just a few days ago, the Chamber of Deputies gave its final approval to the bill entitled "Provisions on crimes against cultural heritage".

The text reforms the criminal provisions for the protection of cultural heritage - currently contained mainly in the Code of Cultural Heritage (Legislative Decree no. 42 of 2004) - and inserts them within the Criminal Code with the aim of carrying out a profound reform of the subject, redefining the structure of the discipline with a view to a tendency to tighten the sanctioning treatment, as provided by the Nicosia Convention of the Council of Europe ratified by Italy, and therefore, it is believed, with more preventive purposes.

Following the modifications approved by the Senate, the bill consists of 7 articles through which: i) it places in the Criminal Code the criminal offences currently divided between the Criminal code and the Code of Cultural Heritage; ii) it introduces new types of offences; iii) it raises the edictal penalties in force, thus implementing the constitutional principles according to which the cultural and landscape heritage needs further protection compared to that offered to private property; iv) it introduces aggravating circumstances when cultural heritage is the object of common offences; v) it intervenes on article 240-bis of the Criminal Code, extending the catalogue of offences that can be committed against cultural heritage. p. by expanding the catalog of crimes in relation to which the so-called extended confiscation is allowed; vi) intervenes on article 240-bis of the Italian Criminal Code. vi) modifies legislative decree no. 231 of 2001, providing for the administrative responsibility of legal entities when crimes against cultural heritage are committed in their interest or to their advantage; vii) modifies paragraph 3 of art. 30 of law no. 394 of 1991 regarding protected areas; viii) intervenes in the discipline of undercover activities, providing for their applicability also within the scope of activities to combat the crimes of money laundering and self-laundering of cultural assets carried out by police officers of bodies specialized in the sector.

As regards amendments to the Criminal Code, a new Title VIII-bis Of crimes against the cultural heritage is inserted and the following articles are introduced:

  • 518-bis Theft of cultural property
  • 518-ter Misappropriation of cultural assets
  • 518-quater Receipt of cultural assets
  • 518-quinquies Use of cultural assets originating from a crime
  • 518-sexies Laundering of cultural goods
  • 518-septies Self-laundering of cultural goods
  • 518-octies Forgery of a private contract relating to cultural goods
  • 518-novies Violations regarding the sale of cultural goods
  • 518-decies Unlawful importation of cultural goods
  • 518-undecies Illicit exit or export of cultural goods
  • 518-duodecies Destruction, dispersion, deterioration, defacement, embellishment and unlawful use of cultural goods or landscapes
  • 518-terdecies Devastation and looting of cultural and landscape goods
  • 518-quaterdecies Counterfeiting of works of art
  • 518-quinquiesdecies Cases of non-punishability
  • 518-sexiesdecies Aggravating circumstances
  • 518-septiesdecies Mitigating circumstances
  • 518-duodevicies Confiscation
  • 518-undevicies Fact committed abroad
  • 707-bis Unlawful possession of soil borings or metal detecting equipment.

With reference to the amendments made to Legislative Decree no. 231/2001, the following regulations are to be introduced:

  • Art. 25-septiesdecies Crimes against the cultural heritage
    • Misappropriation of cultural assets
    • Illegal importation of cultural assets
    • Illegal exit or export of cultural assets;
    • Destruction, dispersion, deterioration, defacement, embellishment and illegal use of cultural assets and landscapes;
    • Counterfeiting of works of art;
    • Theft of cultural assets;
    • Receipt of cultural assets;
    • Forgery in private agreements relating to cultural assets.
  • Art. 25-duodevicies
    • Laundering of cultural assets;
    • Destruction and looting of cultural assets and landscapes.

It should be noted that the most important and impactful aspects of the reform have to do with the inclusion

  1. within the catalog of crimes in relation to which the extended confiscation is allowed, the crimes of receiving cultural goods, use of cultural goods from crime, recycling of cultural goods, self-laundering of cultural goods and activities organized for the illicit traffic of cultural goods, as well as
  2. within the catalog of predicate offences set out in Legislative Decree no. 231/2001, in the case of the commission of the aforementioned crimes in the interest or to the advantage of the entity, the two new articles 25 septiesdecies and 25 duodevicies.

Moreover, this further enlargement of the catalog of crimes of Legislative Decree no. 231/2001 comes very close after the equally recent introduction of the new art. 25 octies.1 following the implementation of Directive 2019/713/EU on the fight against fraud and counterfeiting of non-cash means of payment (including cryptocurrencies and virtual currencies) by Legislative Decree no. 184/2021 which amended articles 493-ter and 640-ter of the Italian Criminal Code and introduced article 493-quater of the Italian Criminal Code.

In the face of the tightening of the sanctions and the widening of the responsibilities, as briefly illustrated above, especially in the light of the inclusion of articles 25 septiesdecies and 25 septiesdecies of the Italian Criminal Code in the catalog of offences pursuant to Leg. 25 septiesdecies and 25 duodevicies (the relative sanctions of which can go as far as definitive disqualification from exercising the activity) it is desirable that auction houses, art galleries and, more generally, all professional operators in the sector with a medium-large organised structure, carry out a preventive risk analysis in order to assess the relevance of the new offences with respect to the company's operations and the activities actually carried out, in all their forms.

In the light of this analysis, where the nature of the activity actually carried out and the structure of the entity, through which this activity is carried out, require it, these operators should adopt an adequate Model of organisation and control, appoint a Supervisory Body, prepare and implement specific and effective protocols aimed at preventing the commission of the aforementioned offences and, in the final analysis, aimed at avoiding the application of the substantial penalties (also) to be borne by the entity itself in the event that one or more of the persons in charge is nevertheless responsible for some of the conduct that is criminally relevant pursuant to and for the purposes of the aforementioned regulations.

In fact, it should be pointed out that both of the aforementioned recent amendments, with the introduction of the relative regulations pursuant to and for the purposes of Legislative Decree no. 231/2001, are intrinsically linked if one thinks of payments relating to transactions involving the purchase, sale or, in any case, the transfer or exchange for valuable consideration of works of art and/or latu sensu cultural assets. In fact, for example, the explosion of the NFT market, mostly linked to the world of art, whose underlying currency is the cryptocurrency Ethereum, is there for all to see.

FOOD LAW: the new regulation of unfair trade practices in the food industry

Clovers reports an important new regulation with important effects in the field of contracting and commercial practices in the food industry.

THE NEW REGULATION OF UNFAIR COMMERCIAL PRACTICES IN THE AGRI-FOOD SECTOR

As you may already know, the recent implementation in Italy of EU Directive 2019/633 has introduced stringent rules to which companies operating in the agricultural and food supply chain must comply from 15 December 2021.

The main novelties of this reform concern both the contracts (in existence or to be stipulated), and the discipline of competition between companies operating in a sector that is of vital importance in the promotion of Italian excellence and that involves products ranging from milk to plants, passing through wine and tobacco.

In order to ensure compliance with the new regulations, penalties are also foreseen, which can reach the threshold of 10% of the transgressor's turnover in the financial year preceding the assessment.

You will find below the most relevant aspects of the new discipline, divided by thematic areas of interest.

What is this about

The reform deals with the regulation of contracts, commercial practices, the practice of selling below cost and other important aspects that regulate the agri-food chain in Italy.

To whom it is addressed

It is a discipline that applies only to B2B relations, excluding, therefore, contracts with final consumers.

The recipients are both suppliers and buyersoperating in the agro-food supply chain sector:

  1. who are involved in the transfer of agricultural and food products,
  2. in cases where the supplier is established in Italy,
  3. whatever their turnover is.

Novelties regarding contracts

As far as supply contracts are concerned, the regulation provides for compliance with precise obligations regarding content, duration and form and establishes that all existing contracts must be adapted by June 15, 2022at the latest.

1. obligations (and prohibitions) regarding content

  • When negotiating new contracts or adapting existing ones, the key rule is clarity: the legislation spells out precisely which provisions must be included in contracts and which are prohibited:
  • From a practical point of view, all contracts between suppliers and purchasers must always include precise indications regarding the quantities and characteristics of the products sold, the price (which may be fixed or determinable on the basis of criteria established in the contract) the duration, the delivery and payment methods for the goods supplied.
  • On the other hand, it is expressly forbidden to include in contracts agreements aimed at:
    • establishing payment terms of more than 30 days for perishable products and more than 60 days for other agricultural and food products
    • allowing cancellation by the buyer of orders for perishable products with less than 30 days notice, with some exceptions;
    • unilaterally changing terms and conditions regarding the frequency, method, location, timing or volume of supply or delivery of products, quality standards, payment terms or prices, or regarding the provision of ancillary services;
    • allowing the supplier to be required to make payments which are not related to the sale of the agricultural and food products or to bear the costs of deterioration and/or loss of products occurring on the buyer's premises or otherwise after such products have become the property of the buyer, where such deterioration or loss has not been caused by the supplier's negligence or fault;
    • imposing, directly or indirectly, unjustifiably onerous conditions of sale, purchase or other contractual terms;
    • selling agricultural products and foodstuffs on contractual terms that are unduly burdensome, including selling at prices that are manifestly below the cost of production;
    • imposing on the buyer products with expiration dates that are too short;
    • imposing contractual constraints on the maintenance of a certain assortment of products;
    • imposing on the purchaser the inclusion of certain products in the assortment;
    • imposing on the purchaser the obligation to reserve for certain products privileged positions on the shelves or in the stores.
    • excluding the application of default interest to the detriment of the creditor or the costs of debt collection; provide for the supplier's obligation not to issue an invoice until a certain period of time after delivery of the products, with certain exceptions;

and more generally

  • apply objectively different conditions for equivalent services;
  • subordinate the conclusion and execution of contracts and the continuity and regularity of commercial relations to the performance of services which, by their nature and according to commercial usage, have no connection with the subject matter of the contracts and commercial relations; and
  • impose the obligation to provide services and ancillary services which have no objective connection with the products transferred under the contract
  • impose an unjustified and disproportionate transfer of economic risk from one party to its counterparty.

It is allowed, as long as it is clearly written and agreed upon by the contracting parties (see the following paragraph on the so-called "grey list"), to include clauses that provide that:

  • the buyer returns unsold agricultural and food products to the supplier, without paying any payment for such unsold products and/or their disposal;
  • the supplier is required to make a payment as a condition of storing, displaying, listing or marketing its products;
  • the buyer requires the supplier to bear the cost of discounts on agricultural and food products sold by the buyer as part of a promotion, with some exceptions;
  • the purchaser requires the supplier to pay the cost of advertising the purchaser's products;
  • the purchaser requires the supplier to pay the costs of the purchaser's marketing of products;
  • the purchaser requires the supplier to pay the costs of staff to organise the supplier's product sales space.

Duration

An important indication concerns the duration of contracts, which must be at least 12 months, unless proven requirements arising, e.g., from the seasonality of the products to be supplied, specifically agreed by the parties or through trade associations; outside this exception, contracts entered into with a shorter duration, will be considered valid for up 12 months.

Written form

Again with the aim of reducing the margin of uncertainty between suppliers and purchasers as much as possible, the new regulations require contracts to be in writing.

NB: good business practice

Among the most important innovations, the regulation expressly provides for the possibility for operators in the supply chain to use in their activities advertising messages bearing the following wording: "Product conforms to good commercial practices in the agricultural and food supply chain", when not only the criteria set out in point 1 regarding the content of contracts are met, but it is demonstrable that the parties are acting in accordance with fairness, transparency and good faith in the reference market.

The use of this claim is always subject to verification by the ICQRF.

Prohibited commercial behaviors and in "Grey list".

The new regulations list in detail a series of prohibited commercial behaviors that must always be avoided by all companies operating in the agri-food sector, regardless of the existence or not of contractual relationships.

These are so-called "unfair commercial practices" which are distinguished, according to their seriousness, as follows

1. commercial practices that are in any case prohibited (so-called "black list") and

  1. practices that would be prohibited unless previously agreed between the parties in the transfer contract or in another subsequent agreement. (so-called "grey list")

1. The so-called "black list"

Prohibited practices include all the conduct already examined with reference to prohibited content in contracts between suppliers and buyers, but there are also others, which are independent of an existing supply relationship between the parties, including:

  • the unlawful acquisition, use or disclosure by the buyer of the supplier's trade secrets;
  • the threat of, or the very act of, commercial retaliation against the supplier when the latter exercises his contractual and legal rights
  • the sale of agricultural products and foodstuffs through the use of tenders and electronic auctions with double discounts;
  • the omission of at least one of the conditions required by Article 168(4) of Regulation (EU) No 1308/2013 on the common organization of the markets in agricultural products;
  • the imposition, directly or indirectly, of unjustifiably burdensome sales, purchase or other contractual conditions;

and, more generally:

  • the adoption of any further commercial conduct that is unfair even taking into account the complex of commercial relations that characterize the conditions of supply.
  1. The grey list

As seen above, on the other hand, it is possible to escape censure of competitive unfairness for these provisions, if they are included in a clear and determined manner in the contract:

  • the buyer returns unsold agricultural and food products to the supplier, without paying any payment for such unsold products and/or their disposal;
  • the supplier is required to make a payment as a condition for the storage, display, listing or marketing of its products;
  • the buyer requires the supplier to bear the cost of discounts on agricultural and food products sold by the buyer as part of a promotion, with some exceptions;
  • the purchaser requires the supplier to pay the cost of advertising the purchaser's products;
  • the purchaser requires the supplier to pay the costs of the purchaser's marketing of products;
  • the buyer requires the supplier to pay the costs of staff to organise the supplier's product sales space.

Who monitors?

The Authorities in charge of supervising the implementation of the new rules are the newly established Central Inspectorate for the protection of quality and fraud repression of agro-food products (ICQRF), which can act both ex officio and following a complaint (even anonymous) and the Antitrust Authority (AGCM), without prejudice to the possibility for the parties concerned to resort to mediation procedures or alternative dispute resolution mechanisms.

Summing up

The new discipline, effective immediately, deals with both contracts and behaviors of companies active in the agro-food chain in Italy and establishes precise rights and obligations between the parties, subjecting market operators to the inspection and sanctioning power of specific public authorities.

The regulatory provisions do not simply represent yet another novelty for the sector, but are also an opportunity to rethink the relationships between market operators with a view to rewarding transparency, continuity and the enhancement of the supply chain.

It is in full respect of this aim that we are at your disposal to better cope with these aspects, also in terms of sharing strategies to adapt to the new regulations in the face of a possible change in consolidated relationships between your buyers and suppliers. The firm is also available to schedule a training session, if required.

The commercial success of a fashion item does not automatically entail recognition of copyright protection (in the absence of proof of creativity and artistic value)

Legal protection of fashion designers’ creations counts several means: from unfair competition to design protection, shape marks, to the protection offered by copyright law (L. No. 633/1941): these instruments offer different kinds of protection and can be used only if specific requirements are met, which must always prooved.

It is common in this field seeing fashion labels trying to "dress up" their products with a variety of intellectual property titles, registering them, for example, as shape marks or as industrial design, in order to increase the level of protection against possible imitations.

However, although protection by registration of intellectual property rights in the fashion industry is particularly widespread, the temporary nature of the rights conferred by registration may be an obstacle to the protectability of garments or accessories when their commercial success is particularly long-lasting: in these cases, in order to have access to protection extended in time and which goes beyond the formalities required for registration, it is necessary to prove not only the particular liking of the public, but also the creativity and artistic value of the product to aim to copyright protection.

An emblematic case of the possible coexistence of several levels of protection for fashion items and of the difficulties connected to the proof of the creativity and artistic value of a product aiming to be considered as copyrighetd is the one recently dealt with by the Court of Milan.

The case concerned the marketing of bags imitating the famous "Le Pliage" bag by Longchamp, protected by two European Union three-dimensional trademark registrations claiming its peculiar trapezoidal shape, and also characterised by the combination of further original elements, such as the rounded flap, the tubular handles and the contrast in colour and materials between the nylon and leather elements.

The plaintiff claimed that the "Le Pliage" bag model was created in 1993 and has been still marketed worldwide through more than 1,500 sales outlets and also online and requested protection against imitations, invoking not only the protection provided for on the basis of three-dimensional trade mark registrations (pursuant to articles 2 and 20 C.P.I. and art.9 EU Reg. no. 2017/1001), but also the violation of the rights of the author and of the principles protecting fair competition on the market (art. 2598 c.c.).

The Court first of all recognised the infringement of the plaintiff's three-dimensional European trademarks insofar as it was established not only their distinctive capacity due to the manner of use and presentation of the trademark itself and the information and suggestions conveyed through advertising and the perception that the shape determines on the consumer public, but also the taking over, by the imitative bags, of all the distinctive elements of the "Le Pliage" model.

With regard to the invoked copyright protection, referring to its own case law on this point, the judgment ruled that it was not possible to identify in this case the actual existence of the artistic character necessary for the form of the bag to enjoy such protection.

The Judges found that, apart from the undeniable commercial success gained on the market, the plaintiff had not enclosed the elements that should have confirmed the presence of an artistic value in the creation of the external appearance of the bag model in question.

In other words, there was no evidence at all of the requirements of creativity and artistic value which presuppose the applicability of Art. 2.10 of the Copyright Act.

As is well known, artistic value can be inferred from a series of objective parameters, such as the recognition by cultural and institutional circles of the existence of aesthetic and artistic qualities, exposure in exhibitions or museums, publication in specialist magazines, the awarding of prizes, the acquisition of a market value so high as to transcend that linked solely to its functionality or the creation by a well-known artist and, in the absence of evidence, it is not possible to have access to the protection provided for by the law on copyright.

Facebook must compensate the user for the unlawful removal of posts

The Court of Appeal of L'Aquila with the judgment 1659 of November 9, 2021 reconstructs the contractual relationship between the social network and the user who interacts in the community and expresses itself on the scope of freedom of expression of users within the social network.

The plaintiff filed a summary procedure to react to the suspension of his account, for 4 months, by the social network following the publication of some politically motivated posts.

In the first instance, the Court of First Instance sentenced Facebook to pay compensation of 15 thousand euros for moral damages. The present decision concerns the appeal presented by the social network before the Court of Appeal of L'Aquila.

First of all, the Court affirms, in this relationship marked by elements of internationality (intervening between a consumer resident in Italy and a supplier based in Ireland), the jurisdiction of the Italian Judge and the applicability of Italian law to decide the dispute.

It then defines its scope, since it is a contract for adhesion in which the ordinary aspects of contractual responsibility are relevant. It then pauses to analyze the nature of the relationship characterized by onerousness, recalling how free contracts are protected with less force than contracts for consideration (paradigmatic is the difference between donation and sale). The relationship is for consideration in that the patrimonial content of a service can be considered to exist also in those cases in which goods other than money are transferred as consideration for a service which, due to their potential for commercial exploitation, become susceptible to an economic and patrimonial evaluation. It is, in essence, the intrinsic suitability of personal data - legitimately acquired and processed - to be considered, because of the profitable commercial exploitation of the same by the social network.

The Court affirms another interesting principle regarding the clause that provides for the powers of Facebook to remove content and suspend accounts in case of violation of the policies of the social network. The same was considered valid and effective, not being able to be considered vexatious.

The Court finally examined the merits of the case, going to syndicate in concrete powers of Facebook: the work of social must not result in behaviors that violate the freedom of expression that, after granting permission to use their sensitive data and not for free, is the typical content and, so to speak, the raison d'être of the membership of a platform of this type, whose function is precisely to allow users to express themselves and share content that is important to them.

The Court of Appeal therefore deemed illegitimate the suspension of the account, given that "the mere publication of a photo with a comment that is limited to the expression of one's own thoughts (...) is not considered sufficient to violate the standards of the community".

Therefore, the Court ruled that, due to the content posted by the user, Facebook exceeded its censorship power, limiting, however, the compensation for damages in favor of the user to € 3,000, also considering the total number of members of the page that was about 2,500 contacts.

Cookies: the French Privacy Guarantor (the "CNIL") sanctions GOOGLE for a total of 150 million euros and FACEBOOK for 60 million euros for failing to comply with French privacy legislation.

On January 6, following investigations, the CNIL found that the sites facebook.com, google.fr and youtube.com do not allow users to refuse cookies as easily as they accept them. The CNIL thus fined FACEBOOK 60 million euros and GOOGLE 150 million euros and ordered them to comply within three months. The French authority noted, in particular, that the sites facebook.com, google.fr and youtube.com offer a button that allows the user to immediately accept cookies, while they do not provide an equivalent solution (button or other) that allows the user to refuse, in an equally simple way the use of the same cookies. Indeed, the websites under scrutiny by the CNIL provided for several clicks to refuse all cookies and only one click to accept them, thus limiting the freedom of consent, which is provided for as a fundamental element by Art. 82 of the French Privacy Law, as well as by the GDPR. In addition to the payment of the aforementioned penalties, Google and Facebook will have to comply with the CNIL's requirements within 3 months, providing users with a way to reject cookies that is as simple as accepting them. Failing this, companies will have to pay a penalty of 100,000 euros for each day of delay. These two decisions are part of the comprehensive compliance strategy launched by the CNIL over the past two years against French and foreign operators who publish websites with many visits and who engage in practices that are contrary to the legislation on cookies. Since March 31, 2021, when the deadline expired for websites and mobile applications to comply with the new cookie rules, the CNIL has taken nearly 100 corrective measures (orders and sanctions) related to non-compliance with cookie legislation. On the Italian landscape regarding cookies, we point out the Cookies Guidelines published by the Privacy Guarantor and entered into force last January 10, 2022, the details of which are provided, on our Blog

Food retail

The performance of the Food Retail sector in 2021 is showing positive signs even though it is obviously still affected by the negative socio-economic reverberations of the Covid-19 pandemic. During 2020 the health emergency hit hard the whole catering sector which, due to the prolonged and intermittent lock down phases, experienced dramatic moments. In terms of legal assistance and consultancy to the Food Retail sector, 2020 was marked by prolonged negotiation activity aimed at finding a balance between the reasons of the landlords and the requests of the companies for redevelopment of the rent. The result of this activity has been, on average, positive, in terms of reaching balanced agreements on rent revisions, but overall the impact of the pandemic factor has been very severe in terms of a drop in turnover for the entire sector, which has also seen a succession of numerous business closures that have certainly affected mostly, but not only, those companies that had previous problems of capitalization and financial instability already in the pre-covid era. The operators in the sector have, moreover, noted a lack of effectiveness and proportionality of the economic support measures arranged by the Government. In 2021, especially in the second half of the year, despite the persistence of widespread uncertainty regarding short and medium-term economic scenarios, and in conjunction with the beginning of a recovery in companies' cash flows, although certainly not equal to pre-covid levels, encouraging signs were also seen regarding the resumption of development plans. Negotiations were thus more focused on negotiations for new openings, which saw a cautious revival of initiatives to acquire commercial premises and other retail locations. On the other hand, even the obvious and in some cases favorable opportunities offered by the market are often approached with a certain degree of caution, determined by the awareness that the period of emergency is far from over. As far as the target of the positioning is concerned, there is a clear predisposition to search for locations equipped with large outdoor dehors, due to the changed habits of customers who certainly prefer an offer with characteristics of greater outdoor livability. On the other hand, a possible obstacle to development is the chronic lack of qualified personnel.

SUPER GREEN PASS: what happens if the area where I live changes color?

The Super Green Pass has become mandatory with effect from 6th December 2021, but what is it?

The Super Green Pass, that you have been hearing about for a while consists of the Covid-19 green certification obtained only with vaccination or with the recovery from the SARS-COV-2 Virus, remaining excluded the certification obtained after the negative result of the antigenic swab (the so called rapid swab). As for the validity of the Super Green Pass, it has already changed more than once: from the November DL (no. 172/2021) to the December DL (no. 221/2021) it went from a duration of 12 to 9 months and then decreased further. In fact, from February 1, 2022 the duration of the vaccine Super Green Pass is reduced from 9 to 6 months. While waiting for all the changes that will take place until the end of the state of emergency - set for March 31, 2022 - and even after the end of the state of emergency, it seems appropriate to point out what changes if the zones switch, now known, white, yellow, orange and red.

• WHITE ZONE

All activities are open, there are no restrictions on travel. You need the basic Green Pass to:

  1. take public transportation, trains and planes;
  2. go to the gym and swimming pool;
  3. go to the hotel and to the attached restaurants;
  4. use the ski facilities.

You need a Super Green Pass to:

  1. go to an indoor restaurant;
  2. go to the movies and theater;
  3. go to the stadium;
  4. attend parties and public functions.
  • YELLOW ZONE
  1. Outdoor mask requirement.
  2. In indoor bars and restaurants, you can consume meals only if you have a Super Green Pass.
  • ORANGE ZONE
  1. You can not leave the municipality of residence, if not for reasons of work, necessity and urgency.
  2. All activities remain open but many will be accessible only with Super Green Pass.

With the Super Green Pass:

  1. you can move freely, even outside your region;
  2. you can go to bars and restaurants, to the gym and indoor swimming pools, to the cinema and the theater;
  3. you can enter fairs and conventions, amusement parks, ski resorts and spas.
  • RED ZONE
  1. You can not leave the municipality of residence if not for reasons of work, necessity, urgency.
  2. Restaurants and bars are closed, but it is allowed the takeaway and home delivery.
  3. Stores closed except supermarkets, grocery stores, newsstands, tobacco shops, pharmacies and those with Ateco code allowed. The bans also extend to those who own the Super Green Pass. *

Finally, the latest news in terms of Super Green Pass are as follows:

  • from January 10, 2022: Super Green Pass requirement for: all public transportation; outdoor food services; indoor and outdoor swimming pools; gyms; spas and amusement parks; museums; hotels and accommodations; parties resulting from civil or religious ceremonies (such as baptisms or weddings); festivals and fairs; congresses; ski facilities; team sports including outdoor (e.g. soccer); game rooms, bingo halls and casinos;
  • from February 15, 2022: mandatory Super Green Pass for all workers (public and private) and professionals aged 50 years or older. Those who are not yet vaccinated will need to get their first dose of the vaccine by January 31, 2022 to get a Super Green Pass valid starting February 15, 2022.

Please refer to the reading of a useful and explanatory table of which, for convenience, is attached below the link:

https://www.governo.it/sites/governo.it/files/documenti/documenti/Notizie-allegati/tabella_attivita_consentite.pdf

Clovers Alert! Is your website compliant with the new regulations that will enter into force on January 10, 2022?

Below we analyze the new guidelines on cookies of the Privacy Guarantor

  1. Guidelines on the use of Cookies and other tracking tools

With Measure no. 231 of June 10, 2021, published in the Official Gazette no. 163 of July 9, 2021, the Privacy Guarantor has provided its guidelines to

a) indicate to website operators the rules to be applied for the use of cookies and other tracking tools and

b) to specify the correct procedures for providing information and acquiring the consent of those concerned (the "Guidelines").

The Guidelines therefore aim to supplement the previous indications of the Privacy Guarantor (Measure no. 229 of 2014) by specifying that the manifestation of will of the interested party is "unequivocal" as well as free and informed and by requiring that data protection is ensured by design and through default settings (privacy by default and by design).

  1. What needs to be done from 10 January?

The following is a summary of the obligations set out in the Guidelines, with particular reference to the methods of acquiring consent and the characteristics of the Cookies disclosure.

a) The acquisition of consent

First, the Guarantor reiterates that are not allowed, as forms of acquisition of consent, the practices:

  • of the so-called "scrolling" (i.e., the downward movement of the cursor), which can be qualified as a positive action suitable to unequivocally manifest the will to give consent to the treatment, subject to exceptions to be seen case by case;
  • the so-called "cookie wall", i.e. a binding mechanism (so-called take it or leave it) in which the user is obliged, in order to access the site, to express his/her consent to the reception of cookies or other tracking tools, except for exceptions to be evaluated on a case-by-case basis.

From an operational perspective, the Guarantor requires the following characteristics to validly acquire the consent of the surfer:

  • at the time of a user's first access to the website, no cookies or other tools other than technical ones will be placed inside the device and no active or passive tracking techniques will be used;
  • at the first access to the web page, an area or a banner will appear of adequate size and such as not to induce the user to make unwanted choices;
  • such banner will have to allow the user to express his consent, through a positive action;
  • it is therefore necessary to allow the user to maintain the default settings and to continue browsing without giving any consent, by clicking on the command to close the banner marked by an "X" positioned at the top and on the right inside the banner;
  • it is necessary to insert (besides the link to the complete informative report) a minimum informative report relative to the use of technical cookies and - previous consent, in order to send advertising messages or to supply the service in a personalized way - of profiling cookies or other tracing instruments;
  • there will also be a command through which it is possible to express one's consent by accepting the placement of all cookies or the use of any other tracking tools and the link to a further dedicated area in which it is possible to select the functions, the so-called third parties and the cookies to the use of which the user chooses to consent.

The Guarantor also states that the banner will not have to be re-presented at each new access and that the user's choice must be duly recorded and no longer solicited for at least 6 months, unless significant changes in the conditions of treatment.

b) The informative report

The Cookies informative report will have to indicate the recipients of the personal data collected and the storage time of the acquired data and can also be made on more than one channel and with different modalities (for example, with pop-ups, videos, vocal interactions). If only technical cookies are used, the Cookies policy may be included in the general policy. The Guarantor then recommends that analytics cookies, used to assess the effectiveness of a service, be used only for statistical purposes.

The above is the general framework of the guidelines of the Privacy Guarantor that - with proper legal support - should be implemented on each website.

On the evidence of use of the trademark in nullity and opposition proceedings

Not everyone knows that once a trademark has been filed and registered, it must be put into effective use by its owner: the law - both national and European - provides for an initial grace period of five years from registration, after which the owner may be required to prove the effective use of his trademark.

Evidence of use can be requested both in opposition proceedings by the trademark applicant and in opposition proceedings by the trademark applicant, with the consequence that in the absence of useful evidence, the opposition is automatically rejected.

Similarly, the evidence of use of the trademark could be requested in the framework of a revocation procedure for non-use provided for at Community level by articles 18 and 58 European Union Trademark Regulation, EU 2017/1001. Also in this case the consequences are far from trivial for the trademark owner, since if the administrative judge considers the evidence insufficient, the trademark would be declared null and void as of the date of the request for revocation and therefore cancelled from the register.

Therefore, the use of the trademark is fundamental even in all cases in which the trademark is registered: it is not sufficient to have registered the trademark in a series of product classes in order to ensure the widest possible protection, if this registration does not correspond to a genuine use of the trademark within the terms of the law.

It is therefore particularly important for the owner to collect proof of use over time, especially once the five-year grace period has expired.

It is also very important to know what evidence of use is relevant to the administrative judge.

One of the most important pieces of evidence of use are sales invoices.

As repeatedly stated by the courts such invoices must show significant and frequent volumes of sales during the relevant period (five years prior to the application for nullity or, in opposition proceedings, from the time of publication).

It should be noted that offers to sell products bearing the contested trademark on websites are not sufficient in themselves to demonstrate actual use, at most they may be relevant together with other elements such as, for example, the production of supporting documents, packaging, labels, price lists, catalogs, invoices, photographs, newspaper advertisements.

On this point, the EU Court of First Instance recently expressed its opinion in case T-1/20 of October 13, 2021, rejecting the appeal of the company Mi Indutries Inc., a manufacturer of organic pet foods, confirming the decision of the Board of Appeal of the EUIPO, which had held that the extracts from the Internet site "Amazon.co.uk" where the goods bearing the contested trademark were put up for sale simply showed that the goods in question had been put up for sale, without however proving that they had actually been sold and without providing any information on the volume of any sales.

According to the case-law, the actual use of a trademark cannot be proven by probability or presumption, but must be based on concrete and objective elements that demonstrate the actual and sufficient use of the trademark in the market concerned.

According to the Implementing Regulations, furthermore, the evidence of use must cover the place, duration, extent and nature of the use that has been made of the contested trademark. It is also essential that the evidence covers the relevant five-year period: further evidence outside this period will only be considered secondarily.

Furthermore, the condition relating to the actual use of the trademark requires that it, as protected in the relevant territory, be used publicly and externally. In this respect, the Court made it clear that not only sales to final consumers but also to industrial customers and professional users (B2B sales) are relevant.

Finally, the Court pointed out that even if it is not necessary for the owner to prove constant and significant use over the entire five-year period in order to escape sanctions, the obvious absence of evidence for a significant part of the period means that the use is considered insufficient.

  • Intellectual Property

Shareholders' loans: related risks and instructions for use

Some of the most important legal profiles and practical aspects linked to the loans made by shareholders in favor of the companies they own, in the light of the widespread use of this instrument, have often led to critical issues, that have not been adequately assessed ex ante, as well as the emergence of controversial topics. This is even though the legislator and the case law have tried, over the years, to provide a partial regulation and an interpretation of the matter that is as much as possible straightforward and in line with practice.

Article 2467 of the Italian Civil Code - which provides the express subordination of these credits deriving from financing with respect to the repayment by the company of the credits claimed for different reasons by other creditors - addresses, in fact, the problem of their qualification with the awareness that, even though the fact that in many cases they appear, in the form and intentions of the lending shareholder, as loan capital disbursements (therefore subject to a theoretical obligation of restitution by the borrower), in substance, however, they must be more correctly framed as contributions of risk capital because they have been made in moments of the company life when it would have been reasonable to expect the contribution of risk capital.

However, the same rule has not been sufficiently precise in identifying in which precise moment the existence of the conditions of "excessive imbalance of indebtedness with respect to the shareholders' equity" or of "financial situation of the company in which a contribution would have been reasonable" must occur for the functionality of the subordination mechanism, and the case law has therefore intervened in this grey zone, clarifying, in brief, that "the company is obliged to refuse the shareholder the reimbursement of the loan, in the presence of the indicated situation, where existing at the time of the financing arrangement of the loan and at the time of the request for reimbursement" as well as "until the Court decision, since it is condition of non-performing of the loan” (in this sense Court of Cassation 12944/2019 and, inter alia, Court of Milan July 9, 2021, Court of Milan October 21, 2020, Court of Rome February 6, 2017 and Court of Milan June 13, 2016).

The aforementioned rule, the case lax interpretations provided over time and the particular nature of the these loans raise therefore concrete critical issues to be taken into due consideration when assessing whether or not carrying out the financing and which are the costs and benefits for the granting shareholder.

The issue and the related risks must therefore be carefully considered by the shareholder, understanding that, in order to avoid or, at least, mitigate the risk of subordination with respect to the other company creditors, it is not only relevant the time at which the loan was granted, but also every possible subsequent change in the company's equity and financial situation in relation to the punctual or untimely repayment of the loan. Up to the possible total loss of the conferred capital in the event that the beneficiary company should not recover from the phase of supervening financial difficulty.

A further issue to be considered is the need to agree with the beneficiary company the methods and terms of repayment of the loan provided through the signing of a detailed agreement.

From an operational point of view, when carrying out a loan in favor of an owned company, it is advisable to proceed with the necessary cautions, especially if the shareholder is not authorized, as director and legal representative of the beneficiary company, to independently arrange the repayment of the loan in his capacity.

Such cautions should consist of:

  • in the adequate prior understanding of the economic-legal assumptions for the application of subordination, briefly discussed here;

  • in the execution of specific loan agreements between the shareholder and the company where the possible interest rate applied (in the case of interest-bearing loan) and, above all, the terms, conditions, methods and timing of repayment of the loan by the lending shareholder are expressly provided for.

In other words, it is not sufficient to make a simple bank transfer in favor of the company (as very often happens in practice), even if with a detailed reason of the transfer indicated, as well as it is extremely risky not to agree on a specific repayment term. In fact, in case of failure to provide for such a term and in case of failure to reach an agreement with the beneficiary company, the lending shareholder, in the event of a dispute, will have to take proceedings against the company in order to request the judicial establishment of a term for the repayment of the loan pursuant to article 1817 of the Italian Civil Code (a rule that is often not adequately taken into consideration).

Publishing other company’s customer portfolio on another company’s one amounts to unfair competition, Supreme Court says

Gaia Bellomo - Senior AssociateMaria Sole Torno - Stagista

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

Is a pay-off (or slogan) registrable as a trademark?

Very often we are asked to register as a trademark a certain slogan (pay-off) and the answer is often not so obvious.

When we talk about pay-off in this field, we immediately think of the well-known “JUST DO IT” by Nike - which has over one hundred registrations worldwide - or the equally well-known "I'm lovin it" by McDonald's - which has also been registered by the American multinational worldwide.

However, the pay-off is not always registrable as a trademark, even though other forms of protection, alternative and different from the registration, are possible.

Recently, for example, the Court of the EU with the sentence of 30 June 2021 has rejected on appeal the application for registration of the figurative trademark

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by an Italian company manufacturing bathroom products, specifically for "flushing cisterns for WCs; toilet [WC] cups; water distribution systems."

Prior to this, other decisions at the European level, and not only, had also denied the registrability of certain slogans, noting their lack of distinctiveness: among them, the judgment of the EU General Court 30/04/2015 (joined cases T-707/13 and T-709/13) on the word mark "BE HAPPY" for stationery, giftware (cups and kitchenware) and toys.

Despite the fanciful and original character of the sign, the Community judges denied that the latter could perform the typical and main function of the mark, namely that of indicating the entrepreneurial source of the product or service to which it refers.

Similarly, in its judgment of March 9, 2017, in Puma/EUIPO, T 104/16, the General Court had denied the registrability of the Forever Faster sign for footwear and sporting goods, holding that the trademark would be perceived by the relevant public "as a mere laudatory formula or information about the desired qualities and purpose of the goods in question."

Otherwise, however, there are other precedents that have instead approved the registration of pay-off apparently not very dissimilar to the others just seen. Thus, the Sentence of the EU Court of Justice of 21.1.2010 handed down in judgment C-398/08 P (Audi AG) considered Audi's pay-off "vorsprung durch technik" ["Forward thanks to technology"] as registrable as a figurative trademark.

Audi.jpg

In this case, according to the General Court, "even assuming that the slogan 'Vorsprung durch Technik' conveys an objective message, according to which technological superiority enables the manufacture and supply of better goods and services, this circumstance does not allow the conclusion that the mark applied for is entirely devoid of inherent distinctiveness". The same judgment states: "All marks consisting of signs or indications which are also used as advertising slogans, indications of quality or expressions inciting the purchase of the goods or services designated by such marks convey by definition, to a greater or lesser extent, an objective message. Such a situation may in particular arise when these marks are not reduced to an ordinary advertising message, but possess a certain originality or richness of meaning, require a minimum of interpretative effort or trigger a cognitive process in the relevant public.

So how can we distinguish between registrable and non-registrable slogans?

The EUIPO, on the basis of the case law produced in recent years, has made available a series of guidelines (available on the site https://guidelines.euipo.europa.eu/1922901/1802830/direttive-di-marchi/4-slogan--valutazione-del-carattere-distintivo) useful for identifying when the slogan has not only an advertising value but also a distinctive character:

"It is possible for an advertising slogan to be distinctive whenever it is considered more than a simple advertising message extolling the qualities of the goods or services in question, in that:

  • constitutes a play on words and/or
  • introduces elements of conceptual intrigue or surprise, so that it can be perceived as an imaginative, surprising or unexpected sign, and/or
  • has some particular originality or resonance, and/or
  • triggers in the mind of the target audience a cognitive process or requires an interpretive effort. In addition to the above, the following characteristics of a slogan can contribute so that its distinctiveness can be recognized:
  • unusual syntactic structures
  • the use of linguistic and stylistic devices, such as alliteration, metaphors, rhyme, paradox, etc.

In the light of these guidelines and the recent judgment of the European Court of Justice on the “GO CLEAN” trademark, the picture seems to be clearer: without prejudice to the function of origin indicator that the trademark must have, this can also be fulfilled through an advertising slogan if the same is not reduced to a "simple laudatory formula". The trademark must therefore, first of all, indicate to the public the provenance of a product or service from a certain entrepreneurial source. Secondly, the trademark undoubtedly also has an advertising function. But when does the distinctive function of the trademark persist despite its distinctly advertising character? Clearer than the precedents cited above, appears the latest decision of the Tribunal according to which:

"41 - It is in fact sufficient, in order to establish the absence of distinctive character, to note that the contested mark indicates to the consumer a characteristic of the product relating to its commercial value which, without being precise, derives from information of a promotional or advertising nature which the relevant public will primarily perceive as such, rather than as an indication of the commercial origin of the goods. 42 - Well, in the present case, the relevant public will not need to make any interpretative effort to understand the phrase "go clean" as an expression that incites to purchase and that emphasizes the attractiveness of the products in question, addressing directly to consumers and inviting them to buy products that offer them greater cleanliness and better hygiene".

It could be said, therefore, that when the slogan is not trivial and obvious but imposes on the consumer a certain interpretative effort in order to grasp its meaning, it is a candidate to be accepted as a trademark.

It is good to remember that a fundamental parameter to evaluate the distinctive character of a sign is the "relevant public".

Therefore, a slogan can be registered as a trademark if it has sufficient distinctive character and is perceived by the relevant public as a sign indicating the entrepreneurial origin of a product or service and not just a laudatory expression or a simple promotional message: "31 Such a trademark must be considered devoid of distinctive character if it is capable of being perceived by the reference public only as a simple promotional formula".

A suggestion could be that of not immediately filing a slogan, but to wait until it has acquired a certain diffusion and fame among the public, a so-called secondary meaning, which makes it immediately reconnectable to a certain product (rectius: to a certain entrepreneurial source).

In this case, in fact, the distinctive function of the trademark is "saved" because it is guaranteed by the so-called secondary meaning.

Prohibition of competition in the transfer of a company: silence can cost you dearly

Mattia Raffaelli – Of Counsel Sofia Mercedes Bovoli– Trainee

Mattia Raffaelli – Of Counsel

Sofia Mercedes Bovoli– Trainee

An important provision that must be taken into consideration when preparing for the transfer of a company, a company branch or, in any case, an operation similar/comparable to the same, is art. 2557 of the Civil Code concerning competition.

Art. 2557 of the Civil Code sanctions, for the specific protection of the purchaser of a company, the prohibition for the transferor, following the completion of the operation, to conduct competitive activities, for a maximum period of five years from the transfer. Therefore, as a natural and automatic effect of the transfer, whoever proceeds to the alienation of a company will have to refrain from starting a new business which, due to its object, location or other circumstances, is likely to divert the customers of the transferred company.

There are two issues that need to be highlighted: on the one hand, the automatic application of the prohibition and, on the other, the extensive force and analogical application of the same.

Analyzing by points:

(a) The automatic application of the prohibition: the prohibition of competition is placed by the legislator as a natural effect of the business transfer, underlying the social economic function of the transaction itself. Therefore, in the silence of the parties, this prohibition will unfold its effects independently of an explicit will in this sense. Consequently, unless otherwise provided for, the prohibition will automatically apply within the limits and under the conditions imposed by the legislator.

However, the parties are allowed to derogate from the non-competition clause either by weakening or strengthening it. First of all, with regard to its duration, it is possible to provide for a duration shorter than the 5 years provided for by the legislator, but never longer, in order to protect the private initiative of the assignor. In addition, the scope of application of the prohibition can be limited from the point of view of object or location and therefore the assignor can be prevented from exercising the activity in competition only in a delimited territory and for specific activities. On the contrary, in a specularly opposite manner, it is possible to envisage limits that extend the effectiveness of the regulatory provision, extending the object of the prohibition to further activities with respect to those already exercised through the transferred company. In any case, any "worsening" derogations imposed on the transferor cannot be such as to effectively prevent him from carrying out of any professional activity.

b) Extensive force and analogical application of the provision: The Supreme Court has, on more than one occasion, reiterated the non-exceptional nature of the prohibition and has, therefore, acknowledged, on several occasions, the analogical application of article 2557 of the Civil Code. Consequently, it seems appropriate to identify the cases and the operations assimilated to the transfer of a company to which it is possible to extend this prohibition.

Doctrine and jurisprudence agree in considering possible the analogical application of the prohibition to all the hypotheses in which, in substance, operations similar and analogous to the transfer of a company or a branch of it are carried out. Jurisprudence has recognized the automatic application of the prohibition also in the case of the transfer of majority shareholdings in a company. Moreover, the violation of this prohibition would take place both in the event that the transferring shareholders set up a new company with the same corporate purpose as the one transferred and in the event that they take on the role of directors in a competing company. The need to protect the transferee is always the same, consider, for example, the possibility of diversion of clients deriving from the taking over of the management of a subject who, being known to the clientele, of which he knows the tendencies and habits, may have a considerable capacity to attract them. Therefore, in order to evaluate the possible analogical application of the provisions of art. 2557 Civil Code, also because of its automatic application, it is necessary to evaluate case by case the underlying will of the parties and the economic result they intend to pursue with a certain operation. In fact, not infrequently, the choice between transferring a company or a shareholding is mainly determined by reasons of fiscal opportunity or limitation of the transferee's responsibilities.

It should be pointed out that violation of the non-competition clause governed by art. 2557 of the Civil Code would entitle the transferee to request

a) termination due to breach of contract.

b) compensation for the damage suffered and incurred as a result of the violation (equal, for example, to the loss of earnings or the reduction in the value of the company due to the diversion of customers);

c) the inhibition, as a precautionary measure, of the illicit conduct pursuant to art. 700 c.p.c..

In conclusion, taking into account the automatic effect of the regulations analyzed here, when we are about to undertake operations that in fact realize a substitution of one subject for another in the running of the company and in the exercise of a given activity, it is necessary, in order to avoid incurring unpleasant surprises, to move accordingly, regulating the application and scope of the prohibition.

Registered design protection prevails on unfair competition and look alike provisions (absent robust evidence)

The market for plant care products is shared by companies facing each other on the shelves of few specialized b2c shops like garden centers and nurseries, which mainly offer products for sale by type and allocate them in contiguous spaces.

To distinguish its products from those of its competitors, Vigorplant, a company which produces and markets potting soils and fertilizers, launched in 2019 a new range of five potting soils, characterized by packaging with a different color per product type and a new top-of-the-line product.

These packagings featured a peculiar division into two parts of the bag and the placement of three pictograms, exemplifying the performance of the product, in a specific area, in addition to the choice of a single color for each potting soil that it contained.

The top-of-the-line potting soil, had, its own packaging, colored with iridescent blue and was also registered as a simple design.

Shortly after the launch of this packaging, Vigorplant found on the market the products of a competitor, Tercomposti S.p.A., presented in packs that reproduced not only Vigorplant classification by color and its reference products’s stylized representation, but also the same pictograms placed in the same position as those on Vigorplant's packaging.

Sensing a threat of jeopardization of the commercial success of its new potting soils, Vigorplant applied for a PI injunction and seizure against Tercomposti's packaging, acting against slavish imitation and look-alike (under Art. 2598 of the Italian Civil Code) and, with specific reference to the packaging of the top-of-the-line potting soil, enforcing its registered design (pursuant to Art. 31 of the Italian Civil Code).

In examining the fumus boni iuris requirement, the Court took position on the infringement of the registered design, establishing that the enforced registration met all the requirements for validity set out in Articles 32 - 33 bis of the Industrial Property Code, namely: lawfulness, novelty and individual character. With specific reference to the latter requirement - despite the fact that it is not possible to claim exclusivity regarding those elements depicted on the packaging such as flowers, the earth, informative pictograms and the color blue - the general appearance of the bag was deemed to be well characterized by the specific arrangement of the above mentioned elements and by the predominance of the color blue with an iridescent effect, characteristics which were deemed not to be present in other products launched on the market prior to registration but, on the contrary, could be found in the Tercomposti bags, which created the same overall impression as Vigorplant's one.

Not differing sufficiently from the Vigorplant packaging design, the Court held that Tercomposti’s bags were infringing the claimant’s exclusive rights and granted an injunction, backed by penalty, against the latter with reference only to the product named “Superterriccio”.

The other bags by Tercomposti were not, however, deemed to be in breach of Vigorplant's packaging, as they diverged more from the overall impression created by the registered design.

From the unfair competition’s standpoint, the Court found that the claims of parasiticity and slavish imitation had not been supported by sufficient evidence: according to the Court, Vigorplant should have highlighted all the elements that could prove the distinctiveness of its packaging.

In the same way, the decorative elements with different colors and layout on Tercomposti packaging were deemed not to illicitly hooking to Vigorplant’s ones in a way apt to create that link between the two products which case law qualifies as look alike (i.e. taking over the characteristics of a well-known product).

Regard synchronic parasitic competition (which takes the form of the simultaneous resumption of all or many of a competitor's products), the Court held that there was not an overall resumption of Vigorplant's commercial proposals by Tercomposti.

In view of the findings of this case, it is clear that an action for unfair competition, in all its forms (parasitic, slavish imitation, tying) must always be supported by robust evidence to substantiate the claim.

Court of Milan, order of 4 May 2021

Repayment of provincial additional tax on excise duties on electricity paid in 2010 and 2011: last call for "final consumers”?

Until December 2012, electricity suppliers automatically charged end-users in their bills the provincial additional tax on excise duties on electricity, for an amount that varied according to the province of supply. However, in 2011, the Court of Justice of the European Union declared the incompatibility between the European legislation and the Italian legislation that had established the additional provincial tax on excise duties and, consequently, the latter was repealed in Italy with effect from 1 December 2012.

This gave rise to an extensive and troubled strand of litigation that culminated in 2019, when the Supreme Court of Cassation – with several pronouncements quite similar to each other – ruled few cases in which end-user companies had generally acted against the Italian Customs and Monopolies Agency to request the reimbursement of the excise duties paid. In these decisions, the Supreme Court addressed and resolved two specific issues: (i) the incompatibility of national regulations on excise duties with EU legislation and (ii) the consequent possible reimbursement to the user of additional taxes unduly collected.

In particular, the Supreme Court expressed the following principles: 1) the party obliged to pay excise duties to the Customs and Monopolies Agency is solely the electricity supplier; 2) the supplier may charge the excise duties paid to the final consumer in full; 3) the relationship between the supplier and the customs authorities on one hand, and the supplier and the final consumer on the other one, are autonomous and do not interfere with each other; 4) as result of the aforementioned autonomy, the final consumer - even in the event of the tax being charged by the supplier - is not entitled to request reimbursement of the excise duties unduly paid directly to the Customs and Monopolies Agency; 5) the right to claim for reimbursement to the Customs and Monopolies Agency is recognized solely to the electricity supplier, who may exceptionally exercise it: a. in the event that he has not charged the tax to the final consumer, within two years from the date of payment (which becomes the starting point for the limitation period of the right to request reimbursement); b. in the event that the final consumer has successfully brought legal action against him to recover undue payments, within ninety days of the related decision becoming res judicata; 6) in the event that excise duties and surtaxes are charged to the final consumer, the latter may bring a civil action to recover undue payments directly against the electricity supplier.

The above-mentioned rulings of the Supreme Court of Cassation have, therefore, recognized the unequivocal right of the final consumer, who has a direct relationship of a private nature with the electricity service provider, to take civil action exclusively against the electricity suppliers in order to ascertain the undue payment made as provincial surcharge on the excise tax on electricity in the 2010-2011 reference period and thus request the full reimbursement.

It has also indirectly emerged that it is substantially impossible for the electricity suppliers to reach a settlement agreement with the final consumer, either out of court or in court, as the former in turn may only exercise their right to claim reimbursement against the Customs and Monopolies Agency only in the event that the final consumer has successfully exercised legal action to recover undue payments and within ninety days of the related judgement becoming final (i.e. res jucicata). This implies that the final consumer, although his right to do so has been clearly recognized, will be able to obtain reimbursement of the excise duties and surcharges unduly paid to his electricity supplier in the two-year period in question (2010-2011) only by successfully bring the related legal action.

This was followed, at the end of 2020, by the first significant judgments of merit (Court of Milan and Court of Mantua) where, accepting in full the claims for reimbursement of undue payments pursuant to art. 2033 of the Italian Civil Code made by end-consumer companies against the electricity suppliers, the Courts consequently ordered the electricity supplier to return to the plaintiff companies the amounts paid as additional excise duties in 2010 and 2011.

Having ascertained the right to the reimbursement of the additional taxes unduly paid, it is now burden of end-user companies, before being able to start the eventual judicial procedure for reimbursement, to take the necessary legal steps required to promptly and correctly interrupt the running of the limitation period for the action for recovery of undue payments, which is equal to 10 years. After this term, in fact, every claim and right of the final consumer against the electricity suppliers will be definitively prejudiced. Therefore, for those who have not interrupted the limitation period for 2010, there is still the possibility to do so at least for 2011.

The Court of Justice considers valid the Trademark for the Shape of a single Groove of a Tire (Yokohama Rubber vs Pirelli Tyre)

A few days ago, the European Court of Justice ("ECJ") issued a decision by which it rejected the invalidity action brought by the tire manufacturer Yokohama against the trademark application filed by Pirelli to protect a mere part of the tread of a tire as a trademark.

With this decision, the ECJ reformed an earlier ruling of the EUIPO Appellate Division, which had held that the design of a part of the tread did not in itself constitute a valid trademark in relation to class n. 12 of the Nice Classification because the groove performed a merely technical and non-distinctive function. However, in 2018, the ECJ overturned this decision and upheld the registration of the disputed mark specifically for these goods as well.

Yokohama appealed this decision before the European Court of Justice, which has now issued a final decision in this dispute (EU:C:2021:431). The European Trademark Office (EUIPO) and the European Association of Trademark Owners of the United Kingdom have also intervened in the case.

As in the previous cases, the possible technical function of a part of the Pirelli tread was once again the subject of discussion before the ECJ. Formally, both Yokohama and EUIPO claimed infringement of Article 7(1)(e)(ii) of Regulation 40/94 in the 2018 judgment of the CFI that was later appealed.

According to the ECJ, the CFI erred in holding that a single groove in a tire, which constituted the contested mark, was not in itself capable of performing a technical function within the meaning of Article 7(1)(e)(ii) of Regulation 40/94 because the groove appeared in a tire tread in combination with other elements.

Contrary to the appellant's view, the Court of First Instance had not ruled out the possibility that Article 7( 1)(e)(ii) of Regulation No. 40/94 might apply to a sign whose shape is necessary to obtain a technical result which contributes to the functioning of a product, even if that shape is not in itself sufficient to obtain the intended technical result of that product. The ECJ added that, on the contrary, the Court of First Instance had found that the evidence presented by Yokohama before the EUIPO did not show that a single groove of a shape identical to that represented by the mark at issue could achieve the technical result assumed in the contested decision.

In essence, the Court upheld the General Court's assessment by which the contested mark does not represent a tread pattern and therefore does not consist exclusively of the shape of the goods in question (namely tires) within the meaning of Article 7(e)(ii) of Regulation (EC) No. 40/94. It represents at most a single groove of a tire tread and not a tire tread, since it does not incorporate the other elements of a tire tread.