The IP Court of Milan Rules on Interim Non-infringement Proceedings

A relatively recent decision issued by the Milan IP Court (July 27, 2013, Judge Giani) offers interesting insights on the subject of interim, “pre-emptive” actions for a declaration of non-infringement, brought by potential infringers.

It is perhaps worth mentioning that the admissibility of an action for a negative declaration by way of interim proceedings was still controversial in the Italian legal system until a few years ago. In 2010, however, the Italian IP Code was amended to expressly provide for such actions, albeit quite obliquely, i.e. by inserting a new paragraph 6-bis under Article 120 that formally deals with issues of jurisdiction and venue.

In the case discussed here, the applicant was the Milanese agent of a company based in Central Italy, manufacturing refrigerated display counters. The latter had been involved in intellectual property litigation with a third party claiming that several products of the manufacturer’s line infringed a registered design. Two separate proceedings had been instituted and reciprocal claims of nullity and infringement filed. One of these proceedings had already ended in the first instance with a positive finding of infringement for some of the products involved.

The manufacturer had at this point invited its Milanese agent to suspend the sale of the allegedly infringing products. The agent company had reacted (it is not known if the strategy was actually agreed with the manufacturing company) by opening a third judicial front in Milan against the registered design owner, specifically by seeking a provisional declaration of non-infringement by way of urgent proceedings.

The Milan Judge, however, dismissed the action for several concurring reasons.

First, the Judge held she had no territorial jurisdiction to hear the case, noting that neither the respondent resided in the territory subject to the jurisdiction of the Milan IP Court, nor there was evidence that the products, for which a provisional declaration of non-infringement was sought, were being marketed in the same area.

The latter remark is interesting for what it says by contrary: had there been the conditions, the Judge would have applied the forum commissi delicti criterion to establish her jurisdiction in a negative declaration action. This is yet another consequence of paragraph 6-bis added in 2010 to Article 120 of the IP Code, which expressly provides for the application of ordinary rules on (national) jurisdiction to negative actions, once again ending a debate that has been going on for years among Italian scholars (and echoing the specular debate on international jurisdiction that has kept the ECJ busy in the last few years in respect of Article 5.3 of EC Regulation 44/2001).

Second, the Judge held that the applicant lacked actual interest in seeking a non-infringement declaration, noting that the registered design owner had not sent any cease and desist letter or taken any other specific action against the applicant. The Judge, in other words, embraced a strict notion of “interest to act”, echoing the one applied in ordinary declaratory judgments, where it is required that the rights in suit be actually disputed between the parties.

The absence of such an actual dispute also negatively affected, in the Judge’s view, the prerequisite of periculum in mora, or danger of irreparable harm, which is one of the cornerstones of interim proceedings in the Italian legal system.

Both these two last findings seem consistent with the case-law so far generated on interim non-infringement actions following the 2010 reform of the IP Code.

Thirdly, according to Judge Giani, the action was barred by the rules on lis pendens. In this regard, she pointed out that earlier nullity and infringement proceedings concerning the same design and the same products at issue before her were pending before other IP courts. She noted that a final finding of nullity in any of those proceedings would be effective erga omnes under Article 123 of the Italian IP Code, while a finding of infringement, on the other hand, would specifically be effective against any agent of the infringer. All in all, these judgments had the potential to affect the legal position of the agent company and thus there existed a risk of conflict of res judicata if the non-infringement action was left to continue.

The motion was thus dismissed, and the applicant ordered to pay legal expenses.

The impression derived from the order commented here, and other decisions of the Milan Court in the same fashion, is that, if it is true that Italian IP Courts have now to deal with the fact that interim negative declarations may in principle be sought before them, most certainly do not encourage them, and will be particularly rigorous in assessing their requirements.