The Court of Milan on territorial jurisdiction and unfair competition in a case concerning pharmaceutical products
By judgment no. 9086/2014 of 26 June 2014, Business Chamber “A” of the Court of Milan addressed some interesting issues regarding territorial jurisdiction and unfair competition.
The dispute arose from a hypothesis of interference between trademarks: the plaintiff, a pharmaceutical company and owner of the trademark “Inofert” had brought proceedings against the defendant, a competitor, because of its subsequent use and registration of the trademark “Chirofert” for similar (pharmaceutical) products.
In the decision under review, the Court first declared its lack of jurisdiction in relation to the plaintiff’s request for the declaration of invalidity of the defendant’s trademark. The judges noted that, pursuant to Article 120(3) of the Legislative Decree 30/2005 (Intellectual Property Code, “IPC”), the domicile indicated in the application for registration of the trademark and entered in the register “shall be regarded as an election of exclusive domicile for the purposes of determining the jurisdiction”. In the present case, the defendant had chosen domicile in Catania, the jurisdiction of which belonged to the court of that city. The judges stated that it was not possible to affirm that the Milanese court, where competent to rule on the counterfeiting, could also decide the question of the invalidity of the trademark: in fact, such possibility only exists when the request for invalidity is proposed by way of counter-claim, and not by way of original claim as in the present case.
Concerning the jurisdiction over counterfeiting, the court made a further clarification, evidently linked to the fact that the defendant, the pharmaceutical company, did not market the products directly in Milanese territory, but that the marketing was done by a third party (presumably a local pharmacy) which, however, had not been sued: “in the situation such as the one at issue, in which the entrepreneur who sold the products directly has not been sued (thus, making the provision on jurisdiction in case of the joinder of parties, set forth in Article 33 of the Code of Civil Procedure, inapplicable), the manufacturer of the products cannot be sued at the place where the products are sold when it is not directly involved in the activity of that place”. This conclusion, which is in line with the majority of the case law, differs from a precedent set by the Court of Turin on 7 April 2011 which, dealing with medicines and in the light of their particular form of marketing, affirmed the possibility of suing the manufacturer of a medicine at the place of marketing, even without suing the pharmacy responsible for the sale.
Having excluded the court’s jurisdiction to decide the above-mentioned questions, the Judges instead affirmed its jurisdiction in deciding the question of unfair competition, since the defendant’s products were (also) sold in the territory that the invoked Business Court was in charge of. In that regard, however, the judgment also concluded unfavourably to the plaintiff, considering the “likelihood of confusion or associability of the products characterised by the above-mentioned trademarks” to be “concretely excluded”. This was because “on the one hand, the plaintiff’s distinctive sign, being merely descriptive of its component (inositol) and its therapeutic purpose (fertility), must be considered weak, so that even small differences are sufficient to rule out any confusion”; on the other hand, “the distinctive mark of the defendant presents graphical, phonetic and conceptual differences that are more than adequate to rule out any confusion between the products of the two parties”.
Consequently, the plaintiff’s claims were rejected and it was ordered to pay the litigation costs.