The Court of Milan rules on compensation for damages from design infringement

With sentence no. 5006 of 13 May 2024, the IP Court of Milan ascertained the infringement, by the container called "ALTANA", of the registered community designs of Sirsa s.p.a. nos. 000011549-0001, 000011549-0002 and 000011549-0003. Below is a comparison between the first of the three designs (on the left) and the ALTANA product (on the right):

The Court ordered Sirsa’s counterparties, i.e. the companies involved in the production and marketing of the ALTANA model, to pay damages.

In determining the amount of payable damages, the Judges first noted that a direct relationship between ALTANA sales and a drop in Sirsa sales appeared to be substantially proven, given that:

-       the Sirsa sales had decreased during the marketing of the ALTANA products, and had increased again as soon as their marketing had ceased due to the preliminary injunction issued by the same Court;

-       the ALTANA cointainers had been sold to customers who had previously sourced supplies from Sirsa;

-       the counterparties had not indicated other elements that could have caused that decrease in the Sirsa sales, such as for example possible customer dissatisfaction, a crisis of this specific market, the presence of other competing models that could have changed the decisions of the end-users.

The Judges therefore calculated the damages suffered by Sirsa based on the profits lost due to the infringers’ commercialisation, thus applying one of the criteria established by art. 125 Italian IP Code for damage calculation. Specifically, referring to the report filed by the Court Expert Witness, the Judges found that:

-       Sirsa's contribution margin on each container amounted to €13.26, calculated by subtracting from the average sales price the average production cost (in turn calculated on the incremental variable costs directly dependent on the production of the product - raw materials, packaging, etc. -, without taking into account fixed costs, devaluations, amortisation, provisions, financial and extraordinary components, taxes);

-       the number of ALTANA products sold amounted to 23,515;

-       Sirsa's lost profit was calculated by the multiplication of these two figures, and amounted to € 311,808.90.

However, the Judges denied compensation for any additional damages claimed by Sirsa, such as: costs for acquiring and preserving proof of the infringement and for the means to combat it; expenses for research, development and industrialisation, including the cost of filing the infringed community designs; expenses for advertising, promotions and participation in various sector fairs. The Court in fact found that, beyond the issue of whether compensation for these expenses can theoretically be ordered, Sirsa had not provided suitable evidence in this respect.

In conclusion, the Court ordered:

-       the cessation of any further production and marketing of the ALTANA products, with a penalty of €500 for each further container produced and/or marketed;

-       their withdrawal from the market;

-       the assignment to Sirsa of the relevant mold pursuant to art. 124 co. 4 IP Code, as it was solely intended to produce containers interfering with Sirsa's registered designs;

-       compensation for the aforementioned damages, as well as monetary revaluation and interest;

-       compensation for legal costs of approximately €30,000 (including fees for the previous preliminary proceedings) and payment of the Court Expert Witness’ fees; and

-       publication of the ruling in the magazine "Eurocarni" in double font size.

The sentence is currently appealable.