ITALY – LEGISLATION UPDATE

The Italian law ratifying the Unitary Patent Court Agreement has introduced specific provisions on contributory infringement into national legislation; a careful reading raises questions on the liability of third parties under the new law.

The last few weeks have seen Italy take decisive steps towards making the Unitary Patent Court (UPC) a reality: Italian Law 214/2016 ratifying the UPC Agreement entered into force on 25 November 2016 – although the Italian government has not yet notified the European Commission, which is the last act required to formalise ratification.

On 14 January 2017 the government presented a bill to enact the Protocol on Privileges and Immunities of the UPC. Last but not least, office space has been assigned for UPC’s local division in Milan.

The ratification of the UPC Agreement entails the implementation of the agreement’s provisions into Italian law: most notably, by the introduction of a specific provision on contributory infringement (also known as indirect infringement).

Introducing contributory infringement

Italian law No. 214/2016 provides for, inter alia, the integration into the Italian system of the provisions of Article 26 of the UPC Agreement on contributory infringement.

Article 26 UPC reads as follows:

“(1) A patent shall confer on its proprietor the right to prevent any third party not having the proprietor’s consent from supplying or offering to supply, within the territory of the Contracting Member States in which that patent has effect, any person other than a party entitled to exploit the patented invention, with means, relating to an essential element of that invention, for putting it into effect therein, when the third party knows, or should have known, that those means are suitable and intended for putting that invention into effect.

(2) Paragraph 1 shall not apply when the means are staple commercial products, except where the third party induces the person supplied to perform any of the acts prohibited by Article 25.

(3) Persons performing the acts referred to in Article 27 (a) to (e) shall not be considered to be parties entitled to exploit the invention within the meaning of paragraph 1.”

In that respect, Italian Law 214/2016 has added to Article 66(2) of the Italian Industrial Property Code (IPC) the following three paragraphs:

“2-bis. The patent shall confer on its proprietor also the exclusive right to prevent any third party not having the proprietor’s consent from supplying or offering to supply any person other than a party entitled to exploit the patented invention, with means relating to an essential element of that invention and necessary for putting it into effect within the territory of a State in which the invention is protected, when the third party knows, or should have known using ordinary care, that those means are suitable and intended for putting that invention into effect.

2-ter. Paragraph 2-bis does not apply when the means are constituted by products that are currently on the market, unless the third party induces the person to whom they are supplied to perform the acts prohibited under paragraph 2.

2-quater. For the purposes of paragraph 2-bis, the subjects performing the acts referred to in Article 68 (1) are not considered entitled to use the patented invention”.

Italian legislation had not so far contemplated specific provisions on contributory infringement.

Nonetheless, Italian courts have long acknowledged contributory infringement, at least when a third party manufactures or sells an item that:

• is essential to the manufacture of a patented product or to work a patented process; and
• either has no other function, or is supplied for the specific purpose of infringing a patent – which can be understood, for example, from the instructions for use (see Italian Supreme Court judgement No. 5406 of 12 June 1996).

Before the entry into force of Law 214/2016 the legal basis for finding contributory infringement were basically Articles 124 (4) and 129 (1) IPC – that enable a judge to order that the items produced, imported or sold infringing the right and the specific means to produce them or carry out the protected method or process, be assigned to the ownership of the right holder without prejudice to the right to compensation for damages – as well as Article 2055 of the Italian Civil Code which provides for joint liability.

The amendments introduced by Law 214/2016 are essentially consistent with previous Italian case law, but a careful reading of the new provisions reveals noteworthy issues:

1. The wording of Article 26 of the UPC Agreement “within the territory of the Contracting Member States in which that patent has effect” has been replaced in the Italian law by the sentence  “within the territory of a State in which the invention is protected” .
2. In Art. 26 of the UPC Agreement, reference is made to the actions of “supplying and offering to supply” and “putting it [i.e. the invention] into effect”, the sentence in new Art.66(2bis) IPC seems to refer only to the action of “putting it into effect”.

Accordingly, in Article 66 (2-bis) IPC there is no limitation to the territory of a Contracting Member State either in relation to the territory where the patent right of the proprietor can be exercised or to the territory where the means necessary for putting the invention into effect will be used. Therefore according to said new Article one may speculate that there is contributory infringement also when the acts of supplying or offering to supply the means take place in Italy, but the putting into effect of the invention takes place in any other jurisdiction – inside or outside the European Union – wherein the patent has effect.

Article 66 (2-quater) IPC as amended by Law 214/2016 also deserves attention. Art. 66 (2quater) now provides that “For the purposes of paragraph 2-bis, persons performing the acts set forth in Article 68 (1) shall not be considered parties entitled to exploit the invention”.

Article 68 (1) IPC lays down the provision containing the exclusions from patent rights, in particular: the private use and experimental use of the invention also directed to obtaining a Marketing Authorisation (M.A.).

Accordingly, Article 66 (2-quater) IPC now makes it plain that there may be a case of contributory infringement also when there is no downstream direct infringement, i.e. when the means relating to an essential element of that invention and necessary for putting it into effect are supplied to third parties in order to perform acts that, under the specific circumstances, would not represent infringement of patent rights.

These latter provisions raise reasonable questions on the respective liability, vis-à-vis indirect infringement, of the producer of an active agent necessary for conducting clinical trials, of the entity carrying out the clinical trials finalized to the grant of a M.A. and of the owner of the M.A. when each of these parties are different and independent.

In any case, Law 214/2016 introduces into the Italian Law system specific provisions on contributory infringement that will reduce the degree of uncertainty in the assessment of indirect infringement in court and strengthen patent protection in Italy.