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12 March 2018
Domestic trade secret protection regime
Damages and penalties
The government recently submitted to Parliament a draft legislative decree to implement the EU Directive on Trade Secrets (2016/943/EC), after being granted to do so by Law 163/2017. The legislative decree should be adopted by the end of March 2018 once the opinions of the competent parliamentary committees have been received.
Before 1996, trade secrets in Italy were protected only within the framework of unfair competition (Article 2598(3) of the Civil Code's general rules on unfair competition). In 1996 a specific provision corresponding to Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) was introduced to this framework (Article 6bis of the former Patent Law). Subsequently, when the Industrial Property Code was implemented in 2005, trade secrets were included among IP rights (Articles 98 and 99 of the Code of Industrial Property). However, as expressly indicated in the Report Illustrating the Code, the aim of doing so was not to modernise trade secret rules, but rather to clarify that these secrets were IP rights, as indicated in TRIPs.
In 2010 Article 99 of the Industrial Property Code was amended to:
Further, Article 99 now explicitly grants protection only to trade secrets that are:
Following the inclusion of rules on trade secrets in the Code of Industrial Property, they are directly enforceable not only against competitors, but also against non-competing companies and private persons (in particular, ex-employees). Further, it is also possible to rely on the procedural rules set out for the protection of IP rights – namely, specific evidence collection, protective and corrective measures and rules regarding damages and the disgorgement of profits.
Damages for trade secret violations are calculated according to the same criteria applied to other IP rights infringements. Article 125 of the Code of Industrial Property – following the implementation of the EU IP Rights Enforcement Directive (2004/48/EC) – establishes that a rights holder may receive a sum which corresponds to the infringer's profits or the rights holder's lost profits, whichever is greater. Substantial damages are also often awarded in cases of trade secret infringement (see the Court of Brescia's January 31 2013 decision which awarded €2 million in damages for trade secret violations).
The violation of trade secrets may also be a criminal offence, regulated by Article 623 of the Criminal Code, according to which:
"1. Whoever comes to know, by way of his state or office, profession or art, of information which is intended to remain secret, regarding scientific discoveries or inventions or industrial applications and discloses it or uses it for his own or another's benefit, shall be given a prison sentence of up to two years. 2. The offence is punishable upon the injured part submitting a complaint."
Given the considerable effectiveness of Italy's trade secrets protection regime, many Italian scholars have greeted the introduction of the EU directive negatively. They fear that its implementation will be a step backwards in the protection of trade secrets, which is of strategic importance for Italy.
However, the government has been cautious and limited implementation to those provisions that will strengthen pre-existing protection and mandatory provisions. Further, the interpretation of Italy's pre-existing trade secrets protection regime in case law follows the directive. However, no amendments have been made to the existing domestic rules.
The main changes proposed include the following:
For further information on this topic please contact Cesare Galli at IP Law Galli by telephone (+39 02 5412 3094) or email (email@example.com). The IP Law Galli website can be accessed at www.iplawgalli.it.
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