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Protection of Trade Secrets in Italy | Denton

Abstract

Trade secrets can be protected in Italy based on different sets of legal provisions. Such a structure puts the Italian legal system at the forefront of the protection of know-how in Europe.

In essence, under Italian civil law, business information may be protected as trade secrets stricto sensu under Articles 98 and 99 of the Industrial Property Code (Intellectual Property Code), as amended to implement implements Directive 943/2016 (Trade Secrets Directive) or, more broadly, as confidential information against misappropriation or misuse by competitors constituting unfair competition within the meaning of Article 2598, no. 3, of the Civil Code.

The applicable regime depends on the nature of the information and, above all, on the level of confidentiality and the adequacy of the measures adopted to guarantee it. The scope and effectiveness of available remedies differ between the two regimes. For this reason, it is essential that you have a clear understanding of the different options, in order to meet the relevant requirements in the circumstances and to avoid gaps in protection.

Protection of business secrets under Articles 98 and 99 of the Intellectual Property Code

Even before the implementation of the Trade Secrets Directive, trade secrets were protected in Italy under Articles 98 and 99 of the Intellectual Property Code, which already provided for exclusive intellectual property rights over secret business information.

Article 98 defines trade secrets as “commercial information and technical-industrial experience, including commercial information and experience, subject to the legitimate control of the owner” which is (i) secret; (ii) economically valuable as long as they remain secret; (iii) subject to reasonably adequate measures to maintain their secrecy. If these requirements are met, the confidential information is protected by unregistered industrial property rights and benefits from the reinforced enforcement regime set up by the Intellectual Property Code.

In particular, the owner of the intellectual property rights can request urgent measures against the infringing activities and products, such as a preventive technical expertise, a preliminary search order, a seizure and a preliminary injunction.

Final remedies that may be granted in ordinary proceedings include injunctions, compensatory damages, restitution of profits, seizure and removal of infringing products from the market, and destruction or disposal in ownership of the counterfeit products to the rights holder.

Indeed, under Article 99 of the Intellectual Property Code, the owner of the trade secret has the right to prevent third parties from acquiring, disclosing or misusing the secrets without consent, except for information obtained legitimately, for example by reverse engineering. In fact, the Italian parliament did not expressly recognize the legality of reverse engineering, relying on pre-existing case law on the same issue. In this respect, the accessibility of information is relative, the abstract possibility of reverse engineering is not sufficient to exclude trade secret protection if the reverse engineering is not the actual source of the relevant information. .

The implementation of the Trade Secrets Directive in Italy resulted in three major changes to Article 99 of the Intellectual Property Code:

  1. The person who uses, discloses or acquires secrets obtained from third parties will be liable if they know or should know that these secrets were obtained illegally in the first place.
  2. The production and marketing of “infringing goods” – that is, goods which derive a “significant profit” from the illicit use of trade secrets – is prohibited if the person carrying out these activities knows or should know that trade secrets have been unlawfully used for these purposes. purposes.
  3. The statute of limitations for bringing substantive actions against misuse of trade secrets is currently set at five years.

In addition, business secrets now benefit from a reinforced confidentiality regime aimed at maintaining their secrecy during enforcement proceedings.

In particular, under Article 121-ter of the Intellectual Property Code, a judge may impose on the parties, lawyers or other persons involved in a dispute (for example witnesses) an obligation of confidentiality which may remain in force even after the proceedings are closed.

In addition, the judge can limit access to documents and hearings to a defined number of subjects and impose a redaction of public orders and decisions referring to secrets.

In matters of summary proceedings, the judge may also replace summary proceedings with a specific measure provided for business secrets, allowing the alleged infringer to continue to exploit the secrets against payment of a security deposit, provided that he does not there is no risk of subsequent disclosure of the information. On the other hand, if the prior measures obtained by the holder of the trade secret are subsequently revoked because (i) the holder has not initiated ordinary proceedings on the merits within the prescribed period or (ii) in proceedings on the merits, it is noted that if there was no trade secret worthy of protection, the holder of the trade secret must repair the damage suffered by the party accused of infringement (article 132, 5-bis and 5-quarter , Intellectual Property Code).

Unfair competition and confidential information

The protection of confidential information by the Civil Code falls within the domain of unfair competition and derives from the “general clause” of art. 2598 no. 3, which prohibits illegal behavior by those who “directly or indirectly use any other means inconsistent with the principles of good business conduct and likely to harm the business of others”.

To obtain protection against misappropriation or misuse of confidential information, the following conditions must be met: (i) the rights holder and the infringer must be entrepreneurs and competitors; (ii) the owner of the information in question has not made it available and does not intend to make it available to the public; (iii) the disclosure or use of such information would cause actual or potential competitive harm.

In practice, it is usually confidential information (such as lists of customers or suppliers, for example) that constitute the intangible assets of entrepreneurs – being the results of their investment that are not intended to be shared with third parties. third parties, even if they cannot be subject to strict confidentiality measures. Therefore, the misuse of such information constitutes parasitic behavior exploiting the efforts of a competitor.

Contractors who request protection of confidential information under Section 2598, no. 3, Civil Code may avail itself of the remedies provided for in Articles 2599 and 2600 Civil Code, namely injunctions, compensatory damages, publication of the judgment as well as “measures to remove the effects” of the behavior unlawful (such as an order to destroy counterfeit goods). However, these are not comparable to the wide range of remedies and precautionary measures available for trade secrets, especially after the implementation of the Trade Secrets Directive. In addition, unlike trade secret infringement actions under Articles 98-99 of the Intellectual Property Code, unfair competition actions based on Article 2598 of the Civil Code do not fall within the jurisdiction of specialized courts. in intellectual property, as the Italian Supreme Court has just specified in its decision n° 2598. 3452 of February 3, 2022.

Conclusion

In summary, confidential business information may be protected to some extent in Italy against misappropriation and misuse even if it is not considered a trade secret, as the owner of the information may rely on the provisions of the Civil Code governing unfair competition.

However, the threshold for accessing stronger – and more desirable – trade secret protection may not be as high as you think. Marginal investments might be sufficient to meet the relevant requirements, resulting in the information gaining protection as a genuine trade secret.

In this regard, Italian courts generally take the following view:

  1. Information may be considered secret if it is a set of elements which, as such, cannot be obtained by an expert in the sector concerned from individual information accessible to the public.
  2. The efforts of the secret holder to gather this secret information and the resulting competitive advantage alone are proof of economic value.
  3. Confidentiality obligations within and outside the organization are adequate to keep information secret and to unambiguously express the owner’s desire to maintain secrecy from collaborators and employees, as long as this is coupled with appropriate internal policies and IT systems (e.g. the use of passwords is not sufficient if employees can store the relevant information on their PC, share it with third parties via email or print it without restriction).

Identifying actual trade secrets – thus allowing them to enjoy enhanced protection as intellectual property rights under Articles 98 and 99 of the Italian Intellectual Property Code – is a viable and recommended option that every organization should to chase. This can be accomplished by implementing best practices and reasonable measures. In some of the most pessimistic scenarios, unfair competition provisions can be helpful, but they should not be the workhorse to rely on when valuable information is at stake.