IP REPORT_August 2015

Protection of GIs and conflict with trademarks in traditional and online markets

Recent developments in Italian case law

Two important decisions on geographical indications (GIs) have been issued in 2015 that further strengthen the protection of GIs in Italy. However, these decisions also highlight the importance of using the appropriate defence strategies, as the respective outcome largely depended on the claims that the parties presented.

In Decision 2828 (February 12 2015) the Supreme Court of Cassation considered the alleged infringement of the GI ‘Felino’, which refers to a particular kind of salami manufactured in the Parma region. It has been a protected GI since 2013, but was not protected at an EU level when the case was brought. The Supreme Court denied the sought-for protection based on the European Court of Justice (ECJ) decision in Case C-35/13 (May 8 2014), which held that EU Regulation 2081/92: “does not afford protection to a geographical designation which has not obtained a Community registration, but that geographical designation may be protected, should the case arise, under national legislation concerning geographical designations relating to products for which there is no specific link between their characteristics and their geographical origin.”

The Supreme Court held that the fact the GI ‘Felino’ was used for products that came from a different region was misleading and amounted to unfair competition under Italian law, irrespective of whether there was any link between the origin and the quality of said products.

However, the court dismissed the claimants’ action, because “generally speaking this kind of unfair competition act could have been invoked by the claimants, but had not been, as seen in the claims stated in their writ of summons”.

In contrast, in a decision rendered on June 9 2015 the Court of Milan (IP Specialised Division) upheld the claims filed by the Consortium Emmentaler Switzerland (whose GI is not protected at an EU level) against certain companies that manufactured cheese in Switzerland marketed in Italy as ‘Emmentaler’ and which was not produced according to the Swiss rules of production for this kind of cheese. The court decided that the defendants’ conduct constituted an infringement of Emmentaler’s indications of origin (ie, ‘Emmentaler’, ‘Emmental’ and ‘Emmental/Emmentaler Svizzero’) and its registered and unregistered trademarks (including collective unregistered trademarks, which is a first in Italy), as well as unfair competition provisions.

In a previous decision dated March 17 2012 the Court of Milan had already decided that the denomination ‘Emmentaler’ should be protected in Italy – even without being registered at an EU level – on the basis of the 1951 Stresa Convention, which concerns denominations for cheese. The court held that the convention is valid and still binding for Italy in its relationship with Switzerland, which is not an EU member state.

The new decision also upheld the claimant’s argument that the Stresa Convention provides protection for the indications ‘Emmentaler’ and ‘Emmental’, declaring that cheese manufactured outside Switzerland that have specific qualities must indicate their place of origin and that ‘Emmentaler’ and ‘Emmental’ still refer only to the famous cheese produced in Switzerland according to Swiss rules. This represents a milestone in the field of GIs in Italy.

As a result, the court issued an injunction to stop the infringing activities (ie, importing, trading and advertising products bearing infringing signs such as ‘Emmentaler’, ‘Emmental’, ‘Emmental/Emmentaler Svizzero’ and/or ‘lo Svizzero’, or indications and signs which are misleading with regard to the origin and qualities of the products), and to prevent the defendants from repeating these activities in future. The court also ordered the definitive withdrawal of the products from the market and their destruction or transfer to the plaintiff. The court order was further strengthened through the establishment of a penalty for any further violations (€100 for each violation) and for each day during which compliance with the court order was delayed.

An additional point concerned the award of damages for the unlawful acts that the defendants had committed. The court awarded the amounts determined by the court-appointed accountant expert as lost profits (equivalent to the contribution that would have been paid to the plaintiff for a corresponding quantity of the original product), and ordered the defendants to compensate the consortium for the damage to its reputation in the same amount. The total amount of damages was approximately €1.8 million.

The court also ordered publication of the judgment at the defendants’ cost in leading Italian newspaper Corriere della Sera.

Global protection of quality agricultural products

These decisions confirm and strengthen the momentum of Italian case law regarding the protection of GIs beyond the scope of EU regulations. Although legislation in this field initially developed in a fragmentary manner – often through the adoption of special laws relating to their specific context – it has progressively acquired consistency and homogeneity.

Further, these decisions highlight the importance of flexibility when using the different tools provided in each jurisdiction to protect signs that indicate the origin of products, with a pragmatic approach that is typically Italian. Globalisation does not simply mean globalisation of markets, but also of production and thus the deterritorialisation – and dematerialisation – of the economy. Traditional products are based on localisation, which is stressed by designations that denote their origin.(1) This local element is increasingly in need of global protection (ie, not only in the country of origin, but also in other markets to which the goods are exported). However, while the protection now afforded to such designations is usually robust in their country of origin, there is a lack of satisfactory protection at an international level.

This appears to be because – unlike in other fields of intellectual property such as trademarks and patents, in which the position of developed countries is largely similar – the interests of countries with a solid tradition of producing quality local agricultural produce (of which Italy is one) conflict strongly with those of countries without such a tradition. The latter tend to favour their own producers, which use the former’s products as a model and distinguish their own goods with designations and symbols that draw on the traditions that inspired them. This has given rise to a phenomenon which, in the context of Italian products, is known as ‘Italian sounding’.

In order to tackle these problems, a global management strategy is needed that aims to adapt the way in which these signs are managed and promoted according to the different levels and types of protection offered in each jurisdiction.

The abovementioned conflicting interests explain why the minimum standard of protection that the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) provides to IP institutes for GIs is minimal.(2) EU IP legislation is more developed and consistent, given the greater homogeneity of interest for protection.

Protecting designations of origin under Italian law

Italian legislation has developed in a fragmentary manner – often through the adoption of special laws that relate to a specific context – but has progressively acquired consistency and homogeneity in relation to international agreements and EU law.(3)

Generally, the protection of designations of origin not limited to cases of public deception has been entrusted to unfair competition regulations. Articles 29 and 30 of the Code of Intellectual Property (essentially the same as Article 31 of Decree-Law 198/96, which implements TRIPs) protect designations of origin and in cases of public deception expressly refer to the provisions on unfair competition, as the use of false designations of origin is considered free riding.(4)

In its original wording, Article 30 of the Code of Intellectual Property provided protection for all names which met the requirements of Article 29, regardless of whether they had obtained protection through ad hoc legislation.(5) Further, these requirements were more limited than those provided in the Lisbon Agreement (ie, ‘milieu geographique’, understood as a link between the objective characteristics of a product and a geographical area).(6) As with an EU-protected GI, it is enough for just the reputation of a product to be linked to an area, as provided for in the corresponding section of TRIPs. With the reform of the Code of Intellectual Property through Decree-Law 131/2010, Article 30 of the former was rewritten to mirror Article 13(1)(a) of EU Regulation 1151/2012 on the protection of protected designations of origin and protected GIs. Therefore, all designations of origin (and not only those of agricultural products registered at an EU level) are protected in Italy against any unauthorised use which “unduly exploits the reputation of the protected name” – that is, against parasitical exploitation. Further, the amendment of Article 11 of the Code of Intellectual Property allows the use of geographical names in trade, even if they are registered as collective trademarks, on the sole condition that such use complies with fair practice. The rules provided in Article 21 of the Code of Intellectual Property for individual trademarks are also applied.

Reputation is protected directly against any form of parasitical exploitation, even if there is no public deception. These signs are thus coming to resemble (other) distinctive signs, in particular trademarks, which are likewise now protected against any form of commercial parasitism: it being understood that, in order for designations of origin and for geographical indications to be protected as such, they must still express a link between the product and the territory. Should this not be the case, they would essentially be fantasy signs and there would therefore be no obstacle to their being monopolised as individual trademarks by a specific enterprise.

In all cases, parasitism marks the extent and the limit of protection. This demonstrates the progressive harmonisation of rules on designations of origin and those on trademarks that has occurred regarding not only protection, but also – in strict correlation with the former at the level of balancing interests – in relation to the importance attributed to the fact that the sign does not mislead (which has always been fundamental for designations of origin and has become the keystone of the new trademark law).(7) Therefore, a type of common law for commercial signs has been created. This does not mean that there is a uniformity of rules for different types of sign, but rather that there is a common denominator between them.(8)

Community law and pre-existing treaties

Another problematic aspect of designations of origin of agricultural products concerns potential differences between EU law and agreements entered into before the treaty that established the European Economic Community came into force.

Such agreements are superseded in relations between EU member states. However, they must still be applied in relations between one or more EU member states and non-member states. This is expressly established by Article 351 of the Treaty on the Functioning of the European Union and has been confirmed many times by the ECJ.(9) Article 7(3)(c) of EU Regulation 2081/92 allows for the registration of a protected designation of origin or a protected GI to be opposed on the basis of a designation or indication (from an EU member or non-member state) not registered at an EU level.

This confirms the possibility that there are designations of origin and/or geographical indications outside the EU legal system and that they can be protected.

Under recent Italian case law, this protection has been afforded, for example, to the Swiss designation ‘Emmental’ – which is covered by the Stresa Convention – but does not apply to relations between EU member states.(10) It is understood that the scope of protection for publicly recognizable geographical denominations may be recovered under Articles 29 and 30 of the Code of Intellectual Property, the Paris Convention and the provisions on unfair competition.

Therefore, public perception is decisive in the protection of Italian designations of origin from any form of misleading advertising and free riding in those jurisdictions in which the perception rule is not recognised. Such illicit activities are prohibited under the Paris Convention.

Geographical denominations and online infringement

The Internet provides a great opportunity for the agricultural sector in terms of marketing and advertising quality products and their distinctive signs to a potentially global market. However, the Internet also poses a threat. ‘Pure players’ (ie, parties that have no retail outlet and sell only online) pose a serious problem. These parties are difficult to identify and problems may arise regarding the ability and liability of internet service providers (ISPs) to monitor the content of online advertisements.

ISP liability is regulated by the EU E-commerce Directive (2000/31/EC) – implemented in Italy by Decree-Law 70/2003 – with more favourable rules than those relating to intermediaries. However, the evolution of EU case law has led to ISPs being recognised as liable for violations in which they have actively cooperated or have failed to stop when informed of the issue, as well as having a duty to take action to prevent further violations.(11)

The Antitrust Authority and the Telecommunications Authority have made recent interventions in this regard. The former body is increasingly active in blocking websites which systematically offer infringing products. Such websites are engaging in unfair and misleading commercial practices and are thus blocked (in Italy only) by the Postal and Telecommunications Police. However, the Telecommunications Authority has introduced a regulation on copyright protection which provides for a simple, cheap and quick procedure (especially where urgent action is required) to remove content from the Internet that violates the copyright of other parties.(12)

One potential means of tackling these phenomena effectively is for producers and consortiums that are victims of infringement to take legal action as a group – a sort of class action. Court orders should be sought that have pan-European efficacy and are wide ranging (ie, that relate to all or almost all infringing products made by one single infringer, so that it is no longer financially viable for the infringer to continue the illicit activity). Operations of this kind are possible in all sectors, provided that they are preceded by serious legal and intelligence work and by targeted monitoring aimed at reconstructing the chain of infringing products and clusters of infringement as far as possible, identifying the parties involved and the location of the infringers.

Geographical names, protection against free riding and opportunities for exploitation

The progressive harmonisation of rules on designations of origin and those on trademarks can be seen not only with regard to protection against any form of parasitism, but also regarding – in strict correlation with the former at the level of balancing interests – the importance attributed to the fact that the sign does not mislead. This twofold harmonisation also indicates a possible path towards the harmonisation of rules at an international level, creating the conditions for overcoming the existing divarication between the position of EU member states and non-EU member states, especially the United States and Asian countries.(13)

The amendments to the Code of Intellectual Property that the 2010 reform introduced may also permit the legitimate exploitation of values inherent in significant geographical names, in particular through licences.(14) The new Italian provisions allow consortiums protecting designations of origin and public territorial bodies to use geographical names and other symbols connected to a territory as instruments to ascribe value to the positive externalities linked to a territory’s renown. Not only would all forms of free riding and parasitical exploitation of this renown be prohibited, it would also be positively monetised by allowing these signs to be used by undertakings operating in the territory in question. Precise limits would be imposed to avoid the signs becoming a source of deception. This would act as a driving force for the development of local initiatives in the area in question.(15)

The consolidated rights of third parties are exempt, even only with regard to the non-distinctive use of signs. However, it cannot be ruled out that changing public perceptions may lead to these rights lapsing or allow for various forms of exploiting the signs with a distinctive function. The keystone once again will be public perception, which is the decisive element in establishing whether a sign can be protected and defining its scope of protection. This position is fully in line with EU law.

There is a new balance between exclusive rights, competition and contracts in which protection is provided only when needed, in the knowledge that the applicable rules are intended to regulate real situations and that their justification is strictly connected to human experience from a perspective that could be defined as natural law – that is, adapting the law to real-life interpersonal relations.(16)


(1) See Carli, Indicazioni di provenienza e denominazioni di origine: II) Ordinamento comunitario, in Enc Giur Treccani, vol X, Rome 1999, 3.

(2) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) drawn up in
Marrakech in 1994 within the ambit of the Uruguay Round of the General Agreement on Tariffs and Trade. Italy implemented TRIPs through Decree-Law 198/1996, issued as part of Law 29 (747/1994).

(3) Prosciutto di Parma (now a protected designation of origin) is emblematic. It was recognised as a designation of origin through Law 506 of July 4 1970 (later replaced by Law 26 of February 13 1990) and has progressively acquired consistency and homogeneity.

(4) For further information please see Court of Naples, July 8 1996, in Il dir ind, 1996, 1016 ff; Bologna Court of Appeal, June 24 1996, in Giur ann dir ind, 1997, 3598; Court of Modena, August 17 1993, ibid, 1993, 2990; Court of Modena, April 30 1991, ibid, 1991, 2662; Genova Court of Appeal, July 4 1990, ibid, 1990, 2631.

(5) Article 29 of the Code of Intellectual Property mentions both designations of origin and geographical indications. The former may, to some extent, be equated with the designations provided by the Lisbon Agreement, since they presuppose that the quality or the characteristics of the product bearing the designation – and thus of its objective features – are essentially or exclusively due to a particular geographical environment with its inherent natural and human factors and the production, processing and preparation of which take place in the defined geographical area. The latter are more similar to the indications of provenance of TRIPs, since they require only that a specific quality, reputation or other characteristic is attributable to that geographical origin and that at least one of the stages of production takes place in the defined geographical area. It must be stressed that Italy is part of the Lisbon Agreement, which permits the international registration and protection of mere designations of origin in every field of industry and agriculture, but the agreement has just 28 signatories countries excluding the United States, Canada and Asian countries. Although a revised Lisbon Agreement was adopted on May 21 2015 which permits the registration of mere geographical indications, once again it is far from attractive for countries like the United States and Canada.

(6) This difference is all the more relevant as in applying the agreement, the Italian courts have always checked whether this milieu exists on a case-by-case basis. For further details please see Supreme Court, November 28 1996, 10857, in Giur ann dir ind, 1996; 3565, Supreme Court, September 10 2002, 13168, ibid, 2002; 4337 and Galli, Globalizzazione dell’economia e tutela delle denominazioni di origine dei prodotti agro-alimentari, Ibid, 66-67.

(7) In the case of registration (and use) of a trademark corresponding to a designation of origin or a geographical indication there should, logically speaking, only be a bar when inserting the geographical name of the trademark misleads the public or leads to free-riding on the reputation of the geographical name. Italian legal theorists (see in particular Galli, Globalizzazione dell’economia e tutela delle denominazioni di origine dei prodotti agro-alimentari, 77-78 and Sarti, La tutela delle indicazioni geografiche nel sistema comunitario, in B Ubertazzi-Espada, Le indicazioni di qualità degli alimenti, Milano, 2009, p 343 and Contini, Le possibili interferenze tra diritti su DOP e IGP e diritti di marchio, in Galli-Gambino, Codice commentato della Proprietà Industriale e Intellettuale, Turing, 2011, p 2299 ss) have clearly expressed themselves thus, sharing the position of the ECJ (see in particular ECJ, March 4 1999, in C-87/97). However, the corresponding rule of the EU Regulation on the names of wines has been interpreted by the General Court to mean that the bar on registration as a trademark is automatic and absolute, that is, it applies to any type of product and for any form of insertion of the geographical name in the sign (General Court, May 11 2010, in T-237/08).

Italian scholars heavily criticised this reasoning, as it is clearly inconsistent, as it cannot be justified even on the basis of the public policy interests of the agricultural sector, given that, without a link to the designations of origin and the geographical indications at issue, the need for protection which the legislator intended to meet by establishing this system does not exist.

(8) For further information please see Galli, Codice della proprietà industriale: la riforma 2010, Milan, 2010, p 19 ff.

(9) ECJ, March 3 2009, C-249/06. For further information please see ECJ, October 14 1980, C-812/79; ECJ, July 4 2000, C-84/98; CGCE November 18 2003, C-216/01; and ECJ, September 22 1988, C- 286/96.

(10) Please see Court of Milan, June 9 2015 and Court of Milan, March 17 2012 at For further details on this topic please see Galli, “Swiss Emmentaler protected in Italy as denomination of origin even without EU registration”). The Supreme Court, Criminal Division (November 19 1993, in Cass pen,1995, 1209) confirmed that the Stresa Convention is still valid and binding on Italy in relations with Switzerland.

(11) ECJ, July 12 2011, C-324/09, L’Oréal v eBay, points 128-134. For an understanding of the juridical problems that online infringement causes in Europe and the proposed solutions of legal theorists and the courts please see Galli, Contraffazione web e luxury goods: le sfide del commercio elettronico al sistema della moda, in Il dir ind, 2013, 342 ff. The observations made therein, albeit in relation to the fashion industry, may also be extended to quality agricultural products.

(12) Regulation on Copyright Protection online and implementing procedures pursuant to Decree- law 70, April 9 2003, adopted by Resolution 680/13/CONS on December 12 2013. It was the introduction of the Italian Communication Authority (AGCOM) Regulation that allowed Italy to be taken off the watch list of countries considered at risk for US companies from the perspective of insufficient protection of IP rights. The list is drafted annually by the US Secretary of Commerce and Italy had been on it from its inception in 1989 (on this point please see Galli Paganini “How Italy successfully improved its approach to intellectual property rights protection – Case Study on Italy”, in the 2014 International Property Rights Index). However, the list is being scrutinised by the
Constitutional Court following remittal by the Lazio Regional Administrative Tribunal, Section I, Order 26 September 2014, 10016.

(13) The International Association for the Protection of Intellectual Property World Congress held in Gothenburg in October 2006 passed a resolution which proposed a ban on public deception and undue exploitation of commercial reputation as a guideline for resolving, at an international level too, frequent conflicts between trademarks and designations of origin (for further information please see This proposal was also approved by the North American delegates, thus indicating a possible path towards harmonisation and a workable strategy for settling these conflicts on the basis of current rules.

(14) The new wording of Article 19 of the Code of Intellectual Property on the trademarks of public territorial bodies is also important. The article states that “the exploitation of a trademark for commercial purposes may be exercised directly by the municipality also through merchandising activity, with the relative proceeds going to the financing of institutional activities or covering past deficits of that body”.

(15) For further information please see Galli, Codice della proprietà industriale: la riforma 2010, Ibid, and in the same volume Contini, Le opportunità di sfruttamento della nuova protezione delle denominazioni di origine e il suolo dei Consorzi, p 43 ff.

(16) For this approach please see Galli, La proprietà industriale tra diritto internazionale e diritti naturali, in L’incidenza del diritto internazionale sul diritto civile (Atti del V Convegno Nazionale SISDIC), Naples, 2011, p 117 ff.