Urgent requests for declaration of non infringement (DNI)? Frequently DeNIed…

Many domestic cats would probably like to know in advance whether a certain activity on their part is permitted (eg. jumping on the bed while the owner sleeps).

Similarly, many business cats would like to know in advance whether or not one of their products could be considered to infringe the intellectual property rights of a competitor. For domestic cats, the only way to know whether a certain activity is infringing is to use a try-and-see approach. On the other hand, (business cats and) commercial operators, at least in Italy, have the possibility of bringing an action for negative infringement (being an activity doesn't infringe) before a competent Court, so that a third and impartial judge can possibly settle the matter.

In particular, when a company wants to receive a rapid response it may file a precautionary action for negative declaratory relief (an urgent ‘declaration of non infringement’, or ‘DNI’). In Italy such a request must be supported by three fundamental requirements. First of all, there must be a legal interest in bringing the action (the negative assessment of infringement presupposes a situation of objective uncertainty caused by a dispute with another party, so that a conflict may arise - subjective uncertainty is not sufficient), then there must be a danger of delay (the so-called periculum in mora or urgency requisite, i.e. an urgent need for the petitioner to obtain a provisional measure in order to prevent irreparable harm from occurring or consolidating in the time needed for an ordinary case to reach its outcome), and finally, of course, there must be a substantial prerequisite (i.e. the Court must consider that the product is not actually infringing).

In the light of these prerequisites, the path for the party fearing infringement to obtain an urgent DNI is not a very easy one to follow.

The Decision

The order commented on here, issued by the Court of Milan on 19 October 2021 in a precautionary procedure, is rather simple but interesting and explanatory.

The decision stems from an urgent request submitted by the Istituto Poligrafico e Zecca dello Stato (the National Mill, hereinafter "IPZS"), which asked the Court on a precautionary and urgent basis to issue a DNI concerning a product described in the technical specifications of a Community public tender, called for the award of the "supply of hot-rollable holographic film for the production of the electronic passport". According to the application for interim measures, the IPZS urgently needed to award the contract, but it had reason to fear that a company, Centro Grafico DG s.p.a. (hereinafter 'Centro Grafico’), would claim that the product subject to the tender would infringe two of its Italian and European patents on the technology at stake.

In support of its application, IPZS argued that it had already received warning letters from Centro Grafico, which had supposedly 'led to a situation of serious uncertainty in relation to the possibility of continuing and completing' the tender procedure. This would have harmed both the public interest underlying the production and supply of passports.

According to the applicant, both of the respondent's patents were, inter alia, invalid for lack of novelty and inventive step. In any event, the product described in the tender would have not infringed on Centro Grafico's exclusive rights, since there was no actual interference with the (invalid) claims of Centro Grafico's titles.

The Court of Milan has dismissed the application on the ground that the request lacked the requirement of urgency (periculum in mora), since the public body had already published the call for tenders, which would have been awarded in a few weeks, and it was inconceivable that the Court could issue its decision before the call for tenders was then awarded, since a technical examination of the matter would have necessarily taken at least 2-3 months.

The Court, in fact, stated as follows (translation of this GuestKat): "It must be considered that the requesting party had published and commenced the tender procedure prior to the lodging of this urgent request, thus showing that it did not feel at all conditioned by the initiatives that Centro Grafico may undertake to protect the rights and prerogatives connected with the ownership of its patents. [...] In the present state of the proceedings, therefore, it appears that there is no real and concrete risk of delay that would justify an urgent intervention of the judicial authority".

Comment

The question of the negative finding of infringement is very interesting and debated among those concerning the procedure in the field of intellectual property particularly given the number of decisions of Courts that deny the DNI.

In general terms, there is feeling among practitioners that Courts do not feel at ease in acting as precautionary ‘arbitrators’. On many occasions, the requests for urgent DNIs are refused because the Courts state that the possible infringer has not received a specific accusation of infringement from the rightholder (even when similar challenges have been brought in different countries). Also, there are numerous rulings in Italy along the lines of the one commented on herein which have held the requirement of periculum in mora to be absent when (any form of) marketing had already been started by the applicant. 

In this regard, it seems that apart from very specific situations and to stay on the safe side, the basic requirements for bringing a precautionary action for DNI are nowadays rather clear (and stringent) in Italy. And these are: (a) the person who fears that he may be infringing has not yet put the possibly infringing product on the market; (b) the owner of the right allegedly infringed has already openly expressed his opposition to the marketing of the product at stake, with a challenge that specifically concerns the Italian territory and the specific product at stake.

Although the AmeriKat told this Kat that she wonders whether such stringent rules put a potential defendant in a Catch 22: either you are too hasty and the rights holder hasn't threatened action yet so you can't get a DNI or you are too late after the rights holder had threatened but after you started marketing so don't get a DNI.  So much for commercial certainty, says Merpel. And as a brand new GuestKat I couldn't do anything but agree with those experienced Kats and add that a similar situation is that of a rightholder that files a request for preliminary injunctions and sees it refused because the alleged infringer has not (yet) started marketing.

In the pictures above, "Bedtime" by Louis Wain (1860-1939), in public domain and

Aaron Parecki, "Spy30 Scavenger Hunt" from Flickr, CC 2.0 license