[Guest post] 'Made in Italy' and false indications of origin under the scrutiny of the Italian Supreme Court

The IPKat has received and is pleased to host the guest contribution below by Anna Maria Stein (Eversheds Sutherland), who comments on two recent decisions of the Italian Supreme Court concerning use of the designation 'Made in Italy'.

Here's what Anna Maria writes:

'Made in Italy' and false indications of origin under the scrutiny of the Italian Supreme Court

by Anna Maria Stein

Clearly 'Made in Italy'

The protection of 'Made in Italy' and indications of origin of products has been the object of two recent decisions of the Italian Supreme Court.

The relevant rules are those set forth in Article 4, paragraphs 49 and 49 bis of Law No. 350/2003 concerning the use of the wording 'Made in Italy' and the misleading use of trade marks on the origin of goods, with penalties depending on the conduct at administrative level (paragraph 49 bis) and at criminal level (paragraph 49).

The two decisions in comment are useful to understand the scope as well as the interpretative and practical problems of the aforementioned provisions with particular regard to the divide between civil/administrative offence and criminal offence.

The decisions

With decision No. 20226 of 23 June 2022 (a copy of the judgment in Italian can be found here), the Italian Supreme Court (Civil division) ruled on a dispute that had arisen following an injunction issued by the Chamber of Commerce of Florence against an Italian company for the payment of a fine of Euro 170,000 for the breach, ascertained by the Customs Agency, of Article 4, Paragraph 49 bis of Law No. 350/2003. The goods subject to the sanction were footwear bearing the trade mark, registered in the United Kingdom, ”Luca Stefani” and were of Chinese origin.

The Court of Appeal of Florence annulled the injunction on the assumption that the trade mark and the origin of the product are different and completely independent concepts and that the company is "free to use the trade mark as it prefers to distinguish its products", with the only limitation hat the trade mark cannot generate confusion with another existing trade mark. The Court of Appeal also held that a trade mark consisting of an Italian name, such as the one used in the case under review, was not in itself indicative of any Italian origin of the footwear imported in Italy. Moreover, the upper of the footwear was marked with 'Made in China' and there was no indication of the Italian origin of shoes. The Chamber of Commerce of Florence appealed the decision to the Italian Supreme Court, arguing that the use of the trade mark, although legitimate as a mere distinctive sign, had been carried out in such a way as to induce the consumer to believe that the product was Italian, and this regardless of the deceptiveness of the trade mark itself or the absence of specific wording evoking a possible manufacturing in Italy, such as 'Made in Italy' or the use of flags or red-white-green graphics evoking Italy. In particular, the appellant pointed out that there were no specific and sufficient indications as to the real origin of the products and that the sanctioned products belonged to a sector where Italy enjoys an international reputation.

The Supreme Court, with the favourable opinion of the Attorney General, overturned the decision of the Court of Appeal of Florence and referred the case back to a different section of the same Court of Appeal for a new ruling on the merits. The Supreme Court stated that the provision set forth in Article 4, Paragraph 49 bis of Law no. 350/2003 is aimed at avoiding misunderstandings by the consumer as to the non-Italian origin of the product and, therefore all conducts (active and passive) which are liable to give rise to situations of uncertainty on the effective origin of the product can be sanctioned. Thus implies an obligation for the importing, exporting and/or marketing company to accompany the goods with clear and specific indications to avoid any innocent mistake by the consumer on the origin of the product. According to this principle, also the use of a trademark may lead to misunderstandings as to the (Italian) origin of the product, lacking any other specific indication of foreign origin. In the specific case the indication 'Made in China' was printed only inside of the upper and with less visibility with regard to the trademark. The conduct therefore qualified as “false indication of origin” of the products.

All this was on consideration that the indication 'Made in China' was printed only inside of the upper and with less visibility. The conduct therefore qualified as 'false indication of origin' of the products.

With decision No. 23850 of 21 June 2022 (a copy of the judgment in Italian can be found here), the Italian Supreme Court (Criminal Division) ruled on a criminal measure by the Court of Trieste, issued during the re-examination trial, and upheld the preventive seizure of approximately 37,000 metres of rubber hoses, produced by a Turkish company for an Italian company, bearing the stamp 'Italy'. The alleged offence was that of placing on the market industrial products with misleading indications on their origin under Article 517 of the Criminal Code together with Article 4, paragraph 49 of the aforementioned Law No. 350/2003.

The decision was then appealed before the Italian Supreme Court, complaining (among several grounds of appeal) that the contested conduct was not relevant under the criminal rule of Article 4, paragraph 49, of Law No 350/2003, since the wording 'Italy' printed on the rubber hoses, although imprecise, was not misleading and did not refer to the origin of the product, since it was not preceded by the wording 'made in'. Therefore, such conduct would have only constituted a civil/administrative offence (Article 4, paragraph 49 bis) and not a criminal offence.

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The Supreme Court dismissed the appeal, noting the correctness of the reasoning of the Court of Trieste and recalling the case-law of the Supreme Court on the configurability of the criminal hypothesis not only in the presence of special stamps or labels such as 'made in Italy, "100% italy" or "all Italian", but also through the use of signs (or anything else) that may lead the consumer to believe that the product is of Italian origin, with the only exception for the case where the products are accompanied by clear indications on the exact geographical origin. The Supreme Court concluded that, in the absence of graphic indications or labels referring to the foreign origin, the printing on the goods of the word 'Italy' constituted a relevant criminal offence, given the misleading reference to the manufacturing in Italy, thus without the wording 'made in' being essential for this purpose, given that the wording in question would have had no other reason to be present other than to mislead consumers.

Comment

The two decisions of the Supreme Court provide useful guidance on the interpretation of Articles 49 and 49 bis of Law No. 350/2003. In fact, not only direct active conducts (explicit use of 'made in Italy', affixing of false indications of origin) but also partially active conducts (use of a misleading trademark or partial evocation of Italy) when accompanied by omissive conduct (lack of clear and specific indications on the origin of the products) may constitute relevant conduct under civil and criminal Italian laws.

From a wider perspective, it looks interesting the interplay between rules on protection of indications of origin of products and the possible (mis)use of trade marks evoking a misleading origin of the same product, making clear that a uniform protection system is required at least at the EU level.

The European protection of indications of origin has been a long-time discussed matter especially for agricultural products. More recently the EU Commission focused its attention also on craft and industrial products, which are a specific category of non-agricultural products originating in a certain geographic area and having a specific reputation for their qualities.

On 13 April 2022 the EU Commission published the Impact assessment report on geographical indication protection for craft and industrial products together with the Proposal for a Regulation on Geographical Indications for craft and industrial products. The proposal provides for the establishment of an independent two-stage protection system administered by the EUIPO through a Geographical Indications Division.

The Commission’s Proposal has been welcomed, even if some questions and gaps look still unsolved especially in the relationship with trade mark law. It will therefore be interesting to follow the legislative discussion and the eventual entry into force of this regulatory intervention.