Dual Impact of Italian decree on trademarks of national interest: Protection or Constraint for Entrepreneurs?

The implementing decree recently issued by the Ministry of the Enterprises and Made in Italy (so called ‘MIMIT’) on historical trademarks of national importance raises both lights and shadows.

Published on July 3rd, the decree establishes criteria for the implementation for taking over the ownership and subsequent use of Italian trademarks of particular national interest and value by the MIMIT itself, implementing the provisions of art. 7 par. 5 of Law no. 206/2023 (the so-called ‘Law of Made In Italy’).

Let’s have a look at the noble aims and its critical issues.

The bright side of the decree: safeguarding Italian trademark heritage

The purpose of the decree is preserving the heritage represented by Italian trademarks registered or continuously used for at least 50 years, which enjoy a significant reputation and tied to national productive enterprises of excellence linked to our territory. The decree outlines two main course of action concerning:

• Trademarks from companies ceasing operation: if the General Directorate for Industrial Policy, Industrial Conversion and Crisis, Innovation, SMEs and Made in Italy expresses interest in taking over ownership, the company will grant the trademark free of charge.
• Trademarks presumably not used for at least 5 years: MIMIT may file an application to register the trademark in its own name and authorise ownership to domestic and foreign enterprises that intend to invest in Italy or transfer production foreign activities in Italy, by means of a free licence agreement for a period of no less than 10 years.

The dark side of the decree: burdensome requests and legal pitfalls for struggling companies

The implementation modalities are rather burdensome. Particularly:

1. Notification requirement: companies already in economic difficulties must notify the Ministry’s Directorate General of the planned cessation of activity, at least six months before the actual cessation. Such a request seems questionable, although not peremptory, given that an entrepreneur usually tries to prolong the closure of his business as much as possible, without being able to foresee its cessation in advance.
2. Costly legal proceedings: the Directorate General of the Ministry can file an action for non-use before the UIBM ‘in relation to trademarks for which it presumes non-use for at least five years that may be of particular national interest and value and, having ascertained the revocation for non-use ‘may file an application for registration with the Italian Patent and Trademark Office’. Companies, already in difficulty, could paradoxically find themselves exposed to complex and costly proceedings to defend the actual use of their trademarks.
3. Trademark portfolio public management: amongst the other perplexities, one would then have to wonder which pool of professionals, civil servants and managers in the Public Administration will be responsible for the portfolio of trademarks eventually collected by the MIMIT, and whether the costs of all this activity will actually be covered by the possible revenues.

Point to ponder

Despite the noble aims, the risks concealed behind the reform are at least threefold: (i) the initiative of the Public Administration could distort the game of free competition amongst companies; (ii) it could also present aspects of conflict with international and European provisions on revocation for non-use of the trade mark; finally, (iii) if the correct ways are not found to exploit those trademarks, the public administration will only be burdened with unnecessary costs. The real impact of the new provisions remains to be seen.

This newsletter is for the sole purpose of providing updates and general information and is not intended as legal advice on any particular or specific issue.

For clarifications or information, please contact the authors or your reference professional in the Intellectual Property area at our Firm.

Niccolò Ferretti, Partner
E: n.ferretti@nmlex.it
T.: +39 026575181

Valentina D’Adda, Trainee
E: v.dadda@nmlex.it
T.: +39 026575181

Publish date: 30/10/2024