SIB - Società Italiana Brevetti

Italian provisions are incompatible with Community law inasmuch as they exclude from copyright protection designs that were in the public domain before 19 April 2001, according to the opinion the Advocate General of the Court of Justice of the European Union in proceedings between two Italian firms concerning rights in the Arco lamp.

A dispute over rights in the Arco lamp – a milestone of 1960s Italian design - between Flos, manufacturer of the original model and Semeraro, importer of copies made in China, has given the Court of Justice of the European Union (EU) a chance to assess whether Italian provisions implementing the EU directive on the legal protection of designs are actually compatible with EU law.

Before EU Directive 98/71 on the legal protection of designs (the directive) was implemented into national law, it was debatable whether designs were protected under Italian copyright law, since this depended on whether the artistic value of the work was separable from its industrial character, an often disputed requirement. The Italian law enacting the directive, in force since 19 April 2001, provided that copyright applies to industrial designs which have creative character and artistic value per se, and that design registration is combinable with copyright protection. The law also provided for a 10-year transitional period concerning designs that were not eligible for copyright protection before entry into force of the law: for 10 years copyrights could not be invoked against manufacturers who had started producing or marketing products based on designs that were in the public domain before 19 April 2001 either because design rights had expired, or because they were not eligible for copyright protection. The 10-year transitional period was later struck down by the European Commission as incompatible with EU principles. A subsequent Italian law thus cancelled the transitional period, and provided that copyright protection simply does not apply to products based on designs whose rights had expired or that were not eligible for copyright protection before 19 April 2001. The same law extended copyright protection from 25 to 70 years, the term provided for by EU law.

Flos, which holds property rights in the Arco lamp designed in 1962 by the Castiglioni brothers, brought proceedings against Semeraro for importing and marketing in Italy a lamp called Fluida which copies all the main design features of the Arco lamp. Flos maintained that Semeraro had breached copyright law as well as rules on unfair competition, causing Flos to lose profits. In 2006 an Italian court ordered the seizure of the Fluida lamps and barred Semeraro from further imports or sales of the model. However at the time the acts took place, the Arco lamp had fallen into the public domain, since design rights under Italian law had expired. Semeraro might therefore have legitimately copied the Arco lamp, that would theoretically have enjoyed copyright protection under the law enacting the directive, but fell under the 10-year transitional period which was later annulled.

The district court of Milan referred the case to the Court of Justice of the European Union (the Court) submitting several questions aimed at establishing whether the various laws, some issued during the proceedings, are compatible with EU law.
The district court of Milan essentially asked the court to establish whether there exists a conflict between EU law and provisions of the Italian law enacting the EU directive which provide that
a) designs that were in the public domain before the date of entry into force of the provision do not enjoy copyright protection;

b) copyrights in a design are annulled, albeit for a transitional period, based on the fact that a third party has legitimately acquired the right to manufacture and market a product that copies a design that had fallen into the public domain.

On 24 June 2010 the Advocate General (AG) of the Court issued his preliminary opinion in case C-168/09, and advised the Court to give the following answers:

a) the provision of Italian law which bars from copyright protection those designs that have fallen into the public domain before 19 April 2001 is incompatible with EU law. The AG pointed out how Directive 98/41 must be read in combination with Directive 93/98 which has harmonised the term of protection of copyright in EU member states. The combined reading of the two directives leads the AG to conclude that it is not an option for member states to provide that designs should enjoy both copyrights and design rights: it is an objective which member states must comply with. Such an objective cannot be reached if member states are left free to decide whether or not to make designs fallen into the public domain eligible for copyright protection;

b) it is not incompatible with the directive to provide for a reasonable transitional period during which manufacturers who had rightfully produced and sold a product based on a design which had fallen into the public domain before the entry into force of the law enacting the directive may continue to market that product. It is up to the national courts to define the reasonable period necessary to ensure that rights acquired by third parties are safeguarded. The AG takes the view that in the case at issue the period during which Semeraro continued to use the design, between the term for enacting the directive which expired on 28 October 2001 and the date of the seizure order of the Fluida lamp, issued on 29 December 2006, is a reasonable period which balances the rights acquired legitimately by third parties such as Semeraro with the need to ensure that one of the directive’s objectives – the application of copyrights to designs – is complied with.

In his opinion, the AG refers to the court’s ruling of 29 June 2009 in Butterfly Music (C 60/98), in which the court took the view that the application of copyright terms provided for by directive 93/98 may have the consequence, in member states where previous copyright terms were shorter, of protecting once more works that had fallen into the public domain. At the same time, the court recognised the need to protect the legitimately acquired rights and expectations of third parties who had in good faith started to use works fallen into the public domain. The AG advises the court to apply the same reasoning.

Should the court’s decision follow the AG’s opinion, it could be necessary to amend the Italian intellectual property code, into which the provisions enacting directive 98/71 have been transferred. Hopefully the decision will in any case clarify the Italian legislative framework which concerns a vital industry for the national economy. This case should also be watched closely by non-Italian companies interested in manufacturing or marketing in Italy designs that fall under Italian and EU law, since the outcome will obviously have an effect on the right of third parties to legitimately reproduce originals after the expiry of design rights.

16 July 2010