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Italien Teil2/2 Avv. Aldo Levi

II. Procedural rules (Private International Law / International Civil Procedure Law)

  1. Which principles are applied to solving problems of private international law?

a.Which are the general rules of your country’s international private law (law of conflict of laws) applicable to unfair competition (e.g. int. private law of torts) and what do these rules state?

The Italian legal system does not have specific rules of conflict of laws on unfair competition. However belonging this matter to the field of tort liability, one should refer to the proviso of international private law which regulates this general topic. Until 31 August 1995, sec 25 2nd para of the Preliminary Provisions to the Italian Civil Code was applicable, whereby non contractual obligations were regulated by the law of the place where the fact originating such obligations occurred. Starting from 1st September1995 such proviso was overruled by sec 62 of Law no. 218 of 31 May 1995 which established that, in matters of tort liability, the applicable law is that of the State where the (harmful) event hastaken place or, where the injured party has expressly indicated such preference in court, that of the State where the fact causing the injury has taken place.

Traditionally, the Italian courts have not univocally interpreted sec 25 2nd para cited above on unfair competition matters. Essentially, attempts have been made to avoid applying foreign lawsby resorting to the so called theory of the action (which gives predominance to the place where the conduct has taken place), or, in relation to the specific characteristics of the case, to the theory of the event (which gives predominance to the place where the harmful event has occurred): eventhough the Italian courts have usually stated that, in matters of competition law, the locus commissi delicti is that where the action has actually taken place. For instance the Italian Supreme Court, in its decision no. 9410 of 11.11.94, established that “when an activity of unfair competition has occurred in Italy, eventhough not exclusively, such activity is subject to Italian law”(which is the law of the place where the action, even partially, has taken place).

b. Are there any specific limitations or modifications to these rules with respect to unfair competition, e.g. the sole application of the substantial law of the marketplace?

In opposition with the last mentioned position, some foreign authors have developed the theory of <the remote acts> “applicable to all those acts likely to produce harmful consequences in a place other than that where they were performed. Such acts are carried out by means of mail service or of advertisements divulged abroad through the press or the radio or television broadcasts”. According to such theory, the place of reception of the mail orof the broadcasts and that of introduction of the products in the market become relevant because they supply the criterion for deciding the applicable law to a certain act of unfair competition. "The adoption of the theory of remote acts leads to the conclusion that the applicable law to unfair competition is that of the country in which the competition takes place, that is, the market-country". Moreover, under such theory, the place where the agent is located would be irrelevant, since, hypothetically, could have been chosen intentionally in view of the particular favour granted by the laws in force therein.

In Italy since sec 62 of Law no. 218/95 came into force, the solution to the question of the applicable law to matters of tort liability lies in the fact that the courts have to apply the law of the place where the harmful event has taken place, which, in unfair competition cases, is very close to the law of the marketplace.

c. If so, are there any proposals how to determine or restrict the marketplace with respect to cross border electronic commerce over the Internet?

It may be stated that “cross-border wrongful acts committed through the Internet are at present subject to the rules of international private and procedural law in matters of tort... liability”, in particular to sec 62 of Law no. 218/95 cited above, the first para of which establishes the applicability of the law of the country where the (harmful) event has taken place, to be considered as the “place where the wrong has taken place in its entirety" (the so called theory of the <harmful> event).

“In order to ascertain the applicability of said principles to situations arising from the diffusion of messages through the Internet, one may consider that <the place where the harmful event has taken place> may be identified in the place where the message has been downloaded, that is, the place where the injurious message has been received, read and perceived by the other Internet users”. According to sec 62 1st para of Law no. 218/95, second part, “the injured party shall be entitled to choose the <law of the place where the fact causing the injury has taken place> which shall coincide with the place where the data were originally entered (loaded) into the net (uploading)”.

Let’s think of "a typical tort case that may occur in the Internet: a French citizen, using the site of a German provider, unlawfully uploads a work of an Italian author, which is, then, copied, by downloading the material into their own units, by various users located in different countries and connected with the same site.... Now, assuming that the author files a law-suit in Italy, the law applicable to the wrong ... shall be, at plaintiff’s choice, ... the law of the country where the author claims to have suffered the injury <place of downloading>, e.g. the Italian law if he deems to have suffered an economic damage in Italy or the French law (if the subject who has uploaded the work is known) or the German law (law of the country where the provider is located), considering these two latter laws as those of the countries where the fact that caused the injury has taken place <place of uploading>.

  1. May domestic competitors be subject to the national rules of competition law, even though they only advertise and compete in foreign markets?

According to sec 62, 2nd para of Law no. 218/95 “where the tort involves only citizens of a same country, residing in such country, the law of such country shall apply”. Consequently, the criteria set forth in sec 62, 1st para are superseded in view of the existence of the “double condition of the common citizenship and residence of the parties in the same country of which they are citizens”: in such case the law of said country shall apply.

This principle applies also to wrongful acts carried out by means of the Internet. Therefore, according to sec 62, 2nd, an act of unfair competition occurred abroad between two Italian entrepreneurs residing in Italy is subject to Italian law.

  1. In the case of an act of unfair competition in more than one state, could a competitor (meaning a competitor in all of these states) recover damages applying one single substantial law, or would his claim be governed by a bundle (mosaic) of different substantial laws, e.g. the law of each marketplace for the damage occurring in that state? Would domestic courts have jurisdiction over the total claim?

This is the case of the multistate delicts, a situation whereby an action produces multiple harmful consequences of the same kind in various legal systems. In the matter of unfair competition this is true mainly in relation to those wrongs committed through mass communication means (radio, press, etc). In situations of this kind, it has always been recognized that every legal system of the territory where the act has occurred has the power to decide whether such act is illegal or not (principle of territoriality of the law of unfair competition).

On one hand, if the plaintiff sues for damages, he shall not be entitled to be compensated for all the damages suffered in the various legal systems on the basis of the evaluation of the wrong made by one single legal system. On the other hand such plaintiff shall be entitled to obtain a total compensation, but for that purpose he shall have to assess the damages suffered in each State, according to the law of each one of the States where such damages have occurred. Consequently plaintiff’s claim shall be governed by a bundle (mosaic) of different substantial laws, i.e. by the law of each market place for the damage occurred in that single State.

With regard to the additional query (“would domestic courts have jurisdiction over the total claim?”), may we refer to para II.2.g.

  1. Is there any case law in your country on the influence of sec 30 of the EC Treaty on national competition law?

Pursuant to sec 30 of the EC Treaty, “quantitative restrictions on imports or any other provision of equivalent effect are prohibited among the member States”. Moreover, the subsequent sec 36 admits only such restrictions that are justified by general needs of public interest or of protection of industrial and commercial property, provided that such prohibitions or restrictions do not constitute an arbitrary discrimination or a concealed restriction to trade between the member States.

The “Cotonelle” case should be mentioned in answering the present question. The Court of Appeal of Milan, reversing the judgment of first level, established that the trademark “Cotonelle” for toilet paper and tissues was void because of its deceitfulness, since, by evoking the presence of cotton, was misleading for the consumer. The use of the contested trademark, then, was forbidden in Italy, whereas the trademark was still valid in other EC countries. When Graffione, a wholesaler, which had been prevented from stocking Cotonelle goods because of the Court’s prohibition, found that a certain Italian supermarket was selling goods under the “Cotonelle” trademark imported from France, where their sales were legal, summoned the importer Fransa before the Chiavari court, claiming that the imports by Fransa constituted unfair competition and that said imports were to be banned.

The Court of Justice, addressed by the Court of Chiavari pursuant to sec 177 of the EC Treaty, affirmed that secs 30 and 36 of the EC Treaty do not object, according to the rules of unfair competition and for reasons of consumers' protection, that the marketing of products coming from one member State where such products are legally marketed be prohibited to all the economic operators, on condition that this restriction be necessary to secure the consumers’ interests and be proportionate to such purpose. To this effect, it is necessary to ascertain if the risk of misleading the consumers is sufficiently serious to prevail over the needs of the free circulation of goods. If not, secs 30 and 36 of the EC Treaty would prevent that (national) protective measures against unfair competition be enforced in order to stop such marketing.

  1. Is there any discussion about a “country of origin principle” to determine the applicable competition law in cross border electronic commerce?

The general rule in unfair competition cases, whereby the applicable law is that of the marketplace, has some exceptions, e.g. (i) the case of cross-border telecasts (including advertising telecasts) which are subject to the law of the “broadcasting place” pursuant to the EC Directive no. 89/552 and (ii) the judgment of the Court of Justice of 7.3.1990 [case C-362/88, Soc Gb Inno Bm c. Confédération du commerce Lussembourgeois] which, departing from the criterion of the law of the marketplace, has established that the advertising <the case was dealing with brochures> originated from a EC member State (Belgium) and destined to another member State (Luxembourg) should be subject to the law of the first State (i.e. the broadcasting State) in view of the fact that the <unfair competition law> of the second State was in conflict with the principle of the free circulation of goods.

This is true also in the case of advertising through the Internet: the provider shall not be required to know and comply with all the laws on advertisement of the world. Therefore, all advertising legally diffused abroad and received in Italy shall be subject to the laws of the broadcasting country (i.e. to the laws of the site from where the message has been transmitted), unless the server has fraudulently constituted the site in some informatics heaven.

h.Is there a choice of law between competitors possible in unfair competition matters?

As mentioned in clause II.1.a above, according to sec 62 of Law no. 218/95, as an alternative to the law of the place where the harmful event has taken place, the injured party may choose to apply the law of the place where the fact causing the injury is occurred. However the Italian scholars have raised the issue of the admissibility of an agreement between the interested parties with the purpose of exercising an option in favour of the law of the place where the fact causing the injury is occurred, or, on the contrary, of waiving said option. In particular, the injured party could promise the responsible of the tort that he would waive such option, or, conversely, that he would exercise it. In this regard, neither the Law <no. 218/95>, nor its accompanying <official> report gives any answer and nothing indicates that such an agreement would be prohibited. However, it is important not to overlook the fact that the very purpose of such option is that of protecting one of the parties <that is, the injured one>. Therefore, the waiver of the option may not be deemed presumed and there should be evidence that the parties have consented thereto. Besides, considering the orientation existing on this matter in other legal systems, any agreement providing for such waiver could be admitted only if entered into after the harmful event has taken place.

  1. How can national regulations be enforced in other states?
  1. Which are -a part of the Brussels convention - the principles of international jurisdiction in unfair competition cases in your country; is there a distinction between general and specific jurisdiction? Are there specific limitations or modifications with respect to unfair competition law (e.g. jurisdiction is limited to the country / countries of the marketplace)? Is there a forum non conveniens doctrine or similar doctrine, and, if so, is it relevant to unfair competition cases?

Pursuant to sec 3, 2nd para of Law no 218/95, Italian jurisdiction applies also in view of the criteria established by the Brussels Convention of 27 September 1968 on civil and commercial matters. In this respect, sec 5.3 sets forth that the courts of the place where the harmful event took place shall have jurisdiction on “tort and quasi-tort matters“. This statement was interpreted by the EC Court of Justice, in its judgment of 30 November 1976, in two ways, in the sense that it refers both to the place where the harmful event took place as well as to the place where the fact causing the injury has taken place. It now becomes evident that there is no specific criterion for deciding which court has jurisdiction in matters of unfair competition, neither in the Italian legal system nor in the European Community one. Therefore, on the issue of jurisdiction, it is necessary to refer to the case law on tort matters, the criteria of which shall be extended to unfair competition controversies.

At least three important criteria for determining jurisdiction laid down by the Italian scholars and the case law are the following:

a)the forum of the action (where the counterfeit goods have been produced, the imitation has been carried out or the disparaging news or the untruthful advertising were put into circulation);

b)the forum of the event (where the counterfeit goods were introduced in the market or the disparaging news were spread or the untruthful advertising became known to the consumers);

c)the place of the harmful event i.e. the place where the economic impoverishment of the person claiming the damages occurred; a place which, in the specific case [Supreme Court judgment no 6499 of 9.6.1995 Dunhill Ltd vs Tivoli Group], has been identified in the one where the company had its registered office.

The theory of forum non conveniens, developed in common law systems, provides that a judge may discretionary decline his jurisdiction when the matter is not sufficiently connected with the forum, eventhough he may consider himself abstractly competent according to positive rules. Nevertheless, in civil law countries said theory appears to openly conflict with the civil law systems and the Brussels Convention which are based on specific connecting factors.

  1. Are there different rules on jurisdiction in interim or injunctive proceedings?

Pursuant to the rules of Italian civil procedure, injunctions are “provisional measures issued by the judge during a lawsuit in anticipation of the final judgement as well as conservative remedies issued in order to preserve rights or property”.

In this matter, according to sec 10 of Law no 218/95, “the Italian jurisdiction subsists where a measure has to be enforced in Italy or when an Italian judge has jurisdiction on the merits”. Consequently, without prejudice to the authority of the Italian judge to issue injunctions in all cases where he is competent on the merits and, therefore, in cases where he is competent to decide the controversy brought before him, said Italian judge – eventhough lacking jurisdiction on the merits of the controversy – has the authority to issue injunctions when the latter have to be enforced in Italy.