Published article on World Trademark Review (n.22 December/January, 2010)
The Italian rule of law about unfair practice in the course of trade and the rewriting of the regulations concerning deceitful and comparative advertising are included in the D.lgs. no. 206/2005 (known as the Consumers’ Code, abbreviated to cons. code) and D.lgs. 145/2007.
The Consumers’ Code concerns all unfair practices in the field of trade by professionals which result in damages to the consumers.
The D.lgs. 145/2007 does instead cover the protection of professionals and the negative consequences of deceitful advertising and the lawfulness conditions of comparative advertising.
According to art. 18 lett. d) of the cons. code, a commercial practice is “an action, omission, behaviour, declaration, commercial communication (including advertising and the product commercialization) initiated by a professional, related to the promotion, sale or supply of a good or service to consumers.” The new rules apply to those commercial practices happening before, during and after the commercial operations relating to a product or service. Besides advertising, promotions, communications, contracts and offers are also subjected to these rules.
Art. 20 subs. 3 cons. code bans “all unfair commercial practices, particularly those that reach wider groups of consumers and are capable of misrepresenting on a wide scale, the economic behaviour of one group of consumers that can be easily traced, a group that is particularly vulnerable to the activity or the product it refers to because of their mental or physical weakness, of their age or gullibility, in such a way that the professional could reasonably foresee. These are evaluated in the perspective of the average member of such a group” and explicitly allows “the common and legitimate advertising activity consisting of excessive declarations or in declarations that should not be taken literally.”
All unfair commercial practices are defined as deceitful or aggressive.
Practice in the course of trade may be considered aggressive, considering the circumstances of art. 24 cons. code, if it limits or is suitable to considerably limit the freedom of choice and behaviour of consumers through molestations, coercion, in such a way to lead such consumers to choose something they would not have chosen otherwise.
In contrast, Commercial practice can be considered deceitful if it includes incorrect or false information (art. 21 cons. code). In addition, when the information is correct, its entire presentation may persuade or be capable of persuading the consumer to make a mistake, leading him towards a decision he would not have taken otherwise, taking into account one or more elements such as the existence or the nature of the product and its main characteristics. We can also another circumstance of deceitful practice of trade, namely, omission of relevant information that the average consumer would need in order to take a knowledgeable decision on a commercial basis (art. 22 cons. code).
The practice mentioned in art. 23 of the cons. code must be considered deceitful. They are statements not corresponding to the truth made by a professional, who is the signee of code of conduct; the exhibition of a quality or collective trade mark or an equivalent trade mark without having obtained the necessary authorization; addressing consumers to purchase products at a given price without revealing the existence of specific reasons.
For this reason, the use of a deceitful trade mark – according to the former art. 14 of the Legislative Decree 30/2005 (Industrial Property Code) which summons for example a certain nature of the product that cannot be verified for those products it was registered for – can be considered as damaging towards the rights of the consumers and can be banned according to the aforementioned regulation.
In the same way, the unfair use of a collective trade mark which guarantees the origin, quality or the origin of certain products, besides being an illegal counterfeit, constitutes a deceitful commercial practice detrimental to the consumers’ rights.
As mentioned above, the regulations specifically concerning deceitful and comparative advertising that applies in a direct way to the relationship between competing professionals are included in the Legislative Decree 145/07.
Art. 1 subs. 3 Legislative Decree 145/2007 states that “advertising must be clear, truthful and correct.”
Particularly, art. 5 of the legislative decree 145/07 states that advertising must be clearly recognisable as such. The press advertising must be distinguishable from all other forms of communication with the audience, with graphic results that can be easily perceived. Any form of subliminal advertising if forbidden.
As far as the deceitful advertising is concerned, this is defined as the advertising that “in some way, including its presentation, is suitable to lead physical or juridical people it is aimed at or that it can reach, towards a mistake or that according to its deceitful character, can prejudice their economic behaviour and that for these reasons, can be capable of damaging a competitor”.
Among the elements to be taken into consideration for the evaluation of the deceitfulness of advertising, there are the characteristics of the goods and services and their prices, the terms and condition of supply together with the qualification of the advertising operator such as the identity, property, abilities, intellectual and industrial property rights, any other right on intangible assets relating to the company and all premiums or awards.
As far as the comparative advertising is concerned, art. 4 Legislative Decree 145/2007 states that it must always compare goods or services that satisfy equal needs and face the same objectives, without causing confusion between different competitors, denigrating and causing discredit to other labels. Particularly, art. 4 lett. g) 145/2007 states that comparative advertising is illegal when the advertiser “gains an unjust advantage from the notoriety connected to the label, the commercial name or any other distinctive sign of a competitor or original names of competing products.”
We need to underline that all illegal actions included in the Legislative Decree 145/2007 will have – in the majority of cases – a media relevance also in the consumers’ group, as both deceitful and comparative advertising is incorrect and capable of falsifying in a relevant way the economic behaviour of final consumers.
The suppression of all illegal actions in the aforementioned decrees is delegated to the Market and Competition Guarantor, who besides having the power to forbid all illegal behaviours, can also impose monetary fines ranging from 2.000 euros to 500.000 euros. It is possible to appeal against the Guarantor’s sentence in the regional administrative Court.
Furthermore, it is necessary to underline that on the subject of commercial communications both for art. 27 third cons. code introduced by the Legislative Decree 146/2007 and art. 9 of the Legislative Decree 145/2007 state the possibility to join private bodies which apply self-discipline codes.
In Italy, it is very common to use the self-discipline Code for commercial communication purpose. Such self disciplinary codes are enacted by the main category unions, and apply to all the major advertising operators, which reached the 45th edition, in force from 21st April 2008 (the first is dated 12th May 1966). The self-discipline code is applied and interpreted by arbitrary bodies instituted by the Code, the “Giurì” in case of disputes or the Control Committee, to which it is possible to ask for a precautionary opinion about the lawfulness of an advertising campaign. Applying to the Court Honour in charge of the Code is highly advantageous because of the rapid decisions.
Particularly, the Code includes some general rules about correctness and explicitly forbids; all deceitful commercial communication (art. 2); all disguised commercial advertising in journalistic forms (art. 7); the exploitation of superstition, credulity and fear (art. 8); all commercial communications (art. 9) against decency, civil and religious morals and the person’s dignity (art. 10); all commercial communications that may damage children and adolescents (art. 11); imitation, especially if it can create confusion and exploitation of the name, label and notoriety of third parties (art. 13) and the denigration of third parties’ activities, companies and products (art. 14).
As far as the comparative advertising to the comparison is concerned, art. 15 of the Code states that it is allowed if it is correct and does not deceive consumers. Moreover, it should not generate risk of confusion, discredit and denigration, it should not imply the generation of an unfair advantage from other parties’ notoriety. It should show both economic and technical basis of characteristics and advantages of the goods or services which are the subject matter of the commercial communication. It is required that it compare essential characteristics that are relevant and technically verifiable of goods and services owned by competitors, which satisfy the same needs and have the same objectives.
Finally, it is necessary to underline that the entrepreneur damaged by another party’s unfair commercial communications, can apply – apart from the Guarantor and the Court Honour, also to ordinary Courts through an action of unfair competition, asking for the inhibition of the illegal action and a compensation for damages according to art. 2598, 2599 and 2600 of the Italian Civil Code.
For example, the Courts of Turin has recently declared that “ broadcasting a TV commercial where an anti-wrinkle product is compared to the competitors’ products in such a way to suggest to consumers that only the first one “keeps its promise” using allusions to generic clinical studies, and based on comparison between different kinds of products should not be allowed. That is because such an illegal commercial uses the conditions of denigratory unfair competition, together with the illegal use of other parties’ trade mark”. (Court of Turin Ord. 28/05/2008).