Published article on World Trademark Review (n.17 February – March 2009)
Trademark law is based on the principle of territoriality which limits the rights to a trademark to the country in which such mark is registered or used. Consequently, two companies can use identical marks in geographically distinct areas and, in specific circumstances, also within the same country, if such use does not create a likelihood of confusion in the mind of the public as to the origin of the goods and services at issue.
The principle of territoriality has its foundation in the Paris Convention for the Protection of Industrial Property. The convention establishes a ‘national treatment’ principle – that is, trademarks are recognized as having a separate existence in each sovereign territory in which they are registered or legally recognized as marks. Therefore, except marks that can be considered well known pursuant to Article 6bis of the convention, use or registration of a mark in one country or jurisdiction does not grant rights or liabilities elsewhere. However, the Internet has rendered borders irrelevant. A domain name must be unique because it serves as an address and must always lead to the computer or group of computers that correspond to that address. Thus, only one domain name can be identical to a specific mark. In principle, such a domain name is reachable and visible from all over the world. Hence, domain names are not subjected to the principle of territoriality and are in fact antithetic to such a principle.
The conflict between the Internet and trademark law is thus clear. In which jurisdiction can territorial rights be enforced and respected if the Internet does not observe any boundaries and borders?
In view of such a conflict, this article reviews the Italian approach to the issue ofcourt jurisdiction and competence over disputes that arise on the Internet (ie, trademark infringement and other illicit acts, including unfair competition). This article does not discuss cybersquatting, for which the Uniform Domain Name Dispute Resolution Policy of the Internet Corporation for Assigned Names and Numbers and policies applicable to country-code top-level domains (including the ‘.it’ domain) can now be considered standard remedies. In general terms, and with reference to trademark infringement and unfair competition, the territorial competence of the Italian courts is founded on either:
• forum rei – that is, on the basis of the location of the defendant’s residence, domicile or home (Articles 18 and 19 of the Code of Civil Procedures); or
• forum commissi delicti – that is, on the basis of the place where the illicit act took place or was about to take place (Article 20 of the code).
If jurisdiction is founded on forum commissi delicti, but the locations where the infringement and where the damage occurred are different (eg, a newspaper’s print room and a newsagent), the Italian courts are divided as to the basis of the courts’ competence. Some courts have ruled that the court competent for the former (eg, the newspaper’s print room) has jurisdiction, while other courts have held that the court competent for the latter (eg, the newsagent) has jurisdiction. Most courts have held that if the damage occurs in more than one place, the court that has jurisdiction over the territory where the first incident causing damage to the plaintiff occurred is competent. In the internet context, locating the place of infringement is difficult because the illicit act was committed on the Net, but spreads its potentially damaging effects over the whole national territory and beyond; it is impossible to ascertain the physical place where the first amaging effect took place.
As for the press and television, jurisprudence has partially considered the problems connected with territorial competence and has resolved them as follows:
• In relation to potentially damaging information published by the press, the relevant place is not where the offended party lives and works (which is, however, relevant in relation to damages and settlement thereof); instead, the relevant forum is where the printing of the newspaper, periodical or book occurred; and
• In relation to illicit acts perpetrated on television, the competent court is the one in whose jurisdiction the television studios that made and broadcast the programme are situated, since it was there that the illicit act occurred in its entirety. The jurisprudence concerning internet matters is still unsettled. Italian courts have reached no general agreement on the determination of the locus commissi delicti as the summary of some judgments will show.
Competence of Italian courts
In a judgment of January 29 2001 the Genova Court held that an illicit act is to be onsidered as being committed in the territory of Italy when the deed or its consequences occurred, at least partly, in that country.
The case at issue concerned the broadcast of libellous messages through internet websites. Since such messages were received also in Italy, the court held that the lawsuit could be heard by an Italian court.
In the libel case of Spartakus v Turbanitalia (May 2 1998), the Vicenza Court held that the competent court is the one in the city where the server that broadcast the incriminating notice is located. Similarly, in Banca del Salento v Restaino (November 16 2000), the Lecce Court held that the competent court is the one that has jurisdiction over the location of the server used to upload the infringing pages.
However, in Banca 121 v Restaino (May 8 2002), the Italian Supreme Court held that the competent court in a libel case is the one that has jurisdiction over:
• the wronged party’s domicile (in this case a workplace); and
• the place where the negative effects of the offence to its reputation will be felt.
In Andala Umts SpA v Marcialis (February 28 2000), the Cagliari Court held that territorial competence is extended to all Italian courts located in places where internet access is possible, inasmuch as the infringement can be viewed in any such place. As access is possible from anywhere, the damage to a person’s rights must be considered to have occurred in all places to which the damaging information is distributed. Thus, in accordance with Article 20 of the Code of Civil Procedures, and with reference to the forum commissi delicti, a court is competent to hear a case wherever the information at issue can be read. This ruling differs from the decision of the Genova Court mentioned above. The Genova Court simply determined the circumstances in which Italian courts could be competent; it did not hold that all Italian courts are competent as far as internet issues are concerned.
Illicit activity location
In a decision of June 14 2000, the Naples Court did not deem relevant the place(s) of distribution or marketing of the infringing goods. Instead, the court focused on their place of production, thus avoiding the problem of territorial competence since the Internet was not to be taken into consideration.
Server location – revisited
In PFI Promotion Franchising v Initalia Network (December 18 2000), the Verona Court held that an online act of infringement is committed where the website is managed – not where the infringement of rights takes place. This is in complete opposition to what the Cagliari Court held (see above). One of the weak points of the Verona Court’s interpretation, though, is the difficulty of identifying the place of management of an internet website as it is not identifiable as the legal place of business of the company, nor the residence or domicile of a physical subject.
Domicile of the wronged party
In Affari Fisco-Finanza v Marketing Research (November 6 2000), the Ordinary Section of the Messina Tribunal held that competence is given to the courts that have jurisdiction over the damaged party’s head office, residence or domicile. Thus, the legal action can be linked up to the place where the infringing act causes concrete damage.
This line of reasoning was partly followed by the Verona Court in Fondazione Arena di Verona v Albertin (June 22 2001).
Here, the court held that in case of violation of exclusive rights concerning an internet domain name and related acts of unfair competition, territorial competence is determined according to the place where the damaging deed was done or, at least, the residence or place of business of the damaged party.
In FM v AR (March 26 2004), the Naples Court confirmed that in case of infringement online of a third party’s unregistered trademark, the territorial competence of the court is determined on the basis of either:
• the domicile or residence of the plaintiff; or
• the place where the business of the plaintiff is established since it is the place where the damaged ‘property’ is located.
One should remember that once the geographical jurisdiction has been established on the basis of one of the criteria above, the proper specialized court must be selected accordingly. Since 2003 specialized IP courts have exclusive jurisdiction in Italy to hear trademark infringement and unfair competition cases.