Italian Supreme Court provides guidance on equitable compensation for damages under Intellectual Property Code

Federico Manstretta reports on the recent Italian Supreme Court’s judgment Cappellotto S.p.A. vs. Farid Industrie S.p.A., which provided guidance on equitable compensation for damages in cases of intellectual property rights violations. This decision is an important step in Italian case law, demonstrating an increasing willingness by the courts to award significant compensation to IPR holders.

Background

A company selling industrial vehicles for cleaning sewers, ducts and vacuum loading dusts and solids sued a competitor that marketed vehicles which implemented a patent owned by the plaintiff without a license.

The dispute went through first and second instance judgements with damages a key subject of the dispute. It ultimately reached the Supreme Court, where the court ruled on issues relating to the measure (quantum) of compensation for damages.

Compensation for damages (and disgorgement of profits) under Italian law

Art. 125, para. 1 and 2 of the Italian Intellectual Property Code (“IIPC”) provides two alternative criteria to determine the measure of compensation for damages: