New criminal and administrative penalties for infringement introduced

Following a lengthy parliamentary procedure, the new 'anti-infringement package' has finally become law. The new legislation was devised by a working group set up by the high commissioner to combat counterfeiting and piracy a few months before his role was abolished (for further details please see "Position of high commissioner to combat counterfeiting abolished"). The relevant IP provisions are to be found in Articles 15 to 19 of Law 99 of July 23 2009, which was published in the Official Gazette on July 31 2009 and entered into force on August 15 2009.

 

Law 99 also renewed the mandate of the government to amend the Intellectual Property Code. The new mandate states that not only substantive, but also procedural provisions shall be revised.

 

The legislation that was passed is very different from that originally drawn up by the high commissioner - the initial text was radically changed during the first reading of the bill by the Senate.

 

The new legislation - in line with the recommendations of the high commissioner - increases the penalties for the infringement of IP rights. The penalties are now as follows:

If there are any aggravating circumstances (eg, infringement on a large scale), the penalties range from two to six years' imprisonment (see Articles 473, 474 and 474ter of the Criminal Code). A penalty has also been introduced for the infringement of denominations of origin of agricultural foodstuffs (see Article 517quater of the Criminal Code).

 

One issue is that certain provisions - but not all - apply only where the infringer "was aware of the existence of IP rights". This might violate the constitutional principle of equality, as similar situations will be dealt with differently. Arguably, this phrase is too vague and raises issues of interpretation: does it mean that the infringer must actually be aware of the existence of IP rights, or that it ought to have been aware of their existence? Similarly, does the provision refer only to registered rights, or does it also apply to applications?

 

Although the law allows the confiscation of infringing goods, it does not provide for a pre-trial procedure during which the goods might be destroyed, which would have resulted in a reduction in holding costs. Moreover, the possibility of applying for delayed seizure or controlled delivery(introduced by the high commissioner's working group) has been removed.

 

A positive change (which had already been introduced in the original text) is the amendment of Article 1(7) of Legislative Decree 35 of March 14 2005. Under the amendment, an individual who knowingly purchases counterfeit goods will be subject to a minimum penalty of €100. However, the maximum penalty has been reduced from €10,000 to €7,000. Nevertheless, this should facilitate the task of the administrative authorities in enforcing the law.

 

At a practical level, a noteworthy change is the amendment to the procedural rules laid down in Articles 120, 122 and 134 of the Intellectual Property Code. Although apparently minor, this amendment is significant from a procedural point of view in that it provides for an interim regime under which the amended provisions of the code may be applied to pending proceedings.