Trademark owners could benefit from class action proposals

Italy

The Permanent Commission of Justice of the Italian Chamber of Deputies has approved a draft proposition to amend the Consumer Protection Act 1998. The law, as it stands, gives consumers' associations standing to (i) sue in the event of unlawful acts carried out against a large number of consumers or users, and (ii) ask the competent court to adopt measures to correct or eliminate the harmful effects of the unlawful acts. However, it does not provide for any damages.

The draft amendments are as follows:

  • Consumers' associations may ask the court to award damages and order that the sum be paid directly to the individual consumers and users concerned.

  • The court may be asked to approve a settlement agreement reached by the parties in court.

  • Following the publication of the ruling or approval of the settlement agreement reached in court, individual consumers have the right to bring an action against the wrongdoer, asking the court (i) to verify and declare that they possess the requisites identified in the aforesaid ruling or settlement agreement, and (ii) to determine the exact amount of damages or indemnity awarded thereunder.

The decision rendered by the court on request of individual consumers will be immediately enforceable against the wrongdoer.

Trademark owners cannot normally avail themselves of the outcome of a class action. Similarly, it is difficult to envisage that trademark owners would be named as defendants in a class action brought by consumers' associations.

However, several provisions of law (from both a criminal and civil standpoint) consider the potential harmful effects for consumers of misleading use of trademarks and trade names (eg, the sale or offer for sale of counterfeit goods, or goods bearing infringing or misleading trademarks and trade names). In such cases, the consumers' associations would be entitled to bring class actions against infringers whose behaviour is likely to damage a large number of consumers.

In this scenario, trademark owners could indirectly benefit from initiatives taken by consumers' associations to protect consumers' and users' rights. Cooperation between consumers' associations and rights holders could further increase the potential benefits of the introduction of a class action system in Italy.

Francesca Rolla, Lovells, Milan

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