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The aim of these articles is to keep our Clients and Associates updated about developments in the sector of Intellectual Property in general and our firm in particular. In this way, we wish to provide a broader view of the tools that the field of trade marks, domain names, patents, designs and related rights offers to entrepreneurs to enhance and protect their efforts in researching and developing new solutions and ideas.

Patent Dilution Recently Acknowledged Also by the Italian Supreme Court

In a long-standing dispute, started in 2008 between two Italian companies on one part and the well-known, much bigger companies Samsung Electronics Italia s.r.l. and Samsung Electronics Co. Ltd. on the other part, the Italian Supreme Court issued Decision No. 31170 on 9 November 2023.

The subject of this dispute was the infringement by Samsung of a patent, owned by one of the two Italian companies and licensed to the other one, concerning dual SIM phones.

In all grades of judgement of this complex 'David vs Goliath' dispute, the Samsung companies were found guilty of patent infringement and ordered to pay damages.

Apart from giving the encouraging signal to smaller companies that they can be victorious even against much more powerful entities, one of the most relevant aspects in the said decision by the Italian Supreme Court is the recognition of the so-called “patent dilution” and the related consequences in terms of damages, which is a relatively new concept now starting to consolidate in the Italian case law, too.

The Supreme Court has indeed confirmed what had already been acknowledged by the Court of Appeal, i.e. that the loss of value of a patent (or “patent dilution”) as a consequence of an infringement gives the patent owner the entitlement to a corresponding due compensation.

The recognition of patent dilution therefore introduces a further means for owners of patents valid in Italy to effectively defend their rights, even against big companies such as those of the Samsung group.

According to the Italian Supreme Court, not only do the infringing actions committed by competitors cause loss of profit, but they also affect the exclusive rights of patent owners by weakening their market position, and in some cases even irreversibly jeopardizing it, thereby reducing the potential profitability of their patents.

In view of this, compensation can be awarded based on a calculation of the royalties the patent owner might have received from their licensees over a given time period if the infringement had not taken place.

It should be noted in this connection that any form of overcompensation of damages is to be avoided. In other words, disgorgement of profits on one hand and actual loss compensation on the other hand can both be awarded only where they refer to different time segments.

Not only Italian but also foreign companies having commercial interests in Italy have therefore one more good reason to have their inventions patented in Italy. For more information or for assistance in obtaining patent protection in Italy, please contact us at email@interpatent.com