Influencer Marketing project

28 mayo 2018

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It is often the case – in practice – that an ongoing commercial relationship builds slowly over time through a series of sales agreements, without the parties ever signing an actual distribution agreement to set down their respective rights and responsibilities.

At first blush this might appear to be a good thing: one can sidestep being bound, especially long-term, to the other party. But on closer scrutiny the solution becomes problematic, especially for anyone operating internationally.

One of the key issues that arises when an international contractual arrangement is not in writing, is identifying the court with jurisdiction over any dispute arising therefrom. In the European Union, the issue is resolved by the provisions of Regulation 1215/2012 (“Brussels I recast”). Pursuant to Article 7 of the Regulation, as an alternative to the defendant’s courts, jurisdiction in a contractual dispute may lie with the court in the place of performance of the obligation in question. Next to this general rule are two criteria to identify the “place of performance”, differentiated according to the type of contract at issue. For a contract for goods, it is the place of delivery for the goods; in a contract for services, it is the place where the services are provided.   

Thus, to identify the court with jurisdiction, it is crucial that a contract fall under one of these categories: goods or services.

No doubt this distinction is quite simple in many circumstances. In the case of a distribution agreement, or of a commercial concession agreement, the issue may become thorny.

The European Court of Justice has analysed this issue on a number of occasions, most recently in their judgement of 8 March 2018 (Case no. C-64/17) following the request for a preliminary ruling from a Portuguese Court of Appeal. The parties to the action were a Portuguese distributor, a company called Lusavouga, and a Belgian company called Saey Home & Garden, that produced articles for the home and garden, including a line of products branded “Barbecook”.

Following Saey’s decision to break off the commercial relationship – notice of which was sent in an email dated 17 July 2014 – Lusavouga brought action in Portugal seeking compensation for the unexpected termination of the agreement, and goodwill indemnity. Saey raised a plea of lack of jurisdiction of the Portuguese court, citing their general conditions of sale (mentioned in their invoices) which required that a Court in Belgium be competent for dispute resolution.

The facts thus presented two issues to be resolved in light of the Brussels I recast Regulation: deciding whether a jurisdiction clause in a vendor’s general terms and conditions pursuant to Art. 25 of the Regulation shall apply, and, if not, choosing the court with jurisdiction under Art. 7 of the Regulation.

Shall a jurisdiction clause contained within a vendor’s general terms and conditions apply to a distribution relationship?

The supplier company apparently considered their course of dealing with the Portuguese retailer nothing more than a concatenation of individual sales of goods, governed by their general terms and conditions. Consequently, they argued that any dispute arising from the relationship should be subject to the jurisdiction clause identifying Belgium as the court with jurisdiction under those terms and conditions.

Thus, a determination was needed on whether, under these facts, there was a valid prorogation of jurisdiction under Article 25, paragraph 1 of Regulation 1215/2012.

The Court of Justice has long opined that if the jurisdiction clause is included in the general contract conditions drafted by one of the parties, the contract signed by the other party must contain an express reference to those general conditions in order to ensure the real consent thereto by the parties (judgement of 14 December 1976, Estasis Salotti di Colzani, case no. 24/76; judgement of 16 March 1999, Castelletti, case no. C-159/97; judgement of 7 July 2016, Höszig, case no. C-225/15). Moreover, to be valid, the clause must involve a particular legal relationship (judgement of 20 April 2016, Profit Investment SIM, case no. C-366/13).

In the instant case, the referring court found it self-evident that the legal relationship at bar was a commercial concession agreement entered into for the purpose of distributing Saey products in Spain, a contract that was not evidenced in writing.

From this perspective, it is clear that the general conditions contained in the Saey invoices could have no bearing on the commercial concession agreement: assuming Lusavouga’s consent had been proven, the selection of Belgium as the forum would have applied if anything to the individual sales agreements, but not to those duties arising from the separate distribution agreement.

What, then, would be the court with jurisdiction for the duties arising from the commercial concession agreement?

Absent any jurisdiction clause, the issue would be decided under Art. 7, point 1 of Regulation 1215/2012, under which it becomes imperative to establish whether a contract is for goods or for services.

The “provision of services” has been defined by the Court of Justice as an activity, not mere omissions, undertaken in return for remuneration (judgement of 23 April 2009, Falco, case no. C-533/07).

With the judgements in Corman Collins of 19 December 2013 (case no. C-9/12), and Granarolo of 14 July 2016 (case no. C-196/15), the Court held that in a typical distribution agreement, the dealer renders a service, in that they are involved in increasing the distribution of supplier’s product, and receives in consideration therefor a competitive advantage, access to advertising platforms, know-how, or payment facilities. In light of such elements, the contract relationship should be deemed one for services. If on the other hand the commercial relationship is limited to a concatenation of agreements, each for the purpose of a delivery and pickup of merchandise, then what we have is not a typical distribution agreement, and the contractual relationship shall be construed as one for the sale of goods.

Once the contract has been categorised as one for services, one must then determine “the place where, under the contract, the services are provided”. The Court specifies that such location shall be understood as the member state of the place of the main provision of services, as it follows from the provisions of the contract  or – as in the case at issue – the actual performance of the same. Only where it is impossible to identify such location shall the domicile of the party rendering the service be used.

From the referring court’s description of the contractual relationship, and from the Court of Justice’s understanding of the distributor’s performance of services, it would be logical to find that the principal location for performance of services was Spain, where Lusavouga “was involved in increasing the distribution of products” of Saey.

It is clear that neither the manufacturer nor the distributor would ever have intended such a result, and they might have avoided it being chosen for them by reducing their agreement in writing, including a jurisdiction clause therein.

By the same token, viewed from the outside, the Portuguese judges’ apparent conviction that the situation was one of an actual dealership contract would leave ample room for debate. After all, a number of elements would lead to the opposite conclusion. However, even in terms of that aspect, the absence of a written contract left room for interpretation that might lead to unforeseen – and perhaps rather risky – consequences.

In conclusion, the wisdom of setting down the terms and conditions of a sales distribution agreement in writing appears clear. This is not only because one can avoid those ambiguities we have described above, but also because it specifies other important clauses stipulated by the parties that should not be left to chance: exclusivity of area, if any, or with respect to specific sales channels, the contract period and termination notice, any duties to promote the product, control over end-user personal data, and the possibility of, and methods for, any online sales of products.

The relationship between influencers and advertising is one of the most interesting topic of the recent years, and one to which many operators in the sector are devoting energy and money.

In this article we will return to talk about the legal problems that influencer marketing makes it necessary to analyze.

There are many problematic profiles that can arise from the activity of influencers, pursuant to a fundamental principle of advertising discipline: any form of commercial communication and/or advertising must clearly be recognizable as such.

It is known that influencers, thanks to the reputation they have on social network, Instagram among all, are often paid to post pictures that portray them along with products given for free companies that have sponsored the post itself. The situation described can well be considered as a real advertising activity, considering that there is an individual that receive remuneration for promoting a product to the community. However, in the sponsored post there is no mention of the fact that the activity carried out by influencers is a genuine and effective advertising activity: the influencers simply post the picture and describe the product , obviously in a positive way, as if it were “a private story in the style of Instagram» (injunction of the Italian Advertising Self-Regulatory Institute (IAP) Control Committee no. 57/2018).

It is certainly on the basis of these considerations that, in the last two months, we have assisted to a real crackdown in the IAP, the Italian Advertising Self-Regulatory Institute (“Istituto di Auto-disciplina Pubblicitaria). The IAP Control Committee notified many influencers, as well as the companies producing the good displayed in the sponsored posts, injunctions aimed at inhibiting the publication of certain posts released by the influencers themselves.

The common element of all these injunctions is the criticism of a behavior that showed a purely advertising activity as if it were a spontaneous choice of the influencer. This circumstance leads to a situation in which, using the words of the IAP injunction No 61/2018 of 14 June 2018, there are “communication conveying eminently promotional content of the product and the brand in question, that is however not sufficiently explicit and therefore not immediately recognisable to the public”.

In fact, what is being contested in the above-mentioned injunctions, but also in others, such as in the injunction no. 51/2018, is the violation of art. 7 of the Italian Marketing Communication Self-Regulation Code (“Codice di auto-disciplina pubblicitaria). The code is the source of the above-mentioned principle that states that any form of commercial communication must always be recognisable as such. Furthermore, the Code says that «in the means and forms of commercial communication in which contents and information of other kinds are disseminated, commercial communication must be clearly distinguished by means of appropriate measures«.

The measures taken by the Control Committee involve not only influencers, but also companies, as the latter actually benefit from an activity that can be considered a form of surreptitious advertising.

Please, allow me a note.

Take for example the injunction no. 50/2018, regarding two Instagram’s posts of the influencer Chiara Nasti, that portrayed her with products marked with the trademark «Sunsilk»: having noted that the two posts of Nasti’s Instagram profile violated the above-mentioned art. 7 of the Italian Marketing Communication Self-Regulation Code, the injunction states the essential need for  «transparency of communications«, that allows an effective distinction, and not a merely formal one, of promotional communications from any other type of communication.

Analyzing the guidelines elaborated on this matter by the IAP, the so-called «Digital Chart», it results that it is considered compliant for the purpose of the recognition of an advertising communication as such, that a post on Instagram or on another social network presents the hashtag #advertising, or even simply the hashtag #ad.

In this respect, the IAP’s guidelines may leave a little baffled. In fact, while recognizing that the choice in question is an attempt to mediate between the need to protect the consumer and the activity of influencer, it is legitimate to doubt about the effectiveness of the hashtag #ad. As a matter of fact, it is reasonable to doubt that the hashtag #ad, written under a picture on a social network, is in itself suitable to make it clear to the user and to the average consumer that the post ha an advertising message. In fact, it can be assumed that many users do not know that the term «ad» is the abbreviation for «advertising», especially considering that the average user of influencers is represented by young people aged between 14 and 18 years. In a nutshell, the hashtag #ad would be able to “disguise” the advertising activity.

On the other hand, the Italian Competition Authority (AGCM – Autorità Garante della Concorrenza e del Mercato) and some German judges (and the German legal system is known to be particularly attentive to new technologies law) also reached these conclusions. In this respects, it is worth reading the Case 13 U 53/17 of the Celle Higher Regional Court, that concerns to precisely the hashtag #ad and reaches conclusions similar to those mentioned above.

It should also be noted that, so far, it has been mentioned the Italian Marketing Communication Self-Regulation Code, a regulatory text issued by the IAP, whose injunctions or decisions bind exclusively the companies adhering to its system of self-regulation.

However, it is clear that, in cases such as those described above, is applicable a specific Italian legislation, the so-called Consumer Code (Legislative Decree no. 206/2005 – Codice del Consumo), Furthermore, surreptitious advertising violates the prohibition of misleading and unfair commercial practices, as stated in various articles of the Consumer Code.

The consequences are relevant, because the Consumer Code and its Implementing Regulations implicate the intervention of the Italian Competition Authority (AGCM) or the Italian Regulatory Authority for Communications (Agcom – Autorità Garante per le Comunicazioni), both having sanctioning powers toward any person (with particular reference to financial sanctions).

What arises from this brief examination is that this phenomenon is particularly interesting and widespread throughout the world.

The author of this post is Elena Carpani.

Last 7 June, legislative decree no.63 of 11 May 2018 implementing EU Directive no.2016/943 of 8 June 2016 on “on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure”, was published in the Official Journal of the Republic of Italy, pursuant to article 15 of Delegated Law no. 163 of 25 October 2017.

The purpose of this act was twofold: on the one hand, it assisted in matching the already existing Italian legislation – in particular, articles 98 and 99 of the Italian Code of Industrial Property – with the new EU legislation; whilst, on the other hand, it implemented new and more effective provisions of law on the protection of trade secrets.

The European Union introduced Directive no. 943/2016 in order to harmonize and ensure consistent protection of know-how and trade secrets on European level: in fact, irrespective of article 39 of the TRIPs Agreement, Italy was the only EU member having a domestic definition and a specific protection of trade secrets and no EU law has been passed governing their unlawful acquisition, use or disclosure. This factor weakened the ability of several countries to protect one of the most prominent intangible assets for industry 4.0 and next-generation innovative businesses.

Amid this European scenario, Italy maintained a privileged position vis-à-vis most of the other Member States, since provisions for specific protection of business know-how and confidential information had already been laid down under articles 98 and 99 of the Italian Code of Industrial Property. This is why Italian lawmakers intervened in articles 98 and 99 of the Italian Code of Industrial Property to merely replace the former language “business information and expertise” with the notion of “trade secrets”, while basically leaving the protections envisaged in article 98 of the Italian Code of Industrial Property unchanged to its earlier version, which was already in line with the EU rules.

Apart from this, the legislative decree supplemented the applicable rules and improved the standards of protection of trade secrets, pursuant to EU Directive no. 2016/943, to enable judicial decisions in protection of trade secrets to be weighed against, inter alia, the significance of such information, its importance for the claimant, and the precautionary measures implemented by the owner thereof.

In the first instance, paragraph 1-bis of article 99 of the Italian Code of Industrial Property has been introduced to take negligent behaviours into consideration on the matters of infringement of trade secrets, so that the acquisition, use, or disclosure of trade secrets may be held unlawful even when, at the time of the challenged circumstances, the individual was, or should have been, aware, as the case may be, that the trade secrets had been directly or indirectly obtained by the party that unlawfully used or disclosed them.

Quite the reverse, article 9, paragraph I, of the Directive has been fully implemented in article 121-ter on the preservation of confidentiality of trade secrets in the course of legal proceedings, irrespective of these being for precautionary measures or on the merits of the unlawful acquisition, use or disclosure of such trade secrets. According to such new provision of law, any (ordinary, civil or criminal, administrative or accounting) court of law will be entitled to prevent the counterparties, their representatives and advisors, legal counsels, clerical staff, witnesses, any court-appointed or delegated experts, and any other persons having access to the decisions, briefs and documents included in the court file, from using or disclosing the trade secrets discussed in the proceedings that the court may classify as confidential. In addition, it is expressly provided that such a prohibition shall maintain full force and effect after the conclusion of the proceedings in which scope it was imposed, while vice versa its effectiveness will be forfeited (i) in the event that the lack of the requirements set out in article 98 of the Italian Code of Industrial Property in order to have a valid trade secret is assessed by ruling, or (ii) where the trade secrets fall in the public domain or become easily accessible to industry players and experts.

Furthermore, in the same article specific measures were laid down for the preservation of confidentiality of trade secrets in the course of legal proceedings: hence, subject to compliance with the principles of fair trial, the judge will be entitled to adopt the most appropriate measures to preserve the confidentiality of the trade secrets discussed in the trial. Besides, the article explicitly sets forth two of the measures available to the judge: i.e., restricting access to hearings, briefs and documents included in the court file; and ordering the clerks to conceal the specific parts containing the trade secrets from the documents filed in the proceeding. However, because policymakers did not deem it appropriate to enable the judicial authorities to impose such prohibitions and measures by operation of law, they preferred leaving any request in this respect to the parties’ initiative, owed to the apparent high technical expertise required to appraise the confidential nature of such trade secrets.

With a view to ensuring a more accurate and effective preservation of trade secrets, criteria have been laid down (in article 124, paragraph 6-bis, of the Italian Code of Industrial Property), which the Judge will be bound to uphold when establishing the remedies and civil sanctions – and assessing whether these are suitable – in the proceedings on the matters of unlawful acquisition, use or disclosure of trade secrets under article 98. For this purpose, the Court is required to take into consideration the material circumstances of the case at issue, among which:

  • the value and other specific features of the trade secrets;
  • the measures implemented by the legal holder to protect the trade secrets;
  • the actions carried out by the infringer to acquire, use or disclose the trade secrets;
  • the impact of the unlawful use or disclosure of the trade secrets;
  • the parties’ legitimate interest, and how this may be affected by the endorsement or rejection of the judge’s measures;
  • the legitimate interest of third parties;
  • the interests of the general public; and
  • the need to ensure protection of the fundamental rights.

Not only will the Judge be bound to take these circumstances into consideration in the course of the proceedings on the merits, but also upon issuance of the precautionary measures sought by the trade secrets holder, and upon appraisal of their suitability, based on the explicit warning contained in new paragraph 5-ter of article 132 of the Italian Code of Industrial Property. Consequently, the Judge will issue a preliminary injunction or another interim measure only if the requesting company proved having adopted all the necessary measures and internal protocols to keep a given trade secret confidential.

According to new paragraph 5-bis of article 132 of the Italian Code of Industrial Property all proceedings aimed at seeking protective measures for trade secrets, as an alternative to the application of the precautionary measures, the judge may authorise the defendant to continue to use the trade secrets, subject to providing an appropriate security for compensation of any damages suffered by their legitimate holder, in any event, without prejudice to the prohibition to disclose the trade secrets authorised for use.

The precautionary measures adopted in protection of the trade secrets may be forfeited either for failure to commence the proceedings on the merits within the mandatory deadline (set out in article 132, paragraph 2, of the Italian Code of Industrial Property), or as a result of the claimant’s actions or omissions. Where the unlawful acquisition, use or disclosure of the trade secrets are subsequently found to be groundless, the claimant will be sentenced to repay the damages caused by the adopted measures.

As a further novelty, Legislative Decree no. 63/2018 introduced a compensation, payable as an alternative to the application of the measures under article 124 of the Italian Code of Industrial Property, which may be granted upon the interested party’s application, provided that all of the following requirements laid down by new paragraph 6-ter of article 124 of the Italian Code of Industrial Property are met: at the time of the use or disclosure, the claimant was not, nor should have been, aware that the trade secrets had been obtained by the third party unlawfully using or disclosing them; the execution of these measures would be unduly burdensome for the claimant; the compensation is commensurate to the damages suffered by the party seeking the application of relieving measures and, in any event, it does not exceed the amount that would have been paid on account of royalties for the use of the trade secrets throughout the challenged period of time.

A statute of limitations has been established in 5 (five) years for rights and actions connected with such misconducts.

As a final provision, in line with the availability of progressive measures and enhanced accuracy and effectiveness of trade secrets protections, which are the EU Directive basic principles, a list of the items is provided which the judge ought to appraise to order the publication of his ruling, and to weigh the suitability of the claimed measures: the value of the trade secrets; the actions carried out by the infringer to acquire, use or disclose the trade secrets; the consequences of the use or disclosure of the trade secrets; the risk of the infringer carrying on with the unlawful use or disclosure of the trade secrets.

Furthermore, to make the above appraisal the Judge shall also consider whether, based on the available information, a natural person may be identified as the actual infringer and, in the affirmative, whether the publication of such information is justified in the light of any potential damages that may be caused to the infringer’s private life and reputation.

In conclusion, articles 388 (wilful failure to enforce a court decision) and 623 of the Italian Criminal Code (disclosure of trade or science secrets) have been amended to improve the criminal reliefs granted under the Italian legal system, so as to include breach of trade secrets, and the measures connected therewith, among the misconducts sanctioned under the above provisions.

All that considered, a new approach in adopting internal rules and compliance’s procedures is required to companies and trade secrets owners in order to protect their confidential information and to safeguard their judicial protection and new language shall be adopted in drafting non-disclosure agreements: as a matter of fact NDAs were in the past very often merely copied and/or downloaded from the web without any juridical care and the due attention.

“Influencer Marketing” is a very well known topic to the jurists and operators of the advertising sector dealing with commercial communication.

There is a core principle in communication law: any form of commercial communication shall be clearly recognizable as such.

Before the diffusion of digital communication and, along with it, the proliferation of the so-called «Influencer Marketing», the issue of recognizability of commercial communication was generally discussed when evaluating whether an advertising content was clearly distinguishable from a journalistic or an informative content (such is the longstanding issue regarding the advertorial).

For a short period of time there was a debate regarding the so-called subliminal advertising, which eventually fell into oblivion.

The necessity to point out to the consumer whether the appreciation for a product or a service shown by a well-known person – precisely an “Influencer” – (i.e. the endorsement) is genuine or not has become a much encountered and controversial topic.

It shall not be considered as spontaneous when an individual receives remuneration for wearing a fashion item, for using a smartphone, or simply when he/she receives as a gift the products that he/she promotes or other valuable products.

It is clear and proven that the spontaneous choice of an “idol” by the public has a bigger impact on these same people rather than any traditional way of advertising. Hence the abuse of surreptitious advertising on the less easily monitored channel: the web, precisely.

What measures should be taken to ensure that the consumers can understand clearly whether a post is subject of a contract or not?

The answer would be very simple.

It would be enough to require the sponsored post to contain, in clearly visible characters, terms as “Advertisement”, “Sponsored by”, “Commercial agreement” or similar notices.

In Italy, in absence of a law regulating specifically the matter, both the Istituto della Pubblicità (Italy’s Advertising Self-Regulatory Institute) and the Autorità Garante della Concorrenza e del Mercato (the Competition Authority) have expressed their opinion on this subject.

In the Italian Advertising Self-Regulatory Institute’s digital chart it is written: “in order to make the promotional nature of content posted on social media and content sharing sites recognizable, celebrities/influencers/bloggers must at the top of their post state in a clearly distinguishable manner the words: “Pubblicità/Advertising”, or “Promosso da … brand/Promoted by…brand” or “Sponsorizzato da…brand/Sponsored by…brand” or “in collaborazione con …brand” or “in partnership with the …brand”; and/or within the first three hashtags (#) use one of the following terms: “#Pubblicità/#Advertising”, or “#Sponsorizzato da … brand/#Sponsored by the … brand “ or “#ad” along with “#brand”.

In a press release of 2017 the Italian Competition Authority has required the addressees the use of the following warnings to be placed below the post together with the others hashtags (#), such as “#sponsored, #advertising, #paidad”, or, in the case of products given for free to the celebrity, “#productsuppliedby”; in particular, all these wordings should be followed by the name of the specific brand being advertised.

However, browsing the Instagram’s pages of various Influencers, it is noticeable that only a few of them are actually using the indications provided by the authorities.

And when it happens to came across Instagram’s profiles that use such indications, it is noticeable that the hashtag that is most commonly used is “#ad”, whose effectiveness (especially in Italy where terms such as “advertising”, “Adv” and, even more so, “ad” are not easily decipherable by the average consumer) raises many concerns.

So far the Italian Competition Authority intervened sending moral suasion letters to some of the main influencers and companies producing the branded goods displayed in the posts, but still no self-regulatory, administrative or state measures have been taken.

The same situation of uncertainty is likely to be found in other countries (here you can find a previous Legalmondo post on this topic in Germany: https://www.legalmondo.com/2017/11/germany-product-placement-influencer-marketing/), with the consequence that international companies are operating in an unclear context, in which it is difficult to identify what are the risks arising from behaviours considered as unlawful.

I have therefore decided to write this article in order to assess the state of Influencer Marketing in Italy and in other countries and get a better understanding of the regulations in force, the measures/judgments issued by the competent Authorities, the international trends and the best practices that could be adopted by international companies.

Since I am one of the founders of the Digital Adv Lab – an interdisciplinary observatory that studies the legal implications of marketing and digital communication initiatives – I am interested in getting in touch with all the readers involved in this topic: please feel free to enter a comment and/or contact me.

The author of this post is Elena Carpani.

Under Italian law, the parties to a contract – both being private legal entities – are generally free to agree upon the court having jurisdiction on any disputes that may arise from such contract.

However, although such clauses are valid, their enforceability can be limited by certain formal requirements, which should be taken into account.

Curiously enough, such requirements are often stricter when both parties are based in Italy, looser when one of them is based abroad, particularly in another EU country.

Nevertheless, considering the current uncertainties in case law, a cautious approach in contract drafting is justifiable in any case.

Exclusive or non exclusive forum?

Let’s consider for example the following clause in a commercial contract between two private companies: «Competent court – The courts of Milan shall be the competent forum on any dispute«.

This clause apparently does not raise any doubts. However, it has recently held by the Italian Supreme Court (“Corte di Cassazione”) to be unenforceable, particularly from the point of view of its non-exclusivity ( Supreme Court Civil Section (Cass. Civ. Sez.) VI-3, order 25.1.2018 n. 1838).

In that case, an Italian company had the other party (another Italian company) sign its general contract terms containing the above mentioned clause. Notwithstanding that, the first company was then served with a payment order (“decreto ingiuntivo”) issued by the Court of Siena, where the second company had started lawsuit despite having approved the forum clause.

The first company was not successful in opposing against the payment order by raising the argument of the lack of jurisdiction of the Siena Court. In fact, it could not enforce the forum clause included in its general contract terms because the clause did not specify that the courts of Milan were the “exclusive” forum.

Therefore, to the opinion of our Supreme Court (actually confirming its own previous case law) in order for that clause to be enforceable as desired, it should have read: “The courts of Milan shall be the exclusively competent forum on any disputes”.

It is noteworthy, though, that the same general contract terms, if signed by a company based in another EU country different from Italy (e.g. France), could have successfully prevented the French company from starting lawsuit in France, even if the forum clause did not specify its exclusivity.

That is because Article 25 of EU Regulation n°1215/2012 expressly states that the “prorogation of jurisdiction” clause “shall be exclusive unless the parties have agreed otherwise”.

This was also confirmed by the Italian Supreme Court as well (see for example the decision n°3624 of 8.3.2012).

Now, what happens if the contractual partner of the Milan company is a company based in a non-EU country not bound by international treaties on the subject? For example, a U.S. company?

Would the clause “The courts of Milan shall be the competent forum on any dispute” be considered as exclusive or not, from the perspective of an Italian court?

Article 6 of Regulation 1215/2012 should lead the Italian court to interpret that clause as exclusive pursuant to Article 25 of the same Regulation. However, in similar cases in the past, Italian courts have considered such clauses as non-exclusive by applying the domestic rules of private international law (art. 4 of Law 218/95) and interpreting them in line with Article 29, second paragraph, of the Civil Procedure Code (see for example Tribunale of  Milan, 11.12.1997). As a consequence, in the case described above, if the U.S. company despite the above clause starts a lawsuit in its country, the decision issued in the U.S. may be recognized in Italy.

The Hague Convention of 30.6.2005 on forum selection agreements should solve the above and other issues, as it states (just like the European Regulation) that the chosen forum is exclusive except for an express agreement on the contrary. However, such Convention at the moment is in force only in a very limited number of countries (European Union, Mexico, Singapore).

In such an uncertain situation, if one wants the chosen forum to be exclusive regardless of where the other party is based, the most prudent approach under Italian law is certainly to specify exclusivity in the clause.

“Special approval” of unfair terms (art. 1341 of the civil code)

Another precondition of enforceability of forum selection clauses under Italian law, is the requirement of “special approval” of such clauses, if included in general contract terms. Pursuant to Article 1341, second paragraph, of the Civil Code, certain types of “unfair” clauses in general contract terms are unenforceable unless “specially approved” in writing.  Such “unfair terms” include also arbitral and forum selection clauses, if favorable to the party drafting the general contract terms.

According to the standing jurisprudence of our Supreme Court, such “special approval” in practice occurs by putting a second signature on the contract, which has to be autonomous and separated from the signature that normally is placed to approve the contract in its entirety.  Also, such second approval must expressly refer to each single unfair term, by citing number and heading of each such clause.

However, the special approval requirement for the forum choice clauses only applies to contracts between Italian parties, not to international contracts.

In particular, whenever EU Regulation 1215/2012 applies, the less stringent formal requirements set forth by Article art. 25 have to be complied with, even when the forum clause is part of general contract terms. In such a case, it is necessary and sufficient for the contract signed by the parties to include an express reference to the general terms containing the forum clause (see for example Cass. Sez. Un. 6.4.2017 n.8895). In case of general contract terms in a sale contract concluded electronically, a forum choice clause (again under the EU Regulation) can be validly accepted by a “click” (see EUCJ decision n.322 of 21.5.2015).

Even applying the Italian domestic rules in private international law (article 4, Law 218/95) – that is, essentially, in matters involving non-EU (or non-EEA/EFTA) parties – the “special approval” condition is not required for forum selection clauses, because such requirement is not expressly provided for by Article 4, and also by way of interpretation (Constitutional Court 18/10/2000, n. 428).

Notwithstanding the above, however, it has not yet been finally clarified whether or not the “special approval” requirement per Article 1341 of the Civil Code should also apply to international contracts (if governed by Italian laws) as a condition to enforce the other clauses that the law provision considers as “unfair”, such as for example limitation or exclusion of liability clauses.

Therefore, it is still very common in Italy to draft general contract terms, also for international contracts, providing for the other party’s second signature for special approval of the unfair terms.

All this, hoping for the Italian jurisprudence to develop a more modern and international approach in the future.

The application of the General Data Protection Regulation (“GDPR”), in force since 25 May 2018, will oblige companies to deal with issues concerning IT security and liability for collection and storage of personal data, without the possibility of any further hesitation. Privacy protection will become an important part of corporate culture and will have to be necessarily managed from the top levels, i.e. the managing director as well as the management team. Employees will also be involved in this awareness process through adequate training on such matter. Companies should set forth order and priorities of some data-related procedures, in accordance with privacy by design and privacy by default principles. In other words, such companies should ensure data protection from the onset of the product phase or service ideation and design, opting for behaviors that are aimed to prevent possible issues affecting personal data.

An even wider definition of personal data

The concept of “personal data” refers to all the information that identifies or makes a person identifiable and provides details related to his/her features, habits, life-style, personal relationships, health and economic conditions. Also, the definition of “personal data” becomes even wider and more well-structured when considering electronic communications with new technologies including geolocation bearing significant weight.

This transition, certainly problematic, introduces new challenges and opportunities, and highlights the question of data protection as a fundamental human right at the center of the international debate and digital policies. This results in a significant turning point. In fact, digitalization has caused several information security issues, which until a few years ago could be handled by national authorities in each single EU country, and now require a more focused and structured legal framework. The induction of platforms such as SaaS (Software as a Service) and the cloud computing growth have completely changed the scenario.

Therefore, the European Data Protection Supervisor (EDPS) positively dealt with the request to reform the legal framework on personal data protection in 2011, since the existing legislation was no longer appropriate.

Even though it is way too early to predict the impact of such privacy regulation, we believe that it is interesting to focus on certain general considerations and some of the GDPR’s outcomes in the international scenario.

The potential applicability of the GDPR worldwide

Certainly, one of the important changes brought about by the GDPR is its potential applicability worldwide: the regulation thus overcomes European borders in the name of personal data protection.

Such regulation, in fact, not only applies to all cases where data are handled by EU based companies, but in all cases where a company, even though not EU based, also deals with EU based individuals’ personal data, within the scope to offer them goods or services or to monitor their behavior in the EU.

Consequently, in the light of the above, all foreign companies still pursuing to offer and provide their services to EU-citizens cannot avoid complying with the GDPR.

Furthermore, even UK organizations may be forced to comply with the regulation to protect UK citizens’ personal data and maintain their competitiveness in the EU market, for reasons of opportunity and convenience, apart from compulsoriness as above described and, in any case, for as long as Brexit does not materialize.

The lack of connection with the data location

The regulation not only limits foreign companies that deal with EU citizens’ personal data, but also aims to govern all the processing of personal data, irrespective of the place where such data are located. It therefore provides that all the personal data processing made by EU based companies will be subject to the GDPR, regardless of the fact whether such processing is carried out within or outside the EU.

From a legal point of view, such data will be in the spotlight and subjected to this new regulation rather than to national laws. This means that the physical position loses relevance before the aim to grant interested individuals with a greater control on the information that is collected, processed and used by third parties.

For sure companies may stop their business with EU citizens in order to avoid compliance with the GDPR principles, but such choice should be correctly made: i.e. the GDPR’s application should be taken into account when a company provides a web service which is available also to EU citizens.

The disposition of strict fines

The fines for companies that are not in compliance with such regulation can amount to up to 4% of their global revenue and up to Euro 20 million. The relevance of such measures drew attention of all the parties, particularly in the US where organizations have a strong presence in the EU. Furthermore, the GDPR applies to organizations of any dimension and to both individual enterprises as well as large companies.

The forward-looking companies started to set forth their compliance programs immediately after the EU regulation announcement, but this appears complex and as a result meeting the set deadline called for 25 May could be difficult.

According to PwC’s reports, 9% of US companies declare to have allocated more than 10 million dollars with the aim to obtain such compliance.

Some compliance requirements for companies

  • Accountability principle: data processing needs to be carried out by recorded procedures, regardless of the fact that such procedures will be managed by the companies or by third parties on their behalf. Doing so will make the data controller responsible and oblige him to be compliant with the GDPR.
  • Risk based approach: the driving force of such a regulation is the aim to make companies responsible, which are therefore asked to comply with the GDPR principles by adopting a new risk based approach and risks assessment.
  • Clear and concise consent: much attention is paid to the consent of personal data processing, which should be clear, concise, distinguishable and unequivocal.
  • Data protection by design and by default: privacy management and implementation executed by means of default settings since the design phase; it means that companies should take into account the personal data protection, from the beginning a product, service or app is designed and developed.
  • Right to be forgotten: individuals are entitled to obtain, without delay, that their data is deleted by the data controller when certain conditions- provided by the GDPR -are met, such as for example when data become redundant and no longer necessary, or regarding the aims for which data have been collected or in the event when the individual’s consent is withdrawn.
  • Right to data portability: individuals are entitled to receive their personal data in a frequently-used, well-structured and machine-readable format, so as to transfer such data to another data controller, excluding any possible encumbrance by the former data controller.
  • Appointment of an EU Representative: the Representative should act on behalf of the data controller or the data processor and may be questioned by any surveillance Authority.

How to make the transition process easier?

The EU regulation relating to personal data protection requires a strong legal formation and, at the same time, tremendous technical implementation skills on the basis of the ongoing digitalization processes and use of even more innovative and complex technologies.

In such regard, companies may rely on professionals who are able to provide multidisciplinary services and consultancy, not only of a legal and IT nature, but who can exchange and implement synergies between professionals and business workers such as engineers and mathematicians.

Consequently, this burdensome commitment to follow the GDPR together with the obligation to comply with the law shall also enable companies to combine the aforesaid skills and join forces to commence a transition process that will ensure and ultimately result in growth.

The author of this post is Giorgio Piccolotto

La cuestión del litisconsorcio necesario respecto a los beneficiarios de un trust en la acción revocatoria es objeto de amplio debate desde hace tiempo lo que ha llevado a dos corrientes contrastantes entre ellas, superadas por la reciente sentencia del Tribunal de Casación n. 19376 del 3 de agosto de 2017.

Según una primera corriente, los beneficiarios del trust no deben considerarse partes necesarias del juicio de revocatoria porqué el objeto de la demanda no es el acto con el que se constituye el trust sino el sucesivo acto dispositivo, llevado a cabo por el “settlor” con el que el nuevo ente, en la persona del trustee, viene dotado de un patrimonio, sin que sea solicitada la participación de los beneficiarios.

Los beneficiarios no podrían considerarse litisconsortes necesarios ya que no siendo directamente titulares de los bienes otorgados en el trust no sufririan en la hipótesis de revocación del acto dispositivo de un perjuicio sino que al máximo se lesionaría un mero interés a la integridad patrimonial del ente.

No estando dotado el trust de personalidad jurídica sino siendo un conjunto de bienes y relaciones destinadas a un fin determinado, en interés de uno o mas beneficiarios y formalmente a nombre del  «trustee», este último resultaría ser el único sujeto que además de poder disponer en via exclusiva de los derechos otorgados en el patrimonio vinculado, estaría legitimado a oponerlos en las relaciones frente a terceros, incluso defendiéndose en juicio (Tribunal de Apelación de Milán, sentencia de 25 de noviembre de 2016): de hecho solo frente a dicho “trustee”  el acreedor del “settlor” podría correctamente iniciar la ejecución forzosa, una vez reconocida la ineficacia relativa del acto dispositivo a consecuencia del juicio de revocatoria.

Según otra orientación, en cambio, los beneficiarios del trust deben considerarse litisconsortes necesarios en el juicio de revocatoria ya que, aun no siendo titulares del patrimonio vinculado, estarían de todas formas interesados en los efectos de la sentencia que dispone la revocació del acto por el que se otorgan los bienes al trust, siendo su posición sea jurídica que de hecho perjudicada por los efectos de dicha resolución.

A una conclusión análoga se podría llegar incluso a través de una interpretación en sentido contrario de la jurisprudencia en materia de fondo patrimonial.

Con referencia a dicha figura, la Casación ha, de hecho excluido la legitimación pasiva de los hijos de los que lo constituyen, en juicios análogos, en cuanto los mismos no podrían tener pretensiones judiciales directamente frente a sus padres administradores del fondo patrimonial (Casación Civil, sentencia n. 10641 de 15 mayo de 2014, Casación Civil, sentencia n. 18065 de 8 septiembre de 2004; Casación Civil, sentencia n. 5402 del 17 de marzo de 2004) .

Los beneficiarios del trust, en cambio, pudiendo tener pretensiones sea frente al trust que frente al trustee, deberían considerarse litisconsortes necesarios en todos aquellos juicios que se refirieren a cualquier aspecto del acto dispositivo (S. Bartoli, Azione revocatoria di trust e litisconsorzio necessario rispetto ai beneficiari: la prima pronunzia della Cassazione, Il Caso, 22 de Noviembre de 2017).

A aclarar la cuestión ha intervenido recentemente el Tribunal de Casación que, con la sentencia n. 19376 del 3 de agosto 2017, ha propuesto soluciones alternativas a aquellas apenas comentadas, capaz de terminar en parte con el contraste interpretativo descrito.

El caso examinado por los magistrados y relativo al otorgamiento de determinados bienes, antes a un “fondo patrimonial” y sucesivamente a un trust, por parte de unos conyuge que, a través de dichos instrumentos, han destinado parte del proprio patrimonio a las necesidades de vida y de estudio de los hijos.

Los actos dispositivos han sido pero considerados perjudiciales para los propios intereses por un banco, acreedor de uno de los cónyuges, que ha por lo tanto ejercitado la revocatoria, obteniendo sea en primer que en segundo grado, la declaratoria de ineficacia, en virtud del art. 2901 c.c, del “fondo patrimonial” y del trust.

Contra la sentencia de apelación, los cónyuges han propuesto recurso de Casación, por falta de integración del contradictorio en el juicio de apelación, no habiendo el Tribunal de Apelación ordenado la intervención en el proceso de los hijos – benericiarios y solicitando, por tanto, la nulidad de todo el proceso.

Los magistrados del Tribunal de Casación, examinado el caso, no han considerado válidos los motivos propuesto con el recurso.

Según el Tribunal de Casación, de hecho, en la hipótesis de “fondo patrimonial”, no produciéndose ninguna mutación en la titularidad de los bienes, que siguen siendo de titularidad de padres – constituyentes del fondo y que no surgiendo ningún derecho subjetivo a favor de los hijos beneficiarios, estos no pueden ser en ningún modo considerados litisconsortes necesarios en el juicio de revocatoria del fondo, como es afrirmado por constante jurisprudencia sea de los Tribunales de Apelación que de Casación (véase la anteriormente citada).

Según el Tribunal de Casación se llega a una conclusión análoga con referencia al trust.

En relación a dicha cuestión los magistrados del Tribunal de Casación consideran no poder adherir a ninguna de las orientaciones que se han formado en jurisprudencia, y ofrecen, como anticipado, una tercera via interpretativa según la cual los beneficiarios del trust pueden ser considerados legitimarios pasivos en la revocatoria solo cuando el acto costitutivo del trust reconozca a los mismos la titularidad de derechos actuales sobre bienes otorgados al mismo.

En ausencia de un expreso reconocimiento de dichas prerrogativas, el único legitimado pasivo en el juicio de revocatorio es el trustee.

El trust, de hecho, se convierte en operativo, explica el Tribunal de Casación, mediante dos tipologías de actos, el primero de caracter unilateral, finalizado exclusivamente a la sua institución y el segundo (o los segundos, pudiendo el “settlor” proceder a una pluralidad de negocios distintos) de natura dispositiva, dirigido a transmitir los bienes al trustee.

Si el acto costitutivo por si mismo no parece idóneo a determinar ningún  perjuicio a los acreedores del “settlor”, no afectando la consistencia de su patrimonio y, por tanto, su capacidad de cumplir con las propias obligaciones, no se puede decir lo mismo de los actos con los que lo bienes se transmiten al trustee, el cual convirtiéndose en el único sujeto legitimado a disponer de los mismos, se convierte en el único a poder oponerse en un juicio para tutelarse.

Es claro dicho aspecto, los jueces del Tribunal de Casación han observado además como el eventual interés de los beneficiarios a la correcta administración del patrimonio otorgado en el trust no represente, desde un punto de vista teórico, una hipótesis de interés directo e inmediato a intervenir en el juicio de revocatoria, que justifique la participación de los beneficiarios como litisconsortes necesarios.

El interés a la correcta administración del trust constituye una posición jurídica que se refiere exclusivamente a las relaciones entre los beneficiarios y el “trustee” y que, en ningún modo puede afectar a los acreedores del “settlor”.

A una conclusión distinta se podría llegar cuando el regolamento del trust hubiese permitido de calificar los beneficiarios como actuales beneficiarios de la renta o como beneficiarios finales con derecho inmediato a recibir la titularidad de los bienes otorgados en trust, independientemente de cualquier valoración discrecional del “trustee “.

Solo così, de hecho, los beneficiarios habrían podido hacer valer un interés directo e inmediato en la controversia que justificaría la necesidad de citarlos en juicio.

Por lo tanto, en las hipótesis en que los beneficiarios no sean titulares de derechos subjetivos actuales sobre bienes otorgados al trust, además del deudor, legitimado pasivo en la acción revocatoria es solo el “trustee”, en cuanto único sujeto de referencia en las relaciones con terceros y por tanto también en las relaciones con los acreedores del “settlor”, único titular de los derechos sobre bienes sujetos a “segregación”.

La solución ofrecida por el Tribunal de Casación es homogénea con cuanto previsto por el derecho inglés, en el que nuestro ordenamiento se ha inspirado para la figura del trust, según la cual en los juicios  iniciados por los acreedores del “settlor” frente al trust, la protección de este se encarga al trustee, en lugar o junto con los beneficiarios (Di Sapio, Muritano, “Solo il «trustee» partecipa al giudizio di revoca del trust”, Il Sole 24 Ore, 9 de noviembre de 2017).

Por lo tanto, como en Italia, también en los sistemas anglosajones los beneficiarios no son parte necesaria del proceso pero pueden intervenir volontariamente en el mismo para evitar ser perjudicados por la sentencia de revocatoria.

El autor de este artículo es Giovanni Izzo.

According to Italian Copyright Law and to different European countries legislations, advertising creations and campaigns are not protected by copyright.

Articles 1 and 2 of the Italian Copyright Law list many copyrighted works but do not include advertising claims and creations, even through a broad legal interpretation.

The Italian Advertising Self-Regulatory Code (Codice di Autodisciplina della Comunicazione Commerciale, hereinafter the “Code”) and the Italian Self-Regulatory Jury (hereinafter, the “Jury”) should overcome such legal gap.

Article 13 of the Code provides the following:

“Art. 13 – Imitation, Confusion and Exploitation

Marketing communication should not copy or slavishly imitate that of others even if it concerns non-competitive products, especially if there is the risk of generating confusion with the marketing communication of others.

Moreover, any exploitation of the name, trademark, notoriety and corporate image of other marketers should be avoided, if it is intended to generate an undue advantage.”

According to the Jury case law, which often applied art. 13 of the Code, it is clear that there are two requirements for and advertising in order to obtain a legal protection: novelty and originality.

It is new an idea which has never been used or it is not in the consumers’ memory.

It is original an idea which consists in a significant creative effort.

Advertising campaigns that use stereotypes are not original, thus they are not protected by law: e.g. the idea consisting in a side-by-side comparison of two dishes in order to show a detergent effectiveness.

Another principle consists in the balance between originality and protection against imitation: the more an advertising is original (id est, it is not descriptive of the advertised product), the more it is protected against similar advertisings.

Art. 13 of the Code protects both the “heart” (the idea) of an advertising campaign and the form: so, if an advertising has a different heart and an identical claim or form compared to a previous one, it infringes art. 13 of the Code.

The Jury case law stated over the years a fundamental principle: when there is an identical copy of an idea or a claim of a third party (particularly if by a competitor), the originality degree required by the first advertising in order to obtain a legal protection is almost null.

Even simple and ordinary ideas can be protected under art. 13 of the Code if they are slavishly imitated, particularly by a competitor which sells product of the same category.

The Jury, in its decision n. 5/2018, seems to have changed its orientation on the matter, especially concerning the requirements of novelty and relevant imitation.

The decision concerned two competitors in the fruit and vegetable sectors: La Linea Verde (owner of the trademark “Dimmidisì” (say yes to me) and manufacturer of product labelled by such mark) and Del Monte.

La Linea Verde started to use the claim “Tutti dicono di sì” (all say yes) at the beginning of 2017 in various online and paper campaigns and in a trade fair.

After a few months (October 2017) Del Monte started to use the claim “Tutti dicono sì” (all say yes – with a slightly different wording) in its advertising campaigns.

Thus, La Linea Verde sent to Del Monte a cease and desist letter and later filed a complaint before the Jury claiming the infringement of art. 13 of the Code.

In the decision, the Jury:

  1. after stating that the claims “Tutti dicono di sì” e “Tutti dicono sì” are identical, both by the form (the word “di” is not relevant) and by the content, because both the claims suggest adhesion to the products by the consumer;
  2. after stating that La Linea Verde has a prior use of the claim and stating that the publishing of the claim on the web and on a trade fair, even if not reported on an advertising search engine (like Easy Way), are appropriate in order to prove the prior use of a claim;
  • after stating that the claim has never been used in that market and in different markets in the past decade;

the Jury eventually stated that Del Monte slogan has to be considered “a logical development of an advertising idea that Del Monte, undeniably, has been proposed for a long time”, referring to the ’80s and ’90s popular advertising “L’uomo Del Monte ha detto sì” and to the less popular “Sì al meglio, sì a Del Monte”.

The Jury stated that, even if there is a formal overlapping between the claims, the advertisings have their own aspects and they cannot be overlapped in the consumer’s perception (and, in my opinion, this is contradictory, because the Jury previously recognized in the same decision that the claims had the same meaning: suggesting the adhesion to the products by the consumer).

It seems this is a change of course by the Jury concerning claim imitation and likelihood of confusion (art. 13). The Jury stated that it is possible to use two identical (form and content) claims, both original, because there is “a logical development” between an expression (“Tutti dicono sì”) and a communicative path (“to say yes” by Del Monte).

It is a change of course that, in the future, may create some problems to creative directors and lawyers: it will not be sufficient to monitor if a claim has been already used by third parties, but it will be necessary to check if an advertising is “a logical development” of a different communication by a third party. This would result in a subjective judgment which affects the fundamental legal certainty principle.

The author of this post is Elena Carpani.

Italy – Is your forum selection clause enforceable?

20 marzo 2018

  • Italia
  • Derecho internacional

It is often the case – in practice – that an ongoing commercial relationship builds slowly over time through a series of sales agreements, without the parties ever signing an actual distribution agreement to set down their respective rights and responsibilities.

At first blush this might appear to be a good thing: one can sidestep being bound, especially long-term, to the other party. But on closer scrutiny the solution becomes problematic, especially for anyone operating internationally.

One of the key issues that arises when an international contractual arrangement is not in writing, is identifying the court with jurisdiction over any dispute arising therefrom. In the European Union, the issue is resolved by the provisions of Regulation 1215/2012 (“Brussels I recast”). Pursuant to Article 7 of the Regulation, as an alternative to the defendant’s courts, jurisdiction in a contractual dispute may lie with the court in the place of performance of the obligation in question. Next to this general rule are two criteria to identify the “place of performance”, differentiated according to the type of contract at issue. For a contract for goods, it is the place of delivery for the goods; in a contract for services, it is the place where the services are provided.   

Thus, to identify the court with jurisdiction, it is crucial that a contract fall under one of these categories: goods or services.

No doubt this distinction is quite simple in many circumstances. In the case of a distribution agreement, or of a commercial concession agreement, the issue may become thorny.

The European Court of Justice has analysed this issue on a number of occasions, most recently in their judgement of 8 March 2018 (Case no. C-64/17) following the request for a preliminary ruling from a Portuguese Court of Appeal. The parties to the action were a Portuguese distributor, a company called Lusavouga, and a Belgian company called Saey Home & Garden, that produced articles for the home and garden, including a line of products branded “Barbecook”.

Following Saey’s decision to break off the commercial relationship – notice of which was sent in an email dated 17 July 2014 – Lusavouga brought action in Portugal seeking compensation for the unexpected termination of the agreement, and goodwill indemnity. Saey raised a plea of lack of jurisdiction of the Portuguese court, citing their general conditions of sale (mentioned in their invoices) which required that a Court in Belgium be competent for dispute resolution.

The facts thus presented two issues to be resolved in light of the Brussels I recast Regulation: deciding whether a jurisdiction clause in a vendor’s general terms and conditions pursuant to Art. 25 of the Regulation shall apply, and, if not, choosing the court with jurisdiction under Art. 7 of the Regulation.

Shall a jurisdiction clause contained within a vendor’s general terms and conditions apply to a distribution relationship?

The supplier company apparently considered their course of dealing with the Portuguese retailer nothing more than a concatenation of individual sales of goods, governed by their general terms and conditions. Consequently, they argued that any dispute arising from the relationship should be subject to the jurisdiction clause identifying Belgium as the court with jurisdiction under those terms and conditions.

Thus, a determination was needed on whether, under these facts, there was a valid prorogation of jurisdiction under Article 25, paragraph 1 of Regulation 1215/2012.

The Court of Justice has long opined that if the jurisdiction clause is included in the general contract conditions drafted by one of the parties, the contract signed by the other party must contain an express reference to those general conditions in order to ensure the real consent thereto by the parties (judgement of 14 December 1976, Estasis Salotti di Colzani, case no. 24/76; judgement of 16 March 1999, Castelletti, case no. C-159/97; judgement of 7 July 2016, Höszig, case no. C-225/15). Moreover, to be valid, the clause must involve a particular legal relationship (judgement of 20 April 2016, Profit Investment SIM, case no. C-366/13).

In the instant case, the referring court found it self-evident that the legal relationship at bar was a commercial concession agreement entered into for the purpose of distributing Saey products in Spain, a contract that was not evidenced in writing.

From this perspective, it is clear that the general conditions contained in the Saey invoices could have no bearing on the commercial concession agreement: assuming Lusavouga’s consent had been proven, the selection of Belgium as the forum would have applied if anything to the individual sales agreements, but not to those duties arising from the separate distribution agreement.

What, then, would be the court with jurisdiction for the duties arising from the commercial concession agreement?

Absent any jurisdiction clause, the issue would be decided under Art. 7, point 1 of Regulation 1215/2012, under which it becomes imperative to establish whether a contract is for goods or for services.

The “provision of services” has been defined by the Court of Justice as an activity, not mere omissions, undertaken in return for remuneration (judgement of 23 April 2009, Falco, case no. C-533/07).

With the judgements in Corman Collins of 19 December 2013 (case no. C-9/12), and Granarolo of 14 July 2016 (case no. C-196/15), the Court held that in a typical distribution agreement, the dealer renders a service, in that they are involved in increasing the distribution of supplier’s product, and receives in consideration therefor a competitive advantage, access to advertising platforms, know-how, or payment facilities. In light of such elements, the contract relationship should be deemed one for services. If on the other hand the commercial relationship is limited to a concatenation of agreements, each for the purpose of a delivery and pickup of merchandise, then what we have is not a typical distribution agreement, and the contractual relationship shall be construed as one for the sale of goods.

Once the contract has been categorised as one for services, one must then determine “the place where, under the contract, the services are provided”. The Court specifies that such location shall be understood as the member state of the place of the main provision of services, as it follows from the provisions of the contract  or – as in the case at issue – the actual performance of the same. Only where it is impossible to identify such location shall the domicile of the party rendering the service be used.

From the referring court’s description of the contractual relationship, and from the Court of Justice’s understanding of the distributor’s performance of services, it would be logical to find that the principal location for performance of services was Spain, where Lusavouga “was involved in increasing the distribution of products” of Saey.

It is clear that neither the manufacturer nor the distributor would ever have intended such a result, and they might have avoided it being chosen for them by reducing their agreement in writing, including a jurisdiction clause therein.

By the same token, viewed from the outside, the Portuguese judges’ apparent conviction that the situation was one of an actual dealership contract would leave ample room for debate. After all, a number of elements would lead to the opposite conclusion. However, even in terms of that aspect, the absence of a written contract left room for interpretation that might lead to unforeseen – and perhaps rather risky – consequences.

In conclusion, the wisdom of setting down the terms and conditions of a sales distribution agreement in writing appears clear. This is not only because one can avoid those ambiguities we have described above, but also because it specifies other important clauses stipulated by the parties that should not be left to chance: exclusivity of area, if any, or with respect to specific sales channels, the contract period and termination notice, any duties to promote the product, control over end-user personal data, and the possibility of, and methods for, any online sales of products.

The relationship between influencers and advertising is one of the most interesting topic of the recent years, and one to which many operators in the sector are devoting energy and money.

In this article we will return to talk about the legal problems that influencer marketing makes it necessary to analyze.

There are many problematic profiles that can arise from the activity of influencers, pursuant to a fundamental principle of advertising discipline: any form of commercial communication and/or advertising must clearly be recognizable as such.

It is known that influencers, thanks to the reputation they have on social network, Instagram among all, are often paid to post pictures that portray them along with products given for free companies that have sponsored the post itself. The situation described can well be considered as a real advertising activity, considering that there is an individual that receive remuneration for promoting a product to the community. However, in the sponsored post there is no mention of the fact that the activity carried out by influencers is a genuine and effective advertising activity: the influencers simply post the picture and describe the product , obviously in a positive way, as if it were “a private story in the style of Instagram» (injunction of the Italian Advertising Self-Regulatory Institute (IAP) Control Committee no. 57/2018).

It is certainly on the basis of these considerations that, in the last two months, we have assisted to a real crackdown in the IAP, the Italian Advertising Self-Regulatory Institute (“Istituto di Auto-disciplina Pubblicitaria). The IAP Control Committee notified many influencers, as well as the companies producing the good displayed in the sponsored posts, injunctions aimed at inhibiting the publication of certain posts released by the influencers themselves.

The common element of all these injunctions is the criticism of a behavior that showed a purely advertising activity as if it were a spontaneous choice of the influencer. This circumstance leads to a situation in which, using the words of the IAP injunction No 61/2018 of 14 June 2018, there are “communication conveying eminently promotional content of the product and the brand in question, that is however not sufficiently explicit and therefore not immediately recognisable to the public”.

In fact, what is being contested in the above-mentioned injunctions, but also in others, such as in the injunction no. 51/2018, is the violation of art. 7 of the Italian Marketing Communication Self-Regulation Code (“Codice di auto-disciplina pubblicitaria). The code is the source of the above-mentioned principle that states that any form of commercial communication must always be recognisable as such. Furthermore, the Code says that «in the means and forms of commercial communication in which contents and information of other kinds are disseminated, commercial communication must be clearly distinguished by means of appropriate measures«.

The measures taken by the Control Committee involve not only influencers, but also companies, as the latter actually benefit from an activity that can be considered a form of surreptitious advertising.

Please, allow me a note.

Take for example the injunction no. 50/2018, regarding two Instagram’s posts of the influencer Chiara Nasti, that portrayed her with products marked with the trademark «Sunsilk»: having noted that the two posts of Nasti’s Instagram profile violated the above-mentioned art. 7 of the Italian Marketing Communication Self-Regulation Code, the injunction states the essential need for  «transparency of communications«, that allows an effective distinction, and not a merely formal one, of promotional communications from any other type of communication.

Analyzing the guidelines elaborated on this matter by the IAP, the so-called «Digital Chart», it results that it is considered compliant for the purpose of the recognition of an advertising communication as such, that a post on Instagram or on another social network presents the hashtag #advertising, or even simply the hashtag #ad.

In this respect, the IAP’s guidelines may leave a little baffled. In fact, while recognizing that the choice in question is an attempt to mediate between the need to protect the consumer and the activity of influencer, it is legitimate to doubt about the effectiveness of the hashtag #ad. As a matter of fact, it is reasonable to doubt that the hashtag #ad, written under a picture on a social network, is in itself suitable to make it clear to the user and to the average consumer that the post ha an advertising message. In fact, it can be assumed that many users do not know that the term «ad» is the abbreviation for «advertising», especially considering that the average user of influencers is represented by young people aged between 14 and 18 years. In a nutshell, the hashtag #ad would be able to “disguise” the advertising activity.

On the other hand, the Italian Competition Authority (AGCM – Autorità Garante della Concorrenza e del Mercato) and some German judges (and the German legal system is known to be particularly attentive to new technologies law) also reached these conclusions. In this respects, it is worth reading the Case 13 U 53/17 of the Celle Higher Regional Court, that concerns to precisely the hashtag #ad and reaches conclusions similar to those mentioned above.

It should also be noted that, so far, it has been mentioned the Italian Marketing Communication Self-Regulation Code, a regulatory text issued by the IAP, whose injunctions or decisions bind exclusively the companies adhering to its system of self-regulation.

However, it is clear that, in cases such as those described above, is applicable a specific Italian legislation, the so-called Consumer Code (Legislative Decree no. 206/2005 – Codice del Consumo), Furthermore, surreptitious advertising violates the prohibition of misleading and unfair commercial practices, as stated in various articles of the Consumer Code.

The consequences are relevant, because the Consumer Code and its Implementing Regulations implicate the intervention of the Italian Competition Authority (AGCM) or the Italian Regulatory Authority for Communications (Agcom – Autorità Garante per le Comunicazioni), both having sanctioning powers toward any person (with particular reference to financial sanctions).

What arises from this brief examination is that this phenomenon is particularly interesting and widespread throughout the world.

The author of this post is Elena Carpani.

Last 7 June, legislative decree no.63 of 11 May 2018 implementing EU Directive no.2016/943 of 8 June 2016 on “on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure”, was published in the Official Journal of the Republic of Italy, pursuant to article 15 of Delegated Law no. 163 of 25 October 2017.

The purpose of this act was twofold: on the one hand, it assisted in matching the already existing Italian legislation – in particular, articles 98 and 99 of the Italian Code of Industrial Property – with the new EU legislation; whilst, on the other hand, it implemented new and more effective provisions of law on the protection of trade secrets.

The European Union introduced Directive no. 943/2016 in order to harmonize and ensure consistent protection of know-how and trade secrets on European level: in fact, irrespective of article 39 of the TRIPs Agreement, Italy was the only EU member having a domestic definition and a specific protection of trade secrets and no EU law has been passed governing their unlawful acquisition, use or disclosure. This factor weakened the ability of several countries to protect one of the most prominent intangible assets for industry 4.0 and next-generation innovative businesses.

Amid this European scenario, Italy maintained a privileged position vis-à-vis most of the other Member States, since provisions for specific protection of business know-how and confidential information had already been laid down under articles 98 and 99 of the Italian Code of Industrial Property. This is why Italian lawmakers intervened in articles 98 and 99 of the Italian Code of Industrial Property to merely replace the former language “business information and expertise” with the notion of “trade secrets”, while basically leaving the protections envisaged in article 98 of the Italian Code of Industrial Property unchanged to its earlier version, which was already in line with the EU rules.

Apart from this, the legislative decree supplemented the applicable rules and improved the standards of protection of trade secrets, pursuant to EU Directive no. 2016/943, to enable judicial decisions in protection of trade secrets to be weighed against, inter alia, the significance of such information, its importance for the claimant, and the precautionary measures implemented by the owner thereof.

In the first instance, paragraph 1-bis of article 99 of the Italian Code of Industrial Property has been introduced to take negligent behaviours into consideration on the matters of infringement of trade secrets, so that the acquisition, use, or disclosure of trade secrets may be held unlawful even when, at the time of the challenged circumstances, the individual was, or should have been, aware, as the case may be, that the trade secrets had been directly or indirectly obtained by the party that unlawfully used or disclosed them.

Quite the reverse, article 9, paragraph I, of the Directive has been fully implemented in article 121-ter on the preservation of confidentiality of trade secrets in the course of legal proceedings, irrespective of these being for precautionary measures or on the merits of the unlawful acquisition, use or disclosure of such trade secrets. According to such new provision of law, any (ordinary, civil or criminal, administrative or accounting) court of law will be entitled to prevent the counterparties, their representatives and advisors, legal counsels, clerical staff, witnesses, any court-appointed or delegated experts, and any other persons having access to the decisions, briefs and documents included in the court file, from using or disclosing the trade secrets discussed in the proceedings that the court may classify as confidential. In addition, it is expressly provided that such a prohibition shall maintain full force and effect after the conclusion of the proceedings in which scope it was imposed, while vice versa its effectiveness will be forfeited (i) in the event that the lack of the requirements set out in article 98 of the Italian Code of Industrial Property in order to have a valid trade secret is assessed by ruling, or (ii) where the trade secrets fall in the public domain or become easily accessible to industry players and experts.

Furthermore, in the same article specific measures were laid down for the preservation of confidentiality of trade secrets in the course of legal proceedings: hence, subject to compliance with the principles of fair trial, the judge will be entitled to adopt the most appropriate measures to preserve the confidentiality of the trade secrets discussed in the trial. Besides, the article explicitly sets forth two of the measures available to the judge: i.e., restricting access to hearings, briefs and documents included in the court file; and ordering the clerks to conceal the specific parts containing the trade secrets from the documents filed in the proceeding. However, because policymakers did not deem it appropriate to enable the judicial authorities to impose such prohibitions and measures by operation of law, they preferred leaving any request in this respect to the parties’ initiative, owed to the apparent high technical expertise required to appraise the confidential nature of such trade secrets.

With a view to ensuring a more accurate and effective preservation of trade secrets, criteria have been laid down (in article 124, paragraph 6-bis, of the Italian Code of Industrial Property), which the Judge will be bound to uphold when establishing the remedies and civil sanctions – and assessing whether these are suitable – in the proceedings on the matters of unlawful acquisition, use or disclosure of trade secrets under article 98. For this purpose, the Court is required to take into consideration the material circumstances of the case at issue, among which:

  • the value and other specific features of the trade secrets;
  • the measures implemented by the legal holder to protect the trade secrets;
  • the actions carried out by the infringer to acquire, use or disclose the trade secrets;
  • the impact of the unlawful use or disclosure of the trade secrets;
  • the parties’ legitimate interest, and how this may be affected by the endorsement or rejection of the judge’s measures;
  • the legitimate interest of third parties;
  • the interests of the general public; and
  • the need to ensure protection of the fundamental rights.

Not only will the Judge be bound to take these circumstances into consideration in the course of the proceedings on the merits, but also upon issuance of the precautionary measures sought by the trade secrets holder, and upon appraisal of their suitability, based on the explicit warning contained in new paragraph 5-ter of article 132 of the Italian Code of Industrial Property. Consequently, the Judge will issue a preliminary injunction or another interim measure only if the requesting company proved having adopted all the necessary measures and internal protocols to keep a given trade secret confidential.

According to new paragraph 5-bis of article 132 of the Italian Code of Industrial Property all proceedings aimed at seeking protective measures for trade secrets, as an alternative to the application of the precautionary measures, the judge may authorise the defendant to continue to use the trade secrets, subject to providing an appropriate security for compensation of any damages suffered by their legitimate holder, in any event, without prejudice to the prohibition to disclose the trade secrets authorised for use.

The precautionary measures adopted in protection of the trade secrets may be forfeited either for failure to commence the proceedings on the merits within the mandatory deadline (set out in article 132, paragraph 2, of the Italian Code of Industrial Property), or as a result of the claimant’s actions or omissions. Where the unlawful acquisition, use or disclosure of the trade secrets are subsequently found to be groundless, the claimant will be sentenced to repay the damages caused by the adopted measures.

As a further novelty, Legislative Decree no. 63/2018 introduced a compensation, payable as an alternative to the application of the measures under article 124 of the Italian Code of Industrial Property, which may be granted upon the interested party’s application, provided that all of the following requirements laid down by new paragraph 6-ter of article 124 of the Italian Code of Industrial Property are met: at the time of the use or disclosure, the claimant was not, nor should have been, aware that the trade secrets had been obtained by the third party unlawfully using or disclosing them; the execution of these measures would be unduly burdensome for the claimant; the compensation is commensurate to the damages suffered by the party seeking the application of relieving measures and, in any event, it does not exceed the amount that would have been paid on account of royalties for the use of the trade secrets throughout the challenged period of time.

A statute of limitations has been established in 5 (five) years for rights and actions connected with such misconducts.

As a final provision, in line with the availability of progressive measures and enhanced accuracy and effectiveness of trade secrets protections, which are the EU Directive basic principles, a list of the items is provided which the judge ought to appraise to order the publication of his ruling, and to weigh the suitability of the claimed measures: the value of the trade secrets; the actions carried out by the infringer to acquire, use or disclose the trade secrets; the consequences of the use or disclosure of the trade secrets; the risk of the infringer carrying on with the unlawful use or disclosure of the trade secrets.

Furthermore, to make the above appraisal the Judge shall also consider whether, based on the available information, a natural person may be identified as the actual infringer and, in the affirmative, whether the publication of such information is justified in the light of any potential damages that may be caused to the infringer’s private life and reputation.

In conclusion, articles 388 (wilful failure to enforce a court decision) and 623 of the Italian Criminal Code (disclosure of trade or science secrets) have been amended to improve the criminal reliefs granted under the Italian legal system, so as to include breach of trade secrets, and the measures connected therewith, among the misconducts sanctioned under the above provisions.

All that considered, a new approach in adopting internal rules and compliance’s procedures is required to companies and trade secrets owners in order to protect their confidential information and to safeguard their judicial protection and new language shall be adopted in drafting non-disclosure agreements: as a matter of fact NDAs were in the past very often merely copied and/or downloaded from the web without any juridical care and the due attention.

“Influencer Marketing” is a very well known topic to the jurists and operators of the advertising sector dealing with commercial communication.

There is a core principle in communication law: any form of commercial communication shall be clearly recognizable as such.

Before the diffusion of digital communication and, along with it, the proliferation of the so-called «Influencer Marketing», the issue of recognizability of commercial communication was generally discussed when evaluating whether an advertising content was clearly distinguishable from a journalistic or an informative content (such is the longstanding issue regarding the advertorial).

For a short period of time there was a debate regarding the so-called subliminal advertising, which eventually fell into oblivion.

The necessity to point out to the consumer whether the appreciation for a product or a service shown by a well-known person – precisely an “Influencer” – (i.e. the endorsement) is genuine or not has become a much encountered and controversial topic.

It shall not be considered as spontaneous when an individual receives remuneration for wearing a fashion item, for using a smartphone, or simply when he/she receives as a gift the products that he/she promotes or other valuable products.

It is clear and proven that the spontaneous choice of an “idol” by the public has a bigger impact on these same people rather than any traditional way of advertising. Hence the abuse of surreptitious advertising on the less easily monitored channel: the web, precisely.

What measures should be taken to ensure that the consumers can understand clearly whether a post is subject of a contract or not?

The answer would be very simple.

It would be enough to require the sponsored post to contain, in clearly visible characters, terms as “Advertisement”, “Sponsored by”, “Commercial agreement” or similar notices.

In Italy, in absence of a law regulating specifically the matter, both the Istituto della Pubblicità (Italy’s Advertising Self-Regulatory Institute) and the Autorità Garante della Concorrenza e del Mercato (the Competition Authority) have expressed their opinion on this subject.

In the Italian Advertising Self-Regulatory Institute’s digital chart it is written: “in order to make the promotional nature of content posted on social media and content sharing sites recognizable, celebrities/influencers/bloggers must at the top of their post state in a clearly distinguishable manner the words: “Pubblicità/Advertising”, or “Promosso da … brand/Promoted by…brand” or “Sponsorizzato da…brand/Sponsored by…brand” or “in collaborazione con …brand” or “in partnership with the …brand”; and/or within the first three hashtags (#) use one of the following terms: “#Pubblicità/#Advertising”, or “#Sponsorizzato da … brand/#Sponsored by the … brand “ or “#ad” along with “#brand”.

In a press release of 2017 the Italian Competition Authority has required the addressees the use of the following warnings to be placed below the post together with the others hashtags (#), such as “#sponsored, #advertising, #paidad”, or, in the case of products given for free to the celebrity, “#productsuppliedby”; in particular, all these wordings should be followed by the name of the specific brand being advertised.

However, browsing the Instagram’s pages of various Influencers, it is noticeable that only a few of them are actually using the indications provided by the authorities.

And when it happens to came across Instagram’s profiles that use such indications, it is noticeable that the hashtag that is most commonly used is “#ad”, whose effectiveness (especially in Italy where terms such as “advertising”, “Adv” and, even more so, “ad” are not easily decipherable by the average consumer) raises many concerns.

So far the Italian Competition Authority intervened sending moral suasion letters to some of the main influencers and companies producing the branded goods displayed in the posts, but still no self-regulatory, administrative or state measures have been taken.

The same situation of uncertainty is likely to be found in other countries (here you can find a previous Legalmondo post on this topic in Germany: https://www.legalmondo.com/2017/11/germany-product-placement-influencer-marketing/), with the consequence that international companies are operating in an unclear context, in which it is difficult to identify what are the risks arising from behaviours considered as unlawful.

I have therefore decided to write this article in order to assess the state of Influencer Marketing in Italy and in other countries and get a better understanding of the regulations in force, the measures/judgments issued by the competent Authorities, the international trends and the best practices that could be adopted by international companies.

Since I am one of the founders of the Digital Adv Lab – an interdisciplinary observatory that studies the legal implications of marketing and digital communication initiatives – I am interested in getting in touch with all the readers involved in this topic: please feel free to enter a comment and/or contact me.

The author of this post is Elena Carpani.

Under Italian law, the parties to a contract – both being private legal entities – are generally free to agree upon the court having jurisdiction on any disputes that may arise from such contract.

However, although such clauses are valid, their enforceability can be limited by certain formal requirements, which should be taken into account.

Curiously enough, such requirements are often stricter when both parties are based in Italy, looser when one of them is based abroad, particularly in another EU country.

Nevertheless, considering the current uncertainties in case law, a cautious approach in contract drafting is justifiable in any case.

Exclusive or non exclusive forum?

Let’s consider for example the following clause in a commercial contract between two private companies: «Competent court – The courts of Milan shall be the competent forum on any dispute«.

This clause apparently does not raise any doubts. However, it has recently held by the Italian Supreme Court (“Corte di Cassazione”) to be unenforceable, particularly from the point of view of its non-exclusivity ( Supreme Court Civil Section (Cass. Civ. Sez.) VI-3, order 25.1.2018 n. 1838).

In that case, an Italian company had the other party (another Italian company) sign its general contract terms containing the above mentioned clause. Notwithstanding that, the first company was then served with a payment order (“decreto ingiuntivo”) issued by the Court of Siena, where the second company had started lawsuit despite having approved the forum clause.

The first company was not successful in opposing against the payment order by raising the argument of the lack of jurisdiction of the Siena Court. In fact, it could not enforce the forum clause included in its general contract terms because the clause did not specify that the courts of Milan were the “exclusive” forum.

Therefore, to the opinion of our Supreme Court (actually confirming its own previous case law) in order for that clause to be enforceable as desired, it should have read: “The courts of Milan shall be the exclusively competent forum on any disputes”.

It is noteworthy, though, that the same general contract terms, if signed by a company based in another EU country different from Italy (e.g. France), could have successfully prevented the French company from starting lawsuit in France, even if the forum clause did not specify its exclusivity.

That is because Article 25 of EU Regulation n°1215/2012 expressly states that the “prorogation of jurisdiction” clause “shall be exclusive unless the parties have agreed otherwise”.

This was also confirmed by the Italian Supreme Court as well (see for example the decision n°3624 of 8.3.2012).

Now, what happens if the contractual partner of the Milan company is a company based in a non-EU country not bound by international treaties on the subject? For example, a U.S. company?

Would the clause “The courts of Milan shall be the competent forum on any dispute” be considered as exclusive or not, from the perspective of an Italian court?

Article 6 of Regulation 1215/2012 should lead the Italian court to interpret that clause as exclusive pursuant to Article 25 of the same Regulation. However, in similar cases in the past, Italian courts have considered such clauses as non-exclusive by applying the domestic rules of private international law (art. 4 of Law 218/95) and interpreting them in line with Article 29, second paragraph, of the Civil Procedure Code (see for example Tribunale of  Milan, 11.12.1997). As a consequence, in the case described above, if the U.S. company despite the above clause starts a lawsuit in its country, the decision issued in the U.S. may be recognized in Italy.

The Hague Convention of 30.6.2005 on forum selection agreements should solve the above and other issues, as it states (just like the European Regulation) that the chosen forum is exclusive except for an express agreement on the contrary. However, such Convention at the moment is in force only in a very limited number of countries (European Union, Mexico, Singapore).

In such an uncertain situation, if one wants the chosen forum to be exclusive regardless of where the other party is based, the most prudent approach under Italian law is certainly to specify exclusivity in the clause.

“Special approval” of unfair terms (art. 1341 of the civil code)

Another precondition of enforceability of forum selection clauses under Italian law, is the requirement of “special approval” of such clauses, if included in general contract terms. Pursuant to Article 1341, second paragraph, of the Civil Code, certain types of “unfair” clauses in general contract terms are unenforceable unless “specially approved” in writing.  Such “unfair terms” include also arbitral and forum selection clauses, if favorable to the party drafting the general contract terms.

According to the standing jurisprudence of our Supreme Court, such “special approval” in practice occurs by putting a second signature on the contract, which has to be autonomous and separated from the signature that normally is placed to approve the contract in its entirety.  Also, such second approval must expressly refer to each single unfair term, by citing number and heading of each such clause.

However, the special approval requirement for the forum choice clauses only applies to contracts between Italian parties, not to international contracts.

In particular, whenever EU Regulation 1215/2012 applies, the less stringent formal requirements set forth by Article art. 25 have to be complied with, even when the forum clause is part of general contract terms. In such a case, it is necessary and sufficient for the contract signed by the parties to include an express reference to the general terms containing the forum clause (see for example Cass. Sez. Un. 6.4.2017 n.8895). In case of general contract terms in a sale contract concluded electronically, a forum choice clause (again under the EU Regulation) can be validly accepted by a “click” (see EUCJ decision n.322 of 21.5.2015).

Even applying the Italian domestic rules in private international law (article 4, Law 218/95) – that is, essentially, in matters involving non-EU (or non-EEA/EFTA) parties – the “special approval” condition is not required for forum selection clauses, because such requirement is not expressly provided for by Article 4, and also by way of interpretation (Constitutional Court 18/10/2000, n. 428).

Notwithstanding the above, however, it has not yet been finally clarified whether or not the “special approval” requirement per Article 1341 of the Civil Code should also apply to international contracts (if governed by Italian laws) as a condition to enforce the other clauses that the law provision considers as “unfair”, such as for example limitation or exclusion of liability clauses.

Therefore, it is still very common in Italy to draft general contract terms, also for international contracts, providing for the other party’s second signature for special approval of the unfair terms.

All this, hoping for the Italian jurisprudence to develop a more modern and international approach in the future.

The application of the General Data Protection Regulation (“GDPR”), in force since 25 May 2018, will oblige companies to deal with issues concerning IT security and liability for collection and storage of personal data, without the possibility of any further hesitation. Privacy protection will become an important part of corporate culture and will have to be necessarily managed from the top levels, i.e. the managing director as well as the management team. Employees will also be involved in this awareness process through adequate training on such matter. Companies should set forth order and priorities of some data-related procedures, in accordance with privacy by design and privacy by default principles. In other words, such companies should ensure data protection from the onset of the product phase or service ideation and design, opting for behaviors that are aimed to prevent possible issues affecting personal data.

An even wider definition of personal data

The concept of “personal data” refers to all the information that identifies or makes a person identifiable and provides details related to his/her features, habits, life-style, personal relationships, health and economic conditions. Also, the definition of “personal data” becomes even wider and more well-structured when considering electronic communications with new technologies including geolocation bearing significant weight.

This transition, certainly problematic, introduces new challenges and opportunities, and highlights the question of data protection as a fundamental human right at the center of the international debate and digital policies. This results in a significant turning point. In fact, digitalization has caused several information security issues, which until a few years ago could be handled by national authorities in each single EU country, and now require a more focused and structured legal framework. The induction of platforms such as SaaS (Software as a Service) and the cloud computing growth have completely changed the scenario.

Therefore, the European Data Protection Supervisor (EDPS) positively dealt with the request to reform the legal framework on personal data protection in 2011, since the existing legislation was no longer appropriate.

Even though it is way too early to predict the impact of such privacy regulation, we believe that it is interesting to focus on certain general considerations and some of the GDPR’s outcomes in the international scenario.

The potential applicability of the GDPR worldwide

Certainly, one of the important changes brought about by the GDPR is its potential applicability worldwide: the regulation thus overcomes European borders in the name of personal data protection.

Such regulation, in fact, not only applies to all cases where data are handled by EU based companies, but in all cases where a company, even though not EU based, also deals with EU based individuals’ personal data, within the scope to offer them goods or services or to monitor their behavior in the EU.

Consequently, in the light of the above, all foreign companies still pursuing to offer and provide their services to EU-citizens cannot avoid complying with the GDPR.

Furthermore, even UK organizations may be forced to comply with the regulation to protect UK citizens’ personal data and maintain their competitiveness in the EU market, for reasons of opportunity and convenience, apart from compulsoriness as above described and, in any case, for as long as Brexit does not materialize.

The lack of connection with the data location

The regulation not only limits foreign companies that deal with EU citizens’ personal data, but also aims to govern all the processing of personal data, irrespective of the place where such data are located. It therefore provides that all the personal data processing made by EU based companies will be subject to the GDPR, regardless of the fact whether such processing is carried out within or outside the EU.

From a legal point of view, such data will be in the spotlight and subjected to this new regulation rather than to national laws. This means that the physical position loses relevance before the aim to grant interested individuals with a greater control on the information that is collected, processed and used by third parties.

For sure companies may stop their business with EU citizens in order to avoid compliance with the GDPR principles, but such choice should be correctly made: i.e. the GDPR’s application should be taken into account when a company provides a web service which is available also to EU citizens.

The disposition of strict fines

The fines for companies that are not in compliance with such regulation can amount to up to 4% of their global revenue and up to Euro 20 million. The relevance of such measures drew attention of all the parties, particularly in the US where organizations have a strong presence in the EU. Furthermore, the GDPR applies to organizations of any dimension and to both individual enterprises as well as large companies.

The forward-looking companies started to set forth their compliance programs immediately after the EU regulation announcement, but this appears complex and as a result meeting the set deadline called for 25 May could be difficult.

According to PwC’s reports, 9% of US companies declare to have allocated more than 10 million dollars with the aim to obtain such compliance.

Some compliance requirements for companies

  • Accountability principle: data processing needs to be carried out by recorded procedures, regardless of the fact that such procedures will be managed by the companies or by third parties on their behalf. Doing so will make the data controller responsible and oblige him to be compliant with the GDPR.
  • Risk based approach: the driving force of such a regulation is the aim to make companies responsible, which are therefore asked to comply with the GDPR principles by adopting a new risk based approach and risks assessment.
  • Clear and concise consent: much attention is paid to the consent of personal data processing, which should be clear, concise, distinguishable and unequivocal.
  • Data protection by design and by default: privacy management and implementation executed by means of default settings since the design phase; it means that companies should take into account the personal data protection, from the beginning a product, service or app is designed and developed.
  • Right to be forgotten: individuals are entitled to obtain, without delay, that their data is deleted by the data controller when certain conditions- provided by the GDPR -are met, such as for example when data become redundant and no longer necessary, or regarding the aims for which data have been collected or in the event when the individual’s consent is withdrawn.
  • Right to data portability: individuals are entitled to receive their personal data in a frequently-used, well-structured and machine-readable format, so as to transfer such data to another data controller, excluding any possible encumbrance by the former data controller.
  • Appointment of an EU Representative: the Representative should act on behalf of the data controller or the data processor and may be questioned by any surveillance Authority.

How to make the transition process easier?

The EU regulation relating to personal data protection requires a strong legal formation and, at the same time, tremendous technical implementation skills on the basis of the ongoing digitalization processes and use of even more innovative and complex technologies.

In such regard, companies may rely on professionals who are able to provide multidisciplinary services and consultancy, not only of a legal and IT nature, but who can exchange and implement synergies between professionals and business workers such as engineers and mathematicians.

Consequently, this burdensome commitment to follow the GDPR together with the obligation to comply with the law shall also enable companies to combine the aforesaid skills and join forces to commence a transition process that will ensure and ultimately result in growth.

The author of this post is Giorgio Piccolotto

La cuestión del litisconsorcio necesario respecto a los beneficiarios de un trust en la acción revocatoria es objeto de amplio debate desde hace tiempo lo que ha llevado a dos corrientes contrastantes entre ellas, superadas por la reciente sentencia del Tribunal de Casación n. 19376 del 3 de agosto de 2017.

Según una primera corriente, los beneficiarios del trust no deben considerarse partes necesarias del juicio de revocatoria porqué el objeto de la demanda no es el acto con el que se constituye el trust sino el sucesivo acto dispositivo, llevado a cabo por el “settlor” con el que el nuevo ente, en la persona del trustee, viene dotado de un patrimonio, sin que sea solicitada la participación de los beneficiarios.

Los beneficiarios no podrían considerarse litisconsortes necesarios ya que no siendo directamente titulares de los bienes otorgados en el trust no sufririan en la hipótesis de revocación del acto dispositivo de un perjuicio sino que al máximo se lesionaría un mero interés a la integridad patrimonial del ente.

No estando dotado el trust de personalidad jurídica sino siendo un conjunto de bienes y relaciones destinadas a un fin determinado, en interés de uno o mas beneficiarios y formalmente a nombre del  «trustee», este último resultaría ser el único sujeto que además de poder disponer en via exclusiva de los derechos otorgados en el patrimonio vinculado, estaría legitimado a oponerlos en las relaciones frente a terceros, incluso defendiéndose en juicio (Tribunal de Apelación de Milán, sentencia de 25 de noviembre de 2016): de hecho solo frente a dicho “trustee”  el acreedor del “settlor” podría correctamente iniciar la ejecución forzosa, una vez reconocida la ineficacia relativa del acto dispositivo a consecuencia del juicio de revocatoria.

Según otra orientación, en cambio, los beneficiarios del trust deben considerarse litisconsortes necesarios en el juicio de revocatoria ya que, aun no siendo titulares del patrimonio vinculado, estarían de todas formas interesados en los efectos de la sentencia que dispone la revocació del acto por el que se otorgan los bienes al trust, siendo su posición sea jurídica que de hecho perjudicada por los efectos de dicha resolución.

A una conclusión análoga se podría llegar incluso a través de una interpretación en sentido contrario de la jurisprudencia en materia de fondo patrimonial.

Con referencia a dicha figura, la Casación ha, de hecho excluido la legitimación pasiva de los hijos de los que lo constituyen, en juicios análogos, en cuanto los mismos no podrían tener pretensiones judiciales directamente frente a sus padres administradores del fondo patrimonial (Casación Civil, sentencia n. 10641 de 15 mayo de 2014, Casación Civil, sentencia n. 18065 de 8 septiembre de 2004; Casación Civil, sentencia n. 5402 del 17 de marzo de 2004) .

Los beneficiarios del trust, en cambio, pudiendo tener pretensiones sea frente al trust que frente al trustee, deberían considerarse litisconsortes necesarios en todos aquellos juicios que se refirieren a cualquier aspecto del acto dispositivo (S. Bartoli, Azione revocatoria di trust e litisconsorzio necessario rispetto ai beneficiari: la prima pronunzia della Cassazione, Il Caso, 22 de Noviembre de 2017).

A aclarar la cuestión ha intervenido recentemente el Tribunal de Casación que, con la sentencia n. 19376 del 3 de agosto 2017, ha propuesto soluciones alternativas a aquellas apenas comentadas, capaz de terminar en parte con el contraste interpretativo descrito.

El caso examinado por los magistrados y relativo al otorgamiento de determinados bienes, antes a un “fondo patrimonial” y sucesivamente a un trust, por parte de unos conyuge que, a través de dichos instrumentos, han destinado parte del proprio patrimonio a las necesidades de vida y de estudio de los hijos.

Los actos dispositivos han sido pero considerados perjudiciales para los propios intereses por un banco, acreedor de uno de los cónyuges, que ha por lo tanto ejercitado la revocatoria, obteniendo sea en primer que en segundo grado, la declaratoria de ineficacia, en virtud del art. 2901 c.c, del “fondo patrimonial” y del trust.

Contra la sentencia de apelación, los cónyuges han propuesto recurso de Casación, por falta de integración del contradictorio en el juicio de apelación, no habiendo el Tribunal de Apelación ordenado la intervención en el proceso de los hijos – benericiarios y solicitando, por tanto, la nulidad de todo el proceso.

Los magistrados del Tribunal de Casación, examinado el caso, no han considerado válidos los motivos propuesto con el recurso.

Según el Tribunal de Casación, de hecho, en la hipótesis de “fondo patrimonial”, no produciéndose ninguna mutación en la titularidad de los bienes, que siguen siendo de titularidad de padres – constituyentes del fondo y que no surgiendo ningún derecho subjetivo a favor de los hijos beneficiarios, estos no pueden ser en ningún modo considerados litisconsortes necesarios en el juicio de revocatoria del fondo, como es afrirmado por constante jurisprudencia sea de los Tribunales de Apelación que de Casación (véase la anteriormente citada).

Según el Tribunal de Casación se llega a una conclusión análoga con referencia al trust.

En relación a dicha cuestión los magistrados del Tribunal de Casación consideran no poder adherir a ninguna de las orientaciones que se han formado en jurisprudencia, y ofrecen, como anticipado, una tercera via interpretativa según la cual los beneficiarios del trust pueden ser considerados legitimarios pasivos en la revocatoria solo cuando el acto costitutivo del trust reconozca a los mismos la titularidad de derechos actuales sobre bienes otorgados al mismo.

En ausencia de un expreso reconocimiento de dichas prerrogativas, el único legitimado pasivo en el juicio de revocatorio es el trustee.

El trust, de hecho, se convierte en operativo, explica el Tribunal de Casación, mediante dos tipologías de actos, el primero de caracter unilateral, finalizado exclusivamente a la sua institución y el segundo (o los segundos, pudiendo el “settlor” proceder a una pluralidad de negocios distintos) de natura dispositiva, dirigido a transmitir los bienes al trustee.

Si el acto costitutivo por si mismo no parece idóneo a determinar ningún  perjuicio a los acreedores del “settlor”, no afectando la consistencia de su patrimonio y, por tanto, su capacidad de cumplir con las propias obligaciones, no se puede decir lo mismo de los actos con los que lo bienes se transmiten al trustee, el cual convirtiéndose en el único sujeto legitimado a disponer de los mismos, se convierte en el único a poder oponerse en un juicio para tutelarse.

Es claro dicho aspecto, los jueces del Tribunal de Casación han observado además como el eventual interés de los beneficiarios a la correcta administración del patrimonio otorgado en el trust no represente, desde un punto de vista teórico, una hipótesis de interés directo e inmediato a intervenir en el juicio de revocatoria, que justifique la participación de los beneficiarios como litisconsortes necesarios.

El interés a la correcta administración del trust constituye una posición jurídica que se refiere exclusivamente a las relaciones entre los beneficiarios y el “trustee” y que, en ningún modo puede afectar a los acreedores del “settlor”.

A una conclusión distinta se podría llegar cuando el regolamento del trust hubiese permitido de calificar los beneficiarios como actuales beneficiarios de la renta o como beneficiarios finales con derecho inmediato a recibir la titularidad de los bienes otorgados en trust, independientemente de cualquier valoración discrecional del “trustee “.

Solo così, de hecho, los beneficiarios habrían podido hacer valer un interés directo e inmediato en la controversia que justificaría la necesidad de citarlos en juicio.

Por lo tanto, en las hipótesis en que los beneficiarios no sean titulares de derechos subjetivos actuales sobre bienes otorgados al trust, además del deudor, legitimado pasivo en la acción revocatoria es solo el “trustee”, en cuanto único sujeto de referencia en las relaciones con terceros y por tanto también en las relaciones con los acreedores del “settlor”, único titular de los derechos sobre bienes sujetos a “segregación”.

La solución ofrecida por el Tribunal de Casación es homogénea con cuanto previsto por el derecho inglés, en el que nuestro ordenamiento se ha inspirado para la figura del trust, según la cual en los juicios  iniciados por los acreedores del “settlor” frente al trust, la protección de este se encarga al trustee, en lugar o junto con los beneficiarios (Di Sapio, Muritano, “Solo il «trustee» partecipa al giudizio di revoca del trust”, Il Sole 24 Ore, 9 de noviembre de 2017).

Por lo tanto, como en Italia, también en los sistemas anglosajones los beneficiarios no son parte necesaria del proceso pero pueden intervenir volontariamente en el mismo para evitar ser perjudicados por la sentencia de revocatoria.

El autor de este artículo es Giovanni Izzo.

According to Italian Copyright Law and to different European countries legislations, advertising creations and campaigns are not protected by copyright.

Articles 1 and 2 of the Italian Copyright Law list many copyrighted works but do not include advertising claims and creations, even through a broad legal interpretation.

The Italian Advertising Self-Regulatory Code (Codice di Autodisciplina della Comunicazione Commerciale, hereinafter the “Code”) and the Italian Self-Regulatory Jury (hereinafter, the “Jury”) should overcome such legal gap.

Article 13 of the Code provides the following:

“Art. 13 – Imitation, Confusion and Exploitation

Marketing communication should not copy or slavishly imitate that of others even if it concerns non-competitive products, especially if there is the risk of generating confusion with the marketing communication of others.

Moreover, any exploitation of the name, trademark, notoriety and corporate image of other marketers should be avoided, if it is intended to generate an undue advantage.”

According to the Jury case law, which often applied art. 13 of the Code, it is clear that there are two requirements for and advertising in order to obtain a legal protection: novelty and originality.

It is new an idea which has never been used or it is not in the consumers’ memory.

It is original an idea which consists in a significant creative effort.

Advertising campaigns that use stereotypes are not original, thus they are not protected by law: e.g. the idea consisting in a side-by-side comparison of two dishes in order to show a detergent effectiveness.

Another principle consists in the balance between originality and protection against imitation: the more an advertising is original (id est, it is not descriptive of the advertised product), the more it is protected against similar advertisings.

Art. 13 of the Code protects both the “heart” (the idea) of an advertising campaign and the form: so, if an advertising has a different heart and an identical claim or form compared to a previous one, it infringes art. 13 of the Code.

The Jury case law stated over the years a fundamental principle: when there is an identical copy of an idea or a claim of a third party (particularly if by a competitor), the originality degree required by the first advertising in order to obtain a legal protection is almost null.

Even simple and ordinary ideas can be protected under art. 13 of the Code if they are slavishly imitated, particularly by a competitor which sells product of the same category.

The Jury, in its decision n. 5/2018, seems to have changed its orientation on the matter, especially concerning the requirements of novelty and relevant imitation.

The decision concerned two competitors in the fruit and vegetable sectors: La Linea Verde (owner of the trademark “Dimmidisì” (say yes to me) and manufacturer of product labelled by such mark) and Del Monte.

La Linea Verde started to use the claim “Tutti dicono di sì” (all say yes) at the beginning of 2017 in various online and paper campaigns and in a trade fair.

After a few months (October 2017) Del Monte started to use the claim “Tutti dicono sì” (all say yes – with a slightly different wording) in its advertising campaigns.

Thus, La Linea Verde sent to Del Monte a cease and desist letter and later filed a complaint before the Jury claiming the infringement of art. 13 of the Code.

In the decision, the Jury:

  1. after stating that the claims “Tutti dicono di sì” e “Tutti dicono sì” are identical, both by the form (the word “di” is not relevant) and by the content, because both the claims suggest adhesion to the products by the consumer;
  2. after stating that La Linea Verde has a prior use of the claim and stating that the publishing of the claim on the web and on a trade fair, even if not reported on an advertising search engine (like Easy Way), are appropriate in order to prove the prior use of a claim;
  • after stating that the claim has never been used in that market and in different markets in the past decade;

the Jury eventually stated that Del Monte slogan has to be considered “a logical development of an advertising idea that Del Monte, undeniably, has been proposed for a long time”, referring to the ’80s and ’90s popular advertising “L’uomo Del Monte ha detto sì” and to the less popular “Sì al meglio, sì a Del Monte”.

The Jury stated that, even if there is a formal overlapping between the claims, the advertisings have their own aspects and they cannot be overlapped in the consumer’s perception (and, in my opinion, this is contradictory, because the Jury previously recognized in the same decision that the claims had the same meaning: suggesting the adhesion to the products by the consumer).

It seems this is a change of course by the Jury concerning claim imitation and likelihood of confusion (art. 13). The Jury stated that it is possible to use two identical (form and content) claims, both original, because there is “a logical development” between an expression (“Tutti dicono sì”) and a communicative path (“to say yes” by Del Monte).

It is a change of course that, in the future, may create some problems to creative directors and lawyers: it will not be sufficient to monitor if a claim has been already used by third parties, but it will be necessary to check if an advertising is “a logical development” of a different communication by a third party. This would result in a subjective judgment which affects the fundamental legal certainty principle.

The author of this post is Elena Carpani.

Christian Montana

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