The protection of Know-How in Italy

The last article dealt with the object of know-how. Now, we have to analyze what is the protection of secret information.

Article 99 of Industrial Property Code (IPC) – subject to the law of unfair competition – gives the rightful holder of company information and experience the right to prohibit third parties, except for its consent, to collect, disclose to third parties or use such information and experiences in unauthorized manner, unless they have been collected independently by the third party.

Therefore, such a provision provides for:

  • An effective protection of secret information that can be exercised against anyone;

  • Protection that does not concern any type of infringement, but subject to the fact that the acquisition occurred in illegal way, that is, beyond legitimate ways, such as derivative acquisitions by negotiation (finding the product on the market, subsequent analysis, evidences, etc.), those ones obtained by means of reverse engineering (i.e. the case where technical solutions are replicated through a “backward reconstruction” procedure) or the acquisition by original grant, for independent creation.

Therefore, on one side, art. 99 IPC provides for the prohibition of any behaviour that is intended to acquire, disclose or use secret information without the consent of its rightful holder; on the other side, the provision does not include protection in cases where information was acquired autonomously by the claimed infringer and also the assumption in which the access to such data did not involve an illegal, direct or indirect encroachment of the rightful holder’s private sphere by the one who acquired them.

According to line of decisions, (see case Grace/ Foreco Court of Milan ord. 3.10.1994 GADI, 3153; Court of Milan 2-2-00 GADI 00,4133; App. Milan 29.11.02 GADI 02, 4533) and major legal literature, the character of the abusiveness of ways in which the acquisition of secret information occurred can be obtained according to inductive criteria.

In particular, under the provisions of the Grace/Foreco judgment, the following characters are considered serious, precise and consistent indications:

a) the identity of knowledges and formulas, also in the sense of a derivation of the products of the claimed infringer from the formulas of the information holder;

b) the existence of elements from which a long and costly research can be inferred by the information owner in a technologically advanced sector;

c) the arrangement of the secrecy means by the information holder resulting also from circumstantial elements such as particular precautions resulting from documents in possession of the same;

d) the impossibility of going back to formulas through the products sold on the market;

e) the fact that the third party did not spend for the research such an amount which justifies the autonomous identification of formulas of all the products on the market;

f) the transfer of employees or collaborators from the company holding the information to the company of the third party.

The reference to the law of unfair competition, disclosed in art. 99, implies that the art. 2598 C.C. is applicable, on a complementary basis, if the deeds of purchase, use and disclosure – despite having as object information that cannot be classified as “secret information” due to lack of the requirements provided for in art. 98 IPC – comply with the subjective and objective requirements prescribed for unfair competition, such as in the case of the misappropriation of objectively confidential data for which no secrecy measures have been taken.

In view of the foregoing, it is clear that the art. 99 IPC provides for a broad protection of know-how which not only includes the protection provided by article 2598 C.C. in the field of unfair competition, but also extends to the protection granted to traditional industrial property rights (patents, trademarks, etc.).