• LATEST NEWS & INSIGHTS 15 December 2023

    Posted on: 15/12/2023


    THE DISTINCTIVE CHARACTER OF THE “VESPA” IS NO LONGER IN QUESTION: THE CONFIRMATION OF THE EU GENERAL COURT.

     

    The “Vespa” cannot be touched: the shape of the scooter has an “iconic character” that distinguishes it all over the world, representing a brand that must be protected from attempts at imitation.

     

    The legal battle between Piaggio & C. SpA (“Piaggio”) and Zhejiang Zhongneng Industry Group Co. Ltd (“Zhejiang”), which began in 2014, ended in Piaggio’s favour on November 29th 2023 with the decision of the EU General Court in Case T19/22.

     

    On March 25th, 2013, Piaggio filed an application with the European Union Intellectual Property Office (“EUIPO”) for registration of a three-dimensional European trademark corresponding to the shape of a “Vespa” scooter, the image of which is filed at the Alicante headquarters:

     

     

    The request was accepted by the EUIPO and consequently the shape of the “Vespa” became a registered European three-dimensional trademark.

     

    However, less than a year after the registration of the trademark, on April 29th, 2014, Zhejiang filed an application for a declaration of invalidity of the trademark at issue. This application was rejected in its entirety by the Office.

     

    However, this defeat did not stop the Chinese company which, on February 17th, 2021, appealed against the decision of the cancellation division.

     

    It is precisely in that context that the applicant’s arguments are endorsed by the Board of Appeal, which upholds the reasons raised by Zhejiang and declares the trademark at issue to be invalid.

     

    Piaggio, however, did not surrender to the decision of the Board of Appeal and lodged a new appeal with the EU Court, where the situation was – once again – subverted in favour of the appellant (it is no coincidence that there was talk of a “legal battle”).

     

    What led the EU General Court to annul the decision of the Board of Appeal?

     

    The reasons that led the EU General Court to rule in favour of Piaggio mainly concern the fact that the Board of Appeal wrongly found that the evidence of distinctive character acquired through the use of the contested mark was insufficient.

     

    In that regard, it should be noted at the outset that, under Article 52(2) of Regulation No 207/2009: An EU trade mark registered contrary to the provisions of Article 7(1)(b), (c) and (d) may not be declared invalid if, by reason of the use which has been made of it, it has acquired distinctive character after registration for the goods or services for which it has been registered”.

     

    According to the case-law, in order to determine whether a trademark has acquired distinctive character through the use which has been made of it, the competent authority must carry out a specific examination and make an overall assesment of the factors capable of establishing that the trademark has become capable of identifying the goods or services in question as originating from a particular undertaking.

     

    A number of factors come into play in this assessment, including the market share held by the trade mark, the intensity, geographical scope and duration of use of that trade mark, the extent of the investments made by the company to promote it, the percentage of interested parties who identify the product as originating from a specific undertaking by means of the trade mark, the declarations of chambers of commerce and industry or other professional associations, as well as opinion polls.

     

    In the case at hand, as stated in the judgment of the EU General Court, the “presence of the “Vespa” in the Museum of Modern Art in New York, the numerous extracts from online newspapers that all highlight that, according to international design experts, the “Vespa” is part of the twelve objects that have marked world design over the last hundred years, the photographs contained in the publication entitled “The Myth of the Vespa”, which show the use of “Vespa” scooters in world-famous films, such as “Vacanze Romane”, or the presence of “Vespa clubs” in many Member States, which were suitable to demonstrate the iconic character of the “Vespa” and, therefore, its global recognition, also across the Union”.

     

    Accordingly, the General Court concludes that the Board of Appeal erred in its assessment in failing to take account of that evidence, which was, on the contrary, capable of demonstrating the distinctive character acquired through the use of the contested mark throughout the European Union.

     

    The decision of the EU General Court therefore confirms the validity of the European three-dimensional trademark concerning the shape of the famous Piaggio “Vespa”.

     

     

    m.baccarelli@macchi-gangemi.com
    c.bonino@macchi-gangemi.com
    a.torchia@macchi-gangemi.com

     

     

    THE NEW PAID VERSION OF FACEBOOK AND INSTAGRAM IN EUROPE: CONCERNS ABOUT GDPR COMPATIBILITY

     

    Subscribing to the ad-free version or giving consent to profiling to continue enjoying Facebook and Instagram for free? Why has Meta introduced this new business model and what are the consequences in terms of personal data protection.

     

    As of 6 November 2023, Meta Platforms has modified its policy, introducing a “pay or okay” business model by proposing a subscription for Facebook and Instagram users, ensuring their data is not processed for behavioural marketing purposes. Specifically, users of these social networks were asked to subscribe to a monthly plan of € 12.99 to avoid profiling or, alternatively, to explicitly consent to behavioural advertising to continue using the platforms for free.

     

    This new strategy by Meta aligns with a complex legal context. In December 2022, the European Data Protection Board (EDPB) issued two binding decisions on the legality and transparency of data processing activities for personalized advertising conducted by Facebook and Instagram. These decisions recognized a violation of GDPR by Meta, pointing out that the user-platform contract does not constitute a suitable legal basis for such data processing. Due to the absence of an appropriate legal basis for targeted advertising data processing, the Irish Data Protection Authority imposed a fine of € 390 million on Meta Ireland on 31 December 2022.

     

    In this context, the Court of Justice of the European Union, in its judgment of 4 July 2023 “Meta Platforms and Others (General terms of use of a social network) – C-252/21”, clarified that the legal basis of the performance of the contact can only be invoked if data processing is objectively essential for the main purpose of the performance of the contract. Furthermore, the Court declared that the “legitimate interest” of the data controller cannot justify Facebook’s personalized advertising used to finance the social network itself. Consequently, Meta’s only viable legal basis for users in the EEA is obtaining their explicit, informed, and specific consent. Lastly, on 27 October 2023, the EDPB adopted an additional Urgent Binding Decision, requiring Meta to obtain users’ consent for behavioural advertising.

     

    To comply with these decisions and, in general, with the European regulatory requirements, Meta Ireland has introduced a new subscription model for users, based on an observation made by the CJEU in the aforementioned judgment of 4 July 2023 that allows the social network to introduce an equivalent alternative to ads for an “appropriate fee” if users choose not to consent to data processing operations not necessary for the performance of the contract, such as personalized advertising.

     

    However, even this new system raises doubts about its compatibility with European regulations on personal data processing. Firstly, the most advanced criticism concerns the appropriateness of the requested price, which, according to the Austrian activist Max Schrems, seems purposely disproportionate to discourage this option considering that Meta’s revenues are primarily based on personalized advertising. Moreover, it has been noted that the system in question would set a dangerous precedent, as other companies might emulate this approach, making the “cost of privacy” unsustainable for personal data protection on the web.

     

    Furthermore, the effectiveness of the “freely given consent” – required from users who choose to continue using the service with targeted ads – remains dubious, considering the asymmetry of information and the power imbalance between Meta and users. However, GDPR prohibits conditioning the use of a service on consent to not necessary data processing (Instagram and Facebook services would function perfectly without profiling). Moreover, the EDPB highlighted that consent cannot be considered free if its refusal implies a significant additional cost for the data subject. Lastly, this business model may not be compatible with the right to object to data processing for direct marketing purposes.

     

    In conclusion, this is an unprecedented scenario in the Big Tech world, already experimented by European journalistic websites, with which a factual existing situation has been made explicit: personal data becomes an alternative form of payment to money. It is now the responsibility of European institutions to assess the compatibility of this mechanism with Union law and to determine whether Meta’s approach may represent a risk to the fundamental rights of European citizens.

     

     

    l.caprio@macchi-gangemi.com

     

     

    WHAT DOES THE NEW “ENERGY DECREE” ENVISAGE?

     

    With the new Decree-Law No. 181, which was published on 9 December and came into force the following day, the government adopted a measure that intervenes across the board in the energy sector, providing for measures with three different purposes: support for energy-intensive companies; promotion and development of renewable sources; and national energy security and decarbonisation.

     

    Below are some of the most significant innovations.

     

    1. Article 1 of the Energy Decree intervenes in support of energy-intensive companies: in the case of several competing applications for the concession of public areas for the construction of plants for the production of electricity from renewable sources, projects aimed at satisfying the energy needs of entities registered in the list of energy-intensive companies established by the Cassa per i servizi energetici e ambientali (CSEA – Energy and Environmental Services Fund) will be preferred. These projects must be carried out directly by the energy-intensive enterprises, even through aggregation, or by third parties with which the enterprises themselves sign forward supply contracts for renewable energy, for a total power output of at least double the one being returned.

     

    For the first three years, GSE will be able to anticipate the effects of the construction of these plants, guaranteeing renewable energy at a price in line with the costs of the technology, which must be repaid in the following 20 years.

     

    2. Article 2 follows the same direction, promoting new procedures by GSE for the long-term procurement of domestically produced natural gas at reasonable prices, based on existing or new concessions. Natural gas may be purchased as a priority from gas-intensive industries.

     

    The last paragraph of the provision intervenes, instead, in the area of national energy security, reinforcing the centrality of already authorised on-shore LNG regasification terminals, whose construction and operation, as well as the related infrastructures, are considered as strategic interventions of public utility, which are urgent and cannot be postponed.

     

    3. For the purpose of promoting and developing renewable sources, Article 4 provides for the establishment of a new fund to finance the adoption of compensation and environmental and territorial rebalancing measures in regions that host RES plants. The fund will be maintained with a share of the proceeds of CO2 auctions for an amount of up to 200 million euros per year until 2032 and with a contribution, equal to 10 euros for each kW of power, from the owners of renewable source plants with a power exceeding 20 kW, authorised to start from 2024 and for the first three years of operation of the plant itself.

     

    A subsequent decree of the MASE – Ministry of Environment and Energy Security will establish the methods and criteria to allocate the fund’s resources among the regions, taking into consideration, as a priority, the levels of achievement of the annual installed power targets.

     

    4. With the same purposes, but also for the purposes of national energy security, Article 8 aims to promote the creation of a national strategic hub in the sector of design, production and assembly of floating platforms and electrical infrastructures functional to the development of shipbuilding for the production of wind energy at sea.

     

    To this end, a notice is to be published for the acquisition of expressions of interest by the Port System Authorities, for the identification, within two ports in southern Italy, of state-owned areas earmarked for the construction of infrastructures suitable for ensuring the development of investments in the shipbuilding sector.

     

    5. Finally, two measures adopted to guarantee energy security and decarbonisation should be mentioned.

     

    The first, set forth in Article 7, concerns the regulations for the issuance of permits for experimental projects for the storage of CO2 within depleted hydrocarbon reservoirs.

     

    The second, set forth in Article 11, provides for the possibility for territorial entities whose areas are not included in the National Map of Suitable Areas (Carta Nazionale delle Aree Idonee – CNAI) to self-candidate to host the Technology Park – within which the National Radioactive Waste Repository will be built – on their territory.

     

    The Energy Decree must be converted into law by 7 February 2024.

     

     

    f.angelini@macchi-gangemi.com

     

     

    THE LAZIO REGIONAL ADMINISTRATIVE COURT SUSPENDED THE EFFECTIVENESS OF THE DECREE DATED SEPTEMBER 29, 2023 ISSUED BY THE MINISTRY OF ENTERPRISE AND MADE IN ITALY REGARDING “CONFIRMATION OF THE OPERATION OF THE DATA COMMUNICATION SYSTEM AND BENEFICIAL OWNERSHIP INFORMATION.”

     

    By decree dated September 29, 2023, the Ministry of Enterprise and Made in Italy has set up the data communication system and beneficial ownership information of companies with legal entity, private legal entities, trusts producing legal effects relevant for tax purposes and legal institutions similar to trusts. The system had already been provided for by the Decree dated March 11, 2022, no. 55 of the Minister of Economy and Finance, in consultation with the Minister of Economic Development.

     

    In light of the decree of September 29, 2023, December 11, 2023 was the deadline of the 60-day peremptory period by which to communicate the data and information referred to in paragraphs 1 and 2 of Article 3 of Decree No. 55 of 2022, according to which:

     

    (1) The directors of enterprises with legal entities and the founder, if alive, or the persons conferred with the representation and administration of private legal entities shall inform the business registry office of the Chamber of Commerce with territorial jurisdiction, the data and information regarding beneficial ownership, acquired pursuant to Article 22, paragraphs 3 and 4, of the Anti-Money Laundering Decree, for their registration and storage in the autonomous section of the business registry;

     

    (2) The trustee of trusts or related legal institutions shall notify the business registry office of the Chamber of Commerce with territorial jurisdiction, the data and information relating to beneficial ownership, acquired pursuant to Article 22 (5) of the Anti-Money Laundering Decree, for their registration and storage in the special section of the business registry.

     

    Surprisingly, by ruling dated December 6, 2023, the Lazio Regional Administrative Court – taking into account the relevance of the legal situations likely to be affected irreparably by the imminent expiration of the deadline for compliance with the disclosure obligations and – considering worthy of protection the plaintiff’s interest (which operates in the fiduciary registration sector) in the maintenance of the res adhuc integra until the definition of the judgment on the merits – suspended the effectiveness of the decree of the Ministry of Enterprise and Made in Italy dated September 29, 2023, and set the public hearing on the merits of the appeal on March 27, 2024.

     

    The arguments made in the interlocutory proceedings before the Regional Administrative Court are not known, and we have to wait until next spring to know, on the merits, what will be decided.

     

     

    v.spinelli@macchi-gangemi.com

     

     

    DOES THE RESEARCH AND DEVELOPMENT CREDIT NOT ENTERED IN THE RU SECTION OF THE TAX RETURN QUALIFY AS A NON-EXISTENT OR NON-ALLOWABLE CREDIT?

     

    The answer is not at all obvious. The correct distinction between non-existent and unallowable credits, with the consequent effects, remains a far from settled issue. For the local Revenue offices, there are no doubts: if recovered, the R&D tax credit is non-existent. Jurisprudence and, above all, logic opinions, are of the opposite belief.

     

    The starting point is the distinction between a non-entitled or non-existent tax credit: a tax credit is defined as non-entitled if the taxpayer, while intending to comply with the legislative prerequisite, commits errors in qualifying or quantifying it. On the other hand, the tax credit is to be defined as non-existent if the determination of the credit was made in the absence of documentation or on the basis of false documentation.

     

    There are then several tax implications, both in relation to the time limits for assessment (longer for non-existent credits) and in relation to the applicable sanctions (more severe for non-existent credits). In particular, in relation to non-existent tax credits, the applicable provision is Article 27, paragraph 16, of Law Decree No. 185/2008, which provides that for non-existent credits improperly compensated, the notice of assessment must be served by 31 December of the eighth year following the year in which the compensation took place. With regard, on the other hand, to unallowed credits, the applicable provision is set forth in Article 43, paragraph 1 of Presidential Decree No. 600/1973, pursuant to which notices of assessment must be served, under penalty of forfeiture, by 31 December of the fifth year following the year in which the tax return was filed. In terms of sanctions, Article 13, Legislative Decree No. 471/1997, provides for a 30% sanction in case of using a tax credit in excess of the amount due, and a sanction from 100% to 200% of the credit in case of using non-existent credits as compensation.

     

    Thus, the debate concerning the qualification of the non-existent or non-allowable tax credit for non-declared research and development as a tax credit has given rise to many disputes. According to the Revenue Office, failure to fill in the RU section is interpreted as the non-existence of the prerequisite, resulting in the non-existence of the credit. Pending the United Sections ruling (see ruling no. 3784/2023, no. 3443-3444 and no. 3445 of 2022) on this matter, reference is made to the recent ruling no. 1288 of 2023 of the Second Instance Tax Court of Lombardy, which considers that, while it is correct that the instructions for completing the declaration envisage that the credit must be indicated, under penalty of forfeiture, it is equally correct that this provision is not supported by the legislation. In other words, according to the Second Instance Tax Court of Lombardy, only credits that are non-existent from the outset, or which are recognized as being due to a party other than the one using them, are non-existent. For this reason, the Court concludes that failure to complete the RU section should be considered a formal error.

     

    It is clear that the correct distinction between non-existent and unallowable credits, with the consequent effects, is one of the most “hot button” tax issues, to the point that even the tax delegation promises to provide clarification. We therefore expect that all doubts will soon be clarified.

     

     

    g.sforzini@macchi-gangemi.com

     

     

    DISCLAIMER: This newsletter merely provides general information and does not constitute legal advice of any kind from Macchi di Cellere Gangemi. The newsletter does not replace individual legal consultation. Macchi di Cellere Gangemi assumes no liability whatsoever for the content and correctness of the newsletter.

     

     

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