By Laura Spagnoli and Elena Martini

With an order published on 5 March 2019 (docket number 1588/2015), the Supreme Court of Cassation, overturning the decision of Rome Court of Appeal, ruled on the validity of patents, recalling that the limits of protection of the invention must be construed taking into consideration the claims, the description and the drawings attached to the patent.

In the case at issue, Mr Cavalli (the plaintiff), the inventor of a machine used to separate an olive’s pit from the pomace, had entered into a licence agreement with COMIP S.r.l. to grant the exclusive right to build and sell the machinery itself, for which at the time of the agreement a patent application had been filed (which was later granted). Following a failure to pay part of the royalties, the inventor had sued COMIP before the Court of Frosinone in order to obtain an injunction to pay, which the company had unsuccessfully opposed. Subsequently, COMIP asked Rome’s Court of Appeal to ascertain, principally, the patent’s invalidity and the consequent termination of the licence agreement, or alternatively, that the machinery produced by the company did not coincide with the object of the patent, with the consequent reimbursement of the royalties paid until that moment.

The Court of Appeal overturned the decision of the first instance Judge, ruling in favour of the company: Mr Cavalli’s patent was considered to be partially null and not counterfeit in its valid part and, according to the Judges, its invalidity affected the company’s obligation to pay royalties and entitled it to ask for the reimbursement of the amounts unduly paid until that time.

Mr Cavalli filed an appeal before the Supreme Court, claiming first of all that the validity of the patent had not been duly assessed in light of the drawings attached to it. In acceptance of this ground of appeal, the Supreme Court found that the Court of Appeal had actually ascertained the partial invalidity of Cavalli’s patent without taking into consideration those drawings. The Supreme Court instead recalled that, when the claims are not sufficient to clearly define the scope of the patent, this must also be construed by means of its description and the drawings attached to it. According to the Supreme Court, this rule, which is now expressly included in Article 52 (2) of the IP Code, could be clearly deduced by way of interpretation also from the previous law (applicable to this case, ratione temporis) although the latter did not expressly provide for it.

Secondly, Mr Cavalli contested his obligation to reimburse the royalties previously paid by COMIP in performance of the contract. Even in this case, the Court granted Mr Cavalli’s ground of appeal, noting that the Court of Appeal had failed to apply Article 77 of the IP Code (recte, the corresponding provision applicable ratione temporis) which provides exemption from the obligation to fully return the royalties. According to this provision, in fact, the declaration of invalidity of a patent, although having retroactive effects, does not affect licence agreements entered into before the final judgment concerning the patent’s invalidity, insofar as such agreements have already been executed and without prejudice for the possibility to provide for a fair reimbursement of the amounts already paid. Furthermore, the Supreme Court found that the Court of Appeal not only had failed to justify the non-application of Article 77, but had not even considered that the licence agreement had been concluded between the parties before the patent was issued and covered only the construction of the machinery and not the patentability of the invention. In this context, the Court of Appeal had not even correctly interpreted the contract, in breach of the Civil Code’s provisions governing interpretation (Articles 1362 and 1366 of the Civil Code).

The Supreme Court therefore granted the appeal and annulled the decision of the second instance Judge, referring the dispute to Rome’s Court of Appeal in a different composition for the revision of the case in the light of the principles above.