Commercial Partnerships and Ownership of Resulting Inventions:A Decision of the Milan Court of Appeal

Commercial collaborations frequently give rise to new technical or creative outcomes. When this happens, disputes often emerge as to who owns the intellectual property rights in those results.
In litigation, the answer almost invariably depends on the content of the parties’ agreements — and, just as importantly, on what those agreements fail to regulate.

A recent judgment of the Milan IP Court of Appeal (Judgment no. 68/2026 of 14 January 2026), provides a clear illustration of this principle.

The Facts

An English pharmaceutical company had entered into a commercial relationship with an Italian company for the production of fenfluramine, an active pharmaceutical ingredient used in the treatment of epilepsy.
In the course of that relationship, the Italian company developed a new method for producing the substance and its isomers, a method which both parties recognised as potentially patentable.

Negotiations were subsequently opened to regulate the ownership and exploitation of the invention. When those negotiations failed, the Italian company independently filed a European patent application in its own name for the new production process.

The English company reacted by bringing a claim of entitlement before the Milan IP Court, seeking recognition of its ownership of the invention and thereby triggering the suspension of the patent grant procedure before the European Patent Office. The Italian company filed a counterclaim seeking a declaration of its exclusive ownership of the invention.

The parties advanced fundamentally opposing interpretations of their contractual arrangements.

According to the claimant, the agreements had as their very subject the development of a new production method. On that basis, it argued that the established principle should apply whereby, when inventive activity constitutes the object of a contractual performance, ownership of the resulting invention belongs to the principal.

The defendant, by contrast, maintained that the agreements concerned only the production and supply of fenfluramine. The development of an innovative production process, it argued, fell outside the scope of the contractual relationship and had been achieved autonomously. The subsequent negotiations on intellectual property rights, in its view, confirmed rather than contradicted this position.

The Milan Court rejected the claim and held that ownership of the invention belonged to the Italian company. It found that the claimant had failed to prove that the contractual arrangements included the commissioning of a new production process.

The Court of Appeal’s Decision

The English company appealed, arguing that the first-instance court had misinterpreted the parties’ contractual intent as evidenced by the NDA, the so-called “Work Programme” and the correspondence exchanged between the parties. In particular, it relied on textual references to the development of production methods and to the future assignment of intellectual property rights.

The respondent requested confirmation of the judgment and sought damages for abuse of process under Article 96 of the Italian Code of Civil Procedure, identifying the alleged damage in the suspension of the patent prosecution.

The Milan Court of Appeal dismissed the appeal in its entirety.

The Court confirmed that the inventive activity later embodied in the patent application was outside the scope of the parties’ contractual arrangements. As regards the references contained in the NDA to a future agreement for the development of a synthesis method and the assignment of IP rights, the Court made two points.

First, it held that the issue of any failure to transfer IP rights was irrelevant to the thema decidendum as framed at first instance, which concerned the original ownership of the invention, not the enforcement of an alleged transfer obligation. Second, it observed that the very reference to a future assignment excluded the existence of original ownership in favour of the appellant — particularly since no such assignment ever materialised.

The Court further found that the wording of the Work Programme and the contemporaneous correspondence supported the qualification of the relationship as one of production and supply, rather than commissioned inventive development. References to the development of processes or methods were, in themselves, compatible with the use or adaptation of known techniques and did not necessarily imply the creation of a novel process.

Only after the defendant had independently developed the invention did the parties attempt, unsuccessfully, to negotiate its assignment to the claimant.

Abuse of Process

The Court also addressed the issue of aggravated liability.

While it rejected the respondent’s claim for damages under Article 96(1) of the Code of Civil Procedure — as that claim had already been dismissed at first instance and not challenged by way of cross-appeal — the Court applied Article 96(3) ex officio.

It held that the appeal constituted an abuse of process, as it had been brought despite its clear lack of foundation, which could have been appreciated with ordinary diligence. On that basis, the Court ordered the appellant to pay a sum equal to three times the legal costs incurred by the respondent, in addition to ordinary costs, as well as a further payment to the court’s fines fund and the doubling of the unified court fee.

Concluding Remarks

This decision confirms principles of general relevance to commercial relationships, particularly in high-technology and R&D-intensive sectors.

First, it highlights the importance of clearly defining the nature and object of contractual performances. In contexts such as the one examined, parties should expressly clarify whether the engagement concerns merely the supply of a product or also the development of a production process or a new product.

Even more importantly, the case underscores the value of expressly regulating the ownership of intellectual property rights from the outset. Clearly allocating rights in inventions, know-how and other forms of foreground IP avoids the need for courts to reconstruct the overall purpose of the contractual relationship and significantly reduces litigation risk.