Corporate Software Piracy and Directors’ Personal Liability: a Ruling by the Milan IP Court
With its ruling no. 6240/2025, the IP Court of Milan held the chairman of the board, of a company engaged in the use of unlicensed software, jointly responsible with the company for copyright infringement. This decision validates an already established trend in Italian IP courts.
The Case
The plaintiff, owner of a software application used in drawing, design and industrial production, learned through the “S.I.A.C.” portal of the Guardia di Finanza[1] of a criminal proceeding for copyright offences which involved one of its own products.
Specifically, following an anti-piracy raid carried out at the company’s premises in the Pavia area, the Guardia di Finanza had found and seized company computers containing several unlicensed software applications, including the plaintiff’s. The ensuing criminal proceedings had resulted in the confiscation of the seized assets and the issuing of a monetary fine.
The plaintiff had, therefore, jointly sued the company and its chairman at the time of the events for copyright infringement before the Milan IP Court, seeking an injunction and damages.
The Ruling
The Milan IP Court was satisfied that the criminal proceedings records, which were filed as evidence in the civil proceedings, and the continued failure by the defendants to show proof of a user license for the software in question was sufficient proof of the infringement of the plaintiff’s copyrights.
The Court found that the plaintiff had the right to be compensated for economic losses suffered as a result. The damages were determined in accordance with the “reasonable royalty” criterion, by multiplying the official price of the premium user license by the number of illegal copies found at the company’s premises and applying an interest charge calculated from the date of the unauthorised installation.
The judges also awarded non-economic damages on the grounds that the keeping of unauthorised copies of computer programs for entrepreneurial purposes (also) constitutes a criminal offence. Indeed, under Italian Copyright Law non-economic damages may be awarded when the relevant infringement also constitutes a crime. These were determined on an equitable basis as a percentage (5%) of the economic damages.
Finally, the Court held the Chairman of the Board at the time of the events jointly responsible for these copyright infringements pursuant to articles 2395 and 2476 of the Civil Code, providing that third parties directly damaged by fraudulent or negligent acts by companies’ directors may seek tort compensation from the latter.
In this regard, the Court found that the chairman had at a minimum failed to act in regard of the infringement and that, based on the office he held, the small size of the company and the fact that, according to the findings of the criminal investigation, using pirated software was a M. O. within the company, he could not be unaware of the same.
He was, therefore, ordered to pay damages and legal fees jointly with the Company.
Finally, the Court issued an order against the defendants to remove all unauthorised copies of the software in question from any device, subject to a daily pecuniary penalty for each day of delay in complying with the order.
Ultimately, this ruling highlights that the use of unlicensed software within a corporation constitutes a personal risk for its directors under Italian law, underlining the importance of implementing robust internal compliance policies.
[1] The Guardia di Finanza is the Italian Tax & Customs Police, tasked, among other things, with anti-counterfeiting and anti-piracy duties. The S.I.A.C., which stands for Information Anti-Counterfeit System, is a digital platform enabling LEOs and rightholders to share information and updates on IP rights, counterfeiting and enforcement activities.