Following battles at three levels of the Italian court hierarchy, a dispute between two Italian telecoms has been finally resolved. The dispute, which began over 10 years ago, centred on the sale of products allegedly infringing the trade marks “TIM”, “TIM card” and “il Telefonino”, by TIM’s competitor Teleco Impianto di Orlandini & C. S.A.S. (‘Teleco’). Telecom Italia Mobile S.P.A, or ‘TIM’, is one of the largest telecoms in Italy.

Alleging both trade mark infringement and acts of unfair competition, TIM commenced interlocutory proceedings against Teleco in the District Court of Montepulciano. The defence offered by Teleco was that, although the relevant products had been sold without the express authorisation of TIM, they had been purchased for sale from authorised licensees. The judge was not convinced by this reasoning and ruled that Teleco refrain from both selling TIM products and using TIM trade marks without authorisation.

However in the subsequent proceedings on the merits, the Montepulciano District Court held that the acts of Teleco, as described in the writ of summons, were not unlawful. The court therefore annulled the provisional measures obtained by TIM in the interlocutory proceedings.

Proceedings then passed to the Court of Appeal of Florence. Here, a different stance was taken: in contrast with the opinion of the lower court, the Court of Appeal held that Teleco’s acts were unlawful, and amounted to infringement of TIM’s trade marks. Teleco was ordered to pay damages of Euro 25,000.

In its recent judgment of 11 January, the Italian Supreme Court did not disturb the findings of law made by the Court of Appeal. It confirmed that official dealers of TIM products were not authorized by TIM to subcontract with third parties such as Teleco. Teleco’s lack of knowledge in this respect was held to be of no significance: Italian law implies an intention to act in unlawful competition where a company sells its competitor’s products without express authorisation. Teleco did not discharge this rebuttable presumption.

Teleco’s new claim, that that it had not used the TIM trade mark but rather the generic trade mark ‘Telecom’, could not be sustained as the Appeal Court had held that the two trade marks were sufficiently similar, a finding which was not disputed by Teleco at the time.

In a further blow to Teleco, the quantity of damages awarded by the Court of Appeal was upheld.