“Fenicia”Decision of the Supreme Court of Cassation of Italy, Civil Division Section I (Corte Suprema di Cassazione, Sez. Civile I) 13 September 2021 – Case No. 24635/2021

With the “lump-sum-method”, damages for loss of profits may be determined with reference to a “fair mutually agreed price” (i.e. a sum not less than the reasonable royalty rate or fee that the infringer would have had to pay for a hypothetical licence granted to it by the right holder).The “reasonable royalty” criterion of Art. 125(2) Industrial Property Code (IPC) is a purely virtual consideration, which constitutes ex lege a mandatory minimum.The “reasonable royalty” criterion for quantifying damages concerns only loss of profits and not any other indemnifiable elements of the damage.The damage from a [in this case: trademark] infringement cannot be considered in re ipsa and therefore does not exempt the injured party from the burden of proof.Although the rule laid down in Art. 125(2) IPC may constitute a method for quantifying damages ex aequo et bono, by means of the criterion of the “fair mutually agreed price”, intended to ease the burden of proof of the plaintiff, no such quantification can be made on the basis of an abstract assumption of through the automatic application of that criterion.Even this method of quantification requires the application of Arts. 1223 et seq. Civil Code and cannot therefore dispense with proving an adequate causal link between the unlawful act and the damage suffered and reported.Damage for which compensation is payable is similar to, but does not overlap with, “competitive harm” from the point of view of unfair competition, since for the purposes of the latter, the abstract potential to cause harm is sufficient, whereas for the purposes of compensation due to a [in this case: trademark] infringement, the market factors must actually be altered.