News Supreme Court rulings March 2021

1. Nullity of the “claims made” clause: no to replacement by the discipline under Article 1917 Civil Code.

For the Supreme Court, The court that finds that the “claims made” clause (“on demand made”) is invalid cannot transform it into the traditional “loss occurence” clause (“on the occurrence of the loss”), as the contract cannot be traced back to the realization of the bargaining scheme set forth in Art. 1917 Civil Code, which the parties had wanted, instead, to expressly amend and modify.

This was stated by the Third Civil Section of the Supreme Court in a recent order (No. 5259/2021) on the subject of medical liability insurance coverage. The judge, therefore, cannot replace the “claims made” clause – null because it is too unbalanced in favor of the insurance company – with what is generally provided for in the Civil Code, but must proceed to integrate the contract following the mechanism provided for in Article 1419 of the Civil Code, bringing it back into balance “according to what the contracting parties had actually wanted,” identifying among the different models of “claims made” clauses found in the system the one “deemed most compatible with the realization of a balanced arrangement of the interests of the contracting parties.”

2. Counterfeit patent damages: clarification of settlement criteria

The Supreme Court, in Order no. 5666 of March 2, 2021, intervened on the issue of the criteria to be used for the purpose of equitable liquidated damages in the case of infringement of an industrial property right.

The Supreme Court clarified that since under Art. art. 125 c.p.i., the court may liquidate the damage in an “overall sum established on the basis of the acts of the case and the presumptions arising therefrom,” and, consequently, on the basis of even only circumstantial elements offered by the injured party, if the owner has failed to prove the loss of profit, “the lost profit may be liquidated by recourse to the alternative method of the just royalty or ‘virtual royalty,’ without the burden on the owner of the patent right to demonstrate what the certain royalty claimed would have been in the event of a hypothetical demand for a license by the infringer.”

The “just royalty” criterion, therefore, does not represent the amount of damage actually suffered, but only a so-called ‘mandatory minimum’ and cannot be used in the face of the injured party’s indication of additional and different reasonable equitable criteria on which to base the quantification of compensation.

3. Debts and estate fund: new reversal by the Supreme Court

The Supreme Court has recently returned to the debated issue of the relationship between debts arising from professional or business activity and an estate fund, partially changing course from some previous rulings and excluding the automatic eligibility of debts incurred as part of a spouse’s work activity among those intended to meet family needs.

By Ordinance no. 2904/2021, the Third Civil Section pointed out that such obligations are usually found to have a direct and immediate inherence with the needs of the business or professional activity and “only indirectly and mediately” can fulfill (also) the satisfaction of family needs.

The purpose of providing for the needs of the family cannot, therefore, be said to exist merely because the debt arose in the operation of the business, but this connection will have to be ascertained on a case-by-case basis, taking into account the specific circumstances of the particular case.