The Companies of Historical Trademarks treasure chests of know-how

Ours is a country rich in Innovation.

This is a particular Innovation, reflecting the peculiarities of the national production fabric, which is characterized by a high density of SMEs and the scarce presence of Large Business Groups.
The Innovation that pervades and invigorates Companies all along the Boot, consequently, is not the one resulting from the planned activities of R&D departments, but the one that arises from the constant and patient sifting of daily work.

It is thus an incremental, layered Innovation, which does not aim at the creation of products or services with disruptive novelty, but consists of continuous improvements in the companies' proposition to the market, dictated by the need to nurture the company's competitive value or to respond to specific needs dictated by customers.

The ideal legal instrument for protecting the results of this Innovation is Know How, a legal institution that holds greater importance and centrality in our country than in other advanced economies.

Know How in our legal system is regulated by Article 98 of the Industrial Property Code, which identifies its object as “business information and technical-industrial experience, including commercial experience, subject to the legitimate control of the holder [...].”

Said information constitutes valuable Know How provided that:

• “are secret,” that is, they must not be “[...] as a whole or in the precise configuration and combination of their elements generally known or easily accessible to experts and practitioners.”
• “have economic value,” that is, they take on such value by virtue of being secret;
  are subject to protective measures that are “reasonably adequate to keep them secret.”

By translating these concepts into practical examples, they constitute Know How in the technical-legal sense, among other things:

• technical information related to processes or products: working drawings of plants, processing procedures, recipes, operating parameters of machinery, ways of implementing processes;
• non-technical information relating to data useful for carrying out business functions: customer lists, news concerning customers and the economic conditions applied to them, supplier lists and related contractual conditions including prices or quotations applied and related negotiations;
• administrative information: documentation on quality certifications, as well as on procedures pertaining to the internal administration of companies;
• software: source codes and concepts, ideas and procedures underlying the computer sequences on which programs are built, the results obtained in an automated way through artificial intelligence processes.

Know-How, after an inception substantially linked to the discipline of franchising and after having been particularly applied in the pathological phases of certain types of contracts, that is, in cases of breach of confidentiality obligations or misappropriation of industrial secrets, has for some years been used on a large scale thanks to the Patent Box.

The Patent Box, in its original version, represented an important incentive and support for Innovation: the measure, introduced in 2015, rewarded companies that presented significant margins, realized thanks to, the use of IPRs, among which was precisely Know How. In essence, the fruit of daily work, the ability to constantly innovate, even learning from mistakes and with the adaptation to their own sector of technologies learned in other contexts, were rewarded by the legislature with a tax advantage that allowed these same companies, often small and medium-sized enterprises, to compete more effectively in international markets.

The reform of the Patent Box in general and in particular the exclusion of Know How from its scope constituted errors of an extreme gravity, indications of a really poor understanding of the Italian productive reality.

Know How, in fact, in light of the peculiar type of Innovation, incremental and stratified, that characterizes the Enterprises of our country, represents throughout the country by far the most widespread and crucial intangible asset of Companies' cognitive heritage.
The relationship linking the world of Historical Trademarks to the tool of Know How is particularly stringent and interesting, undoubtedly deserving of specific insights and ad hoc regulatory interventions.

Companies bearing a Historical Trademark, which in the course of their lives have seen the succession and stratification of activities, initiatives, projects and experiences, cannot but be, by their very nature, repositories of a vast store of knowledge in the form of Know How.

If we are to use the image of Know How as the most valuable treasure in the business fabric of this country, then it becomes consequent to assume that the Companies of Historical Trademarks represent the richest treasure chests of it.

ALBERTO IMPRODA
CEO Improda Law Firm

FRANCESCO RIZZO
Improda Law Firm