Content developed with the assistance of AI tools and reviewed by the author.
A post-CJEU and post-AI-law guide for UK and Irish companies with digital assets, software agreements or IP enforcement matters connected to Italy
Your Italian distributor is still running your proprietary software under a licence that expired eighteen months ago. You know it. They know it. Your previous solicitor sent a cease-and-desist that went nowhere. A colleague mentions that Italian IP proceedings are slow and that an injunction, once obtained, just sits there doing its job indefinitely. That was true. It is no longer.
Before you instruct anyone, you need to understand what changed in the twelve months to October 2026. The picture is not uniformly harder for rights holders. In one important respect, it is meaningfully better. But there is a procedural cliff you can fall off if your previous adviser obtained an injunction in Italy and never followed it up with merits proceedings.
The four developments are: a landmark CJEU ruling on Italian IP injunctions; the decree-law that implemented it; Italy's AI Law and its new software copyright provisions; and a revised framework for who owns software created by employees. Each carries a direct cost or risk for a decision-maker outside Italy.
Under the old Italian regime, a claimant could obtain a preliminary injunction — a fast-track court order stopping the other side from infringing — and then simply never file the substantive merits case. The injunction stayed in place indefinitely. Italian courts called such orders inibitorie cautelari anticipatorie: anticipatory injunctions with the practical force of a final judgment, no follow-up required.
On 23 April 2026, the Court of Justice of the European Union ended that practice. In Case C-132/25, M.M. Ristorazione Srl v. Villa Ramazzini Srl, the CJEU held that Italy's rule allowing preliminary injunctions in IP matters to remain effective indefinitely when the claimant never starts merits proceedings violates Article 9(5) of Directive 2004/48/EC (the Enforcement Directive), at least where the defendant seeks discharge.
Even an injunction capable of producing effects equivalent to a final judgment remains a provisional measure and must carry the safeguards of the Enforcement Directive, including the defendant's right to seek revocation where the claimant fails to pursue the substantive proceedings. Article 132(4) of the Italian Industrial Property Code — Codice della Proprietà Industriale — was found incompatible with Article 9(5) of the Directive on exactly that ground.
Italy responded rapidly. The Italian legislature amended both Article 132(4) of the Industrial Property Code and Article 162-bis(4) of Law No. 633/1941 (Italy's Copyright Act) through Decree-Law No. 100/2026, in force from 12 June 2026. If the judge granting a preliminary measure does not specify a deadline for commencing the trial on the merits, that trial must now begin within twenty business days or thirty-one calendar days of the order — whichever period is longer — running from service of the order.
The transitional regime is the immediate practical concern for anyone with an existing Italian IP order. The decree's transitional provisions apply to preliminary injunctions granted before 12 June 2026. Respondents currently subject to such injunctions may now apply for revocation or a declaration of ineffectiveness under Article 669-novies of the Italian Code of Civil Procedure, provided the claimant never commenced merits proceedings. That application must be filed within 60 days from 12 June 2026, subject to any applicable suspension of procedural time limits.
If you are a right holder with an injunction already in place but no pending merits proceedings, you may be in a position where the respondent has already challenged it, or may still do so. If you are a respondent, the window to act is effectively closing or closed. Either way, your first call this week should be to Italian counsel, not next quarter.
Under the reformed regime, the right holder who obtains a preliminary IP injunction in Italy now has a hard deadline / a strict deadline to commence merits proceedings. The reform creates a narrow but potentially decisive procedural window that may determine whether longstanding injunctions survive or fall.
The practical consequence is a sharp change in litigation economics. An Italian IP injunction used to be relatively inexpensive to maintain: obtain the order, serve it, and let it run. Now it commits the right holder to a full merits case within 31 calendar days or the specified judicial deadline. First-instance proceedings in the specialist IP sections of the Italian business courts — the Sezioni Specializzate in materia di Impresa — typically last two to four years and cost between €30,000 and €120,000 in legal fees at first instance, depending on the value and complexity of the dispute. That commitment must be priced into any decision to seek interim relief.
Unlike in most common-law jurisdictions, there is no equivalent of the "cross-undertaking in damages" system under which the injunction applicant automatically compensates the respondent for losses suffered if the injunction is later discharged. Italian courts do have discretion to award damages for unjustified interim relief under Article 96 of the Italian Code of Civil Procedure, but this is neither automatic nor routinely granted. The new regime does not import the cross-undertaking mechanism; it imposes a different discipline — a mandatory timeline for substantive proceedings — which aligns Italy more closely with the logic of the Enforcement Directive while still leaving the damages calculus different from what a UK solicitor would expect.
Parallel to the injunction reform, Italy's approach to software copyright has shifted in a way that matters directly for any company licensing software to an Italian entity, or whose Italian subsidiary employs developers.
On 10 October 2025, Law No. 132/2025 entered into force, making Italy the first EU Member State to introduce a comprehensive national framework for artificial intelligence. Its copyright provisions amend Law No. 633/1941, Italy's longstanding Copyright Act. The key rule for software and digital products: the Italian legal system does not recognise a general "work made for hire" doctrine. The author remains the natural person, even in an employment relationship. For software and databases, however, unless otherwise agreed in writing, the employer holds the economic exploitation rights over works created by the employee in the performance of their duties, while the employee retains the right to be acknowledged as the author.
This matters immediately when a foreign company acquires an Italian software business or hires Italian developers. The economic rights in the code pass to the employer by operation of law. The moral rights — including the right to be named as author and to object to distortions of the work — remain with the individual developer and cannot be assigned. A licence or asset-purchase agreement that attempts to extinguish moral rights is void to that extent under Italian law, regardless of which law the parties choose to govern the contract.
Italy's AI Law, approved definitively by the Senate on 18 September 2025, also aligns Italian law with EU Regulation (EU) 2024/1689, the EU AI Act. The law makes clear that substantial human intellectual contribution is required for an AI-assisted work to receive copyright protection, and explicitly extends text-and-data mining exceptions to AI systems. Criminal sanctions for text-and-data mining violations are introduced, signalling a stricter enforcement environment for AI-driven content licensing.
For a SaaS company licensing into Italy, or a private equity fund acquiring an Italian software business, the practical upshot is this: any content or code generated partly by AI tools must carry a clear record of the human intellectual contribution, or the IP may be unprotectable. That due-diligence question is now standard.
First, injunctions. In England, an IP claimant who obtains an interim injunction and then delays the substantive proceedings can face an application by the respondent to set aside the order or strike out the claim. The cross-undertaking in damages provides the automatic compensatory backstop. Italy's new regime achieves a similar discipline through a mandatory merits deadline, not automatic damages exposure — a different procedural path to a roughly comparable outcome, but with different tactical consequences at each stage.
Second, software ownership. In England, the Copyright, Designs and Patents Act 1988 provides an employer with ownership of a work made by an employee "in the course of his employment." The rule is clean. In Italy, as described above, only the economic rights transfer to the employer; moral rights remain with the developer. The distinction has real consequences in M&A — particularly earn-outs tied to IP ownership and representations in a share purchase agreement.
Third, exhaustion. The application of the exhaustion doctrine to digital content remains highly debated in Italy. Copyright owners of e-books, digital films, and software typically retain significant control over acts of reproduction and distribution, since users hold strictly personal, non-transferable licences rather than ownership of copies. The UK Court of Appeal's 2026 ruling in JJH Enterprises Ltd (trading as ValueLicensing) v. Microsoft Corp and others EWCA Civ 872 — which permitted splitting and resale of volume software licences — reflects an English position that Italian courts would not necessarily follow. If your cross-border software supply arrangement assumes the UK exhaustion analysis, verify it under Italian law separately.
Lex posterior derogat legi priori — later law overrides earlier law — is a maxim of statutory interpretation, but in commercial practice it also describes the practical problem in software licensing disputes: the agreement signed three years ago may no longer reflect the legal baseline.
The most contested Italian software disputes currently involve three scenarios: (a) post-acquisition licence re-scoping, where the acquirer discovers that the target's enterprise software licences were seat-based and the seats have never been counted correctly; (b) AI-tool deployment, where an Italian company has used a foreign vendor's platform to train models on licensed data, raising text-and-data mining rights under the new Law No. 132/2025; and (c) volume-licence over-deployment by Italian subsidiaries of foreign groups, where the group licence was negotiated centrally and the Italian entity never received a formal sublicence covering its actual usage.
In all three scenarios, the Italian-law position on damages is fixed by Article 158 of Law No. 633/1941: damages may be calculated as the licence fee that would have been agreed if the parties had negotiated the licence. Italian courts use the so-called "royalty analogy," which typically produces a lower headline figure than the statutory damages available under US copyright law. The practical ceiling in settled Italian software disputes is rarely above €500,000 absent deliberate, large-scale infringement.
Where proceedings are pending in parallel before the Italian Patent and Trade Mark Office and the courts, the court has discretion to suspend proceedings. Significant timing differences arise: administrative proceedings typically take 12 to 24 months, whereas civil proceedings at first instance may take two to four years. That gap shapes the settlement economics: a respondent who can force a stay for an administrative review has leverage. A right holder who can show clear, documented infringement and obtain a preliminary measure under the new 31-day regime moves the negotiation entirely.
In our files, the most common mistake made by UK and Irish companies in Italian software licensing disputes is relying on a governing-law clause in favour of English law as a shield against Italian mandatory rules. It is not one. Italian copyright law is mandatory law within the meaning of Article 9 of the Rome I Regulation (EU) No. 593/2008. A provision in a software licence agreement that purports to override the Italian developer's moral rights, or that extends remedies beyond what Italian law permits, will be disapplied by an Italian court regardless of the parties' choice. Verify the Italian position before you sign, not after the dispute crystallises.
It may be at risk. Under the transitional provisions of Decree-Law No. 100/2026, the respondent had a 60-day window from 12 June 2026 to apply for revocation on the ground that no merits proceedings were ever commenced. Whether that window has expired depends on whether any applicable procedural suspension applies. Italian counsel needs to check the specific order and its service date immediately. If the window passed without a challenge, the injunction may survive; if a challenge was filed, the right holder must now commence merits proceedings or the order falls.
The employer holds the economic exploitation rights in software created by an employee in the performance of their duties, by operation of Italian law — no assignment clause is needed. But the employee retains inalienable moral rights, which cannot be contractually removed. Where AI tools contributed substantially to the code, you must also be able to demonstrate the human intellectual contribution; code generated entirely by AI without meaningful human creative input is not protected under Law No. 132/2025.
Assuming you have documentary evidence of the licence and the over-deployment, a preliminary injunction application before the specialist IP section of a major Italian court (Milan, Rome, Turin) can be decided in two to six weeks. If granted, you then have 31 calendar days (or the period the judge specifies) to file the merits claim. First-instance proceedings typically last two to four years. Legal costs at first instance range broadly between €30,000 and €120,000. Settlement talks often produce an outcome within six to twelve months of the injunction being served, once the respondent understands the 31-day clock is real.
HREFLANG BLOCK:
Editorial Team — Panato Law Firm Staff
