ITALY Law and Practice Contributed by: Maurizio Marullo, Giorgio Vagnoni, Claudia Marongiu and Pasquale Ambrosio Cepparulo, LAWP Studio Legale e Tributario
• royalty clauses, specifying the financial arrange - ments regarding payments for the use of the intel - lectual property; • exclusivity provisions, addressing whether the licensee holds exclusive rights to use the licensed IP rights; • territorial perimeter, specifying the area in which the licensee could use the IP rights; • sublicensing rights; and • duration clauses, outlining the term of the licence. Transfer of IP The transfer of IP to or from foreign entities must comply with applicable EU and national regulations, including those on export controls, data protection, foreign direct investments and golden power regula - tions (see 3.3 Sanctions, National Security and For- eign Investment Controls and 3.4 Competition Law and Antitrust ). Additionally, cross-border transfers may trigger tax implications, such as transfer pricing rules, which require transactions to be at arm’s length. 8.2 Licensing v Assignment of IP Rights In view of the JV’s objectives, the co-venturers should consider whether to assign or to license the use of the IP rights to the JV. The assignment to the JV of the IP rights that may be executed through capital contribution or sale implies that the JV finally acquires the full ownership of the IP and the right to use it without any limitation. Therefore, following the assignment, the assigning co-venturer relinquishes any control over the IP rights and no longer benefits from any future profits derived from the assigned IP. On the other hand, the IP rights licence allows the co- venturer to retain ownership and control over the IP rights and to detail the terms and conditions that gov - ern the other party’s use of those rights. Furthermore, the IP licence provides the licensor with the right to receive compensation in the form of royalties or other fees for the JV’s exploitation of the licensed IP. The licensor also has the ability to regain full owner - ship of these rights upon the termination of the JV agreement or in the event of a breach by the JV of the terms outlined in the licence agreement.
Thus, licensing the existing IP is often the most effec - tive solution, subject to any relevant tax implications (for instance, transfer pricing rules on royalties in the case of an international JV). 8.3 ESG Considerations in JVs The concept of ESG is important because it provides a framework for assessing the sustainability and ethi - cal impact of business, beyond economic profits. This approach has gained importance with the growing awareness that companies’ evaluation should also be based on their ESG impact. Given the growing regulatory landscape on this topic, the co-venturer may conduct in-depth due diligence before establishing a JV to identify potential risks and opportunities in the light of applicable laws and to develop a detailed ESG strategy. Governance struc - tures can also be adapted to support effective ESG implementation. By embedding ESG principles direct - ly into the JV agreement, co-venturers may formalise their commitment to sustainability and take a proac - tive approach to risk management. Main ESG Regulations Italy, as an EU member state, has adopted an exten - sive regulatory framework on ESG matters, based essentially on EU legislation. Legislative Decree No 125/2024 implemented into Italian legislation the Corporate Sustainability Report - ing Directive (CSRD), introduced by the EU, which strengthens the requirements for sustainability report - ing. This Regulation requires an increasing number of companies to adopt a specific sustainability report - ing, improving transparency and information on risks and corporate reliability. Specifically, starting from the financial year 2024, the CSRD Regulation requires larger companies to publish a sustainability report in accordance with the European Sustainability Report - ing Standards (ESRS). Moreover, the Corporate Sustainability Due Diligence Directive (CS3D), approved in December 2023 and to be implemented by member states by July 2026, broadens the sustainable governance obligations imposed on companies. It requires a review of internal policies, including those related to the supply chain,
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