Well, the court threw out the case against the priest:

An Italian atheist lost his legal crusade against the Catholic Church on Thursday when a judge rejected his attempts to sue a priest for saying that Jesus existed 2,000 years ago, the priest’s lawyer said.
Luigi Cascioli, 72, had argued his hometown priest and former schoolmate had effectively broken an Italian law meant to protect the public from being conned.
But instead of granting Cascioli his request to bring the case to court, the judge recommended magistrates investigate him for slandering priest Enrico Righi, Righi’s lawyer, Bruno Severo said.

The atheist plans to appeal all the way to the Hague. Read more about it here.