The Impact Of EU Enlargement On Trademark Practice In Croatia

Interview by Intellectual Property Watch with Tanja Rajic

Ten years after applying for membership, Croatia is finally joining the European Union (EU) on 1 July 2013. This included a careful process of harmonising Croatia’s legislation with EU regulations. In an exchange with Intellectual Property Watch, Ms. Tanja Rajić, senior associate at IP services firm PETOSEVIC, explains how six years of accession negotiations and the adoption of the acquis communautaire ¹ have affected intellectual property protection in Croatia and prepared it for becoming a member state.

Croatia’s IP Legislation on the Road to the EU

In 2006, the EU’s Screening Report on Intellectual Property in Croatia² revealed the major shortcomings in the prosecution and enforcement of IP rights in the country. This led to the adoption of significant amendments to all IP-related laws in 2007 and 2009,³ including the Trademark Act and the Industrial Design Act.

Intellectual Property Watch (IPW): What were the most significant changes made to the Croatian Trademark Act during the process of EU harmonisation?

Ms. Tanja Rajić: The Trademark Act was heavily amended in 2007 when two major novelties were introduced to satisfy the harmonisation process: the inauguration of the Community Trademark and of the Board of Appeals . The provisions extended the effects of a community trademark and anticipated it as an earlier trademark, consequently regulating the conversion, seniority and prohibition of its use in Croatia. The amendments included enforcement provisions, such as the community trademark protection against infringement, and the establishment of the competent court. Consequently, the exhaustion of the right’s “territory” was enlarged to include not only the Republic of Croatia, but also the territory of any EU member states or the states belonging to the European Economic Area (EEA). These provisions were set to enter into force on the day of Croatia’s becomes an EU member, as the exact date of the accession was unforeseeable back in 2007.

Moreover, in 2007 the state launched the Board of Appeals, a body that would handle the right holders appeals. Prior to 2007, Croatia’s Intellectual Property Office decisions were final. No internal recourse within the SIPO was possible and appeals in the form of administrative lawsuits with the Administrative Court of the Republic of Croatia were the only possible legal remedy. Even though the administrative lawsuit remained the ultimate remedy, the inauguration of the Board of Appeals significantly reduced the need for administrative lawsuits.

IPW: How has the harmonisation process affected the Industrial Design Act?

Rajić: In a nutshell, the Industrial Design Act was amended in the same way as the Trademark Act in terms of the provisions regarding the Community Design and the extension of the exhaustion of rights to EU and EEA member states.

However, once the regulation on Community designs enters into force in Croatia, there will be one “new object of design protection.” Namely, the novelty to the existing scope of design protection relates to unregistered designs, which have so far been protected through the copyright law. The Industrial Design Act anticipates that a design protected by an industrial design is also eligible for copyright protection from the date on which the design was created or fixed in any form, if it meets the requirements of the copyright and related rights law. However, despite the fact that the protection of unregistered designs was introduced in the Industrial Design Act, it is assumed that copyright claims will still prevail in cases concerning infringement of unregistered designs.

The EU related provisions of the Industrial Design Act will come into force on the accession date – July 1, 2013.

IPW: How will Croatia’s accession to the EU affect local courts and other enforcement bodies?

Rajić: Currently there are four civil courts in Croatia specialising in the protection of intellectual property rights, which are the Commercial Courts in Zagreb, Rijeka, Osijek and Split. The court in the capital of Zagreb is the most active one, which is why it was appointed as the Community Trademark and Design court. The High Commercial Court is considered as the second instance court. Presently, these four courts cannot judge on the substance of the validity of a trademark, but with the CTM/CD Court, the judicial task will not be to judge on CTM/CD infringement only, but also on annulment (invalidation ex tunc) of both CTM and CD and revocation (invalidation ex nunc) of the CTM.

Procedurally, the CTM/CD Court will act in accordance with the Council Regulation (EC) No 207/2009 on the Community Trademark and the Council Regulation (EC) No 6/2002 on Community Designs, but also as per the national provisions on the civil and distraint procedure.

There will be no major changes for other enforcement bodies, but it is expected that customs watches will be filed more frequently (the customs authorities have been trained for the forthcoming EU accession) and that the Market Inspectorate will be more involved in actions against goods already on the Croatian market.

IPW: Will the accession also affect the prosecution procedure of the IP Office?

Rajić: In terms of trademark prosecution, the IP office will have to harmonise its currently very strict practice regarding the absolute grounds for trademarks with the OHIM prosecution practice. Once in the EU, the IPO’s practice should become closer to the OHIM practice and should be applied consistently, regardless of the national and/or CTMs applications. Otherwise, the direct consequence of the discrepancies in the IPO and OHIM practices may be the significant decrease of the national applications, which the IPO presumably will try to avoid.

IPW: What changes will there be for Croatian applicants and businesses that need intellectual property protection?

Rajić: The IP office and the Ministry of Economy have made efforts to prepare the Croatian economic players for the country’s accession. Namely, the IP office organised topical seminars and created a public informative centre, INCENTIV⁴, which provides professional assistance to all those who want to effectively protect, utilise or manage intellectual property under the new regulations and requirements.

Also, the Ministry of Economy has been continuously assessing the effects of Croatia’s EU membership and in 2009 it published a guide which projected that the number of valid trademarks will increase four times, i.e., up to 500,000, once Croatia becomes a member state. Estimates from February of this year project even greater numbers⁵.

However, even with comprehensive information about what to expect due to the accession, Croatian entities have irreparably failed to protect the geographical indications and appellations of origin. Luckily, there has been no such criticism with regards to trademarks and designs, so hopefully there were no similar omissions.