New Anti-Counterfeiting Options In Albania

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Article by Irma Cami, PETOŠEVIĆ Albania, published in IP Law 360 on October 03, 2012

Fighting counterfeiting of industrial property rights is one of the biggest challenges in Albania. Until recently, there were only a few options available to enforce industrial property rights. Industrial property holders could choose between Customs or a civil proceeding. Both options showed little success, which resulted in Albania consistently being ranked as a country with a low success rate in fighting counterfeiting. While other countries in the region had additional enforcement tools, such as fighting counterfeiting through a criminal proceeding and/or Internal Market Inspectorate, Albania showed no signs of change.

It wasn’t until recently that significant changes took place. Namely, with the help
of the European Union, the Albanian government prepared the Albanian IPR
Strategy for 2010-2015. The document addresses the need to provide more legal
options in the fight against counterfeits and the need to strengthen the personnel
capacity of the relevant authorities: the police and the Prosecution Office.

In light of its commitment described in the IPR Strategy, Albania recently
undertook two significant legislative reforms. It changed the Criminal Code to
proclaim the violation of industrial property rights a criminal offense. This change
is in full compliance with Art. 61 of the Agreement on Trade-Related Aspects of
Intellectual Property Rights. It also established an Internal Market Inspectorate.
This change is in line with the acquis communautaire.

Both are regarded as a step forward in Albania’s attempts in tackling counterfeit
issues, and are expected to show improvement in Albania’s performance.
Below I look closely at the new legal remedies available in Albania for intellectual
property holders.

Criminal Proceedings Available as of April 11, 2012

In Albania, copyright does not belong to the family of industrial property rights. Its
infringement has been considered a criminal offense in Albania since 2004. On
the other hand, the counterfeiting of goods protected by trademark, patent rights,
utility models, industrial design or geographical indication, which all fall under
industrial property, has not been considered a criminal offense until recently,
when the changes in the Albanian Criminal Code made this option available.

Namely, the Law No. 23/2012 of March 1, 2012, titled “For some additions and
changes in the Criminal Code,” which entered into force on April 11, 2012,
outlines, among other things, a new provision that makes counterfeiting a
criminal offense. The provision covers all areas of industrial property — patents,
industrial designs, trademarks and geographical indications. It states that
manufacturing and distributing a product protected by an IP right, including
importing, exporting, releasing the good on the market, supplying the good and
trading with it, is now considered a criminal offense. The punishment for breaking
the law varies from having to pay a fine to one year in prison. If the act is done in
collaboration or more than once, a fine is also imposed or a penalty of up to two
years in prison.

The provision does not leave room for misinterpretation. However, the
prosecution itself of such violations is an issue that requires further legislative
reforms. The issue that needs to be considered is whether the Prosecution Office
will prosecute such violations initially or ex-officio, or should they be prosecuted
directly by the relevant court.

I am pointing this out because the new provision is considered an integral part of
Article 149 of the Procedural Criminal Code, according to which all violations
should be brought directly to the court, without being investigated preliminary by
the Prosecution Office.

The efficiency of penal investigations could be significantly increased if the
Prosecution Office pursues such criminal offenses ex-officio, or at least conducts
investigations initially, in order to gather the right evidence.

The Albanian IPR Strategy puts emphasis on this issue, foreseeing relevant
changes in the Procedural Criminal Code where the process would become exofficio. To the best of our knowledge, no initiative was taken with respect to this
issue. However, an initiative is expected in the near future, as the changes in the
Criminal Code have already entered into force.

Despite this discrepancy in the procedure, the criminal proceeding is a strong
legal tool available to IP rights holders in the fight against counterfeits. Such
provision is expected to have a positive impact on the economy in Albania. For
example, due to now harsher penalties, business owners are expected to be less
likely to sell fake products.

As mentioned above, these changes are in full compliance with Art.61 of the
TRIPS Agreement, which Albania joined in 2000. Moreover, they go beyond
Art.61 of the TRIPS Agreement as they provide protection not only for trademark
holders, as the minimum standards endorsed by the TRIPS Agreement provide,
but also for all other areas of industrial property rights.

Trade Secrets Better Protected Now

The changes to the Criminal Code include trade secrets as well.

Willful disclosure of trade secrets or privileged information by a person that has
access to the same, and misappropriation of trade secrets by third parties is now
considered a criminal offense in Albania.

Namely, Article 20 of the Law No. 23/2012 of March 1, 2012, “For some additions
and changes in the Criminal Code,” which corresponds to Article 143/a/2 of the
Criminal Code, provides imprisonment from six months to three years in cases
where a person discloses trade secrets or privileged information to third parties
or misappropriates them for personal interests.

Also, Article 39 of the said law, which corresponds to Article 295/b of the Criminal
Code, titled “Misappropriation of trade secrets or privileged information,” provides
a penalty for trading or offering goods/services by misappropriating a trade secret
or privileged information, which varies from a fine to four years in prison.

Two new provisions in the Criminal Code of Albania provide respectively six
months to three years imprisonment for disclosing trade secret information to
third parties or misappropriating it for their personal interests (Article 20 of the
Law No. 23/2012 of March 1, 2012), while misappropriation of a trade secret or
privileged information foresees punishment that varies from fines to four years
imprisonment (Article 39 of the Law No.23/2012 of March 1, 2012).

Both provisions, as all changes in the Criminal Code, entered into force on April
11, 2012.

These changes, along with the provisions of the Labor Code and the Law on
Companies, which define a trade secret or privileged information according to
Art.39 of the TRIPS Agreement, guarantee better protection for trade secrets and
privileged business information.

Additional Tools Available Through Filing an Application With the Internal Market Inspectorate

The two new laws in Albania — Law No. 10480 of Nov. 17, 2011, “On General
Non-Food Product Safety” and Law No.10489 of Dec. 15, 2011, “On Trading and
Surveillance of the Market concerning non-food products” — which entered into
force respectively on Dec. 26, 2011, and Jan. 11, 2012, have created the Internal
Market Inspectorate.

These laws have transposed the Directive 2001/95/EC of the European
Parliament and of the Council, the Regulation (EC) No 765/2008 of the European
Parliament and of the Council, and the Decision No 768/2008/EC of the
European Parliament and of the Council.

The main responsibility of the Internal Market Inspectorate is to ensure the safety
of nonfood consumer products by investigating the internal market. Its
establishment is a significant step forward in the enforcement of IP rights, as the
right holders can now combat counterfeits distributed on the internal market by
filing an application with the Inspectorate.

It should be pointed out that the procedure used by the Market Inspectorate to
tackle counterfeit goods needs to be further evaluated and improved. For
example, it is not clear whether the Market Inspectorate has the authority to
destroy the goods or to merely seize the goods and notify the parties involved in
such proceeding. There appears to be a discrepancy between the procedures
established by the new above-mentioned laws and the procedures established in
the Law on Industrial Property. Namely, the new laws authorize the Internal
Market Inspectorate to issue fines and also to seize and destroy unsafe products.

The issue is that the unsafe product, within the meaning of the new laws, does
not necessarily mean that the product is counterfeit. Another issue is that the
provisions of the Law on Industrial Property expressly mention that the Market
Inspectorate only seizes the goods, and further action depends on the interested
parties. These issues are expected to be solved with regulations that will follow
the new laws. As of today, no clarification about the procedure is made.