Rising Out of The Ashes: Protecting Your Trademark Portfolio in The Developing Economies of Serbia & Montenegro

By Kathryn Szymczyk, SD PETOSEVIC, Balkan Regional Office.

Serbia and Montenegro were the heart of the former Yugoslavia and arguably continue to be the centre of the region even today. Serbia and Montenegro are actually a loose federation of two regions, Serbia and Montenegro. Both have their own legislatures and, to some extent, different laws and institutions. For example, Montenegro has recently adopted its own “Law on the Enforcement of Intellectual Property Rights” (Official Gazette of Montenegro No. 45/2005) but continues to enforce the same laws as Serbia with respect to IP rights generally. To add to the complication of the region, Kosovo is also struggling to assert its independence by passing its own laws and trying to establish its own institutions. To properly enforce IP rights in the federation of Serbia and Montenegro, the situation in all three of these regions must be taken into consideration.

Serbia, after the wars and the economic set backs of the 1990s has worked hard in the last several years to bring its IP laws and institutions into line with international treaties, conventions and agreements. This has made it more and more possible to effectively enforce trademark rights in this jurisdiction. However, there are certain things to be kept in mind when devising a strategy for protecting your trademark portfolio in this region.

Trademark registration

The provisions of the Trademark Law of Serbia and Montenegro (Official Gazette No. 61/2004) (Trademark Law) are in keeping with the provisions of the trademark laws of most developed countries of the world. Serbia is a first to
register country and, as such, a trademark owner has few rights without a valid national registration. Any individual or legal entity can apply for a trademark registration in Serbia, however, the application must be filed by a representative that is qualified to practice law in the country or has been registered before the local Intellectual Property Office (IPO). All words,
signs, logos and indicia are proper subject matter of trademark applications with the usual exceptions provided for in most jurisdictions. In addition to registering the mark in its original language/form, it may be wise to also register a transliteration of the mark into Cyrillic (e.g. ORANGE and éêÄç⁄) to ensure the broadest ambit of protection. This can be done within the same application and will protect with respect to use of the mark
either in its original form or its Cyrillic form or use of both forms together. For those trademarks that have a semantic meaning, it also may be advisable to file for the Serbian translation of the mark in Latin script (e.g. ORANGE (fruit)
and POMORANDÎA).

It takes approximately 2 years from the date of application for a trademark to issue to registration. There are no Opposition Proceedings in Serbia per se, however, where a confusingly similar trademark application is discovered, one can file a letter with the IPO contesting the registration. There are no provisions under the Trademark Law that gives significance to such a letter, however, in practice it will most often be taken into consideration by the Examiner.

Enforcement measures

In terms of enforcement, there are a number of different ways to enforce your trademark rights in Serbia. A suit can be brought before the courts on the basis of a violation of the provisions of the Serbian Trademark Law. Such actions are brought before the Commercial Court. For some time there has been talk of creating a separate court that hears IP matters only. Such an idea has not yet
been officially adopted, although there is reason to believe that such a separate court will exist in the near future. In the meantime, there are some judges in some cities/regions in Serbia, who hear IP cases almost exclusively. This makes bringing actions in these jurisdictions somewhat more satisfying. Of course, where only one judge is responsible for hearing all actions, the results of cases become rather predictable which can be good or bad depending on what side you are on. Although practice is somewhat lacking in other jurisdictions, courts have, for the most part, shown a willingness to learn and
apply the tools provided for under various IP laws and the laws of civil procedure. Having said that, awards for injury to goodwill and loss of sales are difficult to obtain, can prolong the proceedings by several years and are very low.

It is also possible to bring a Criminal Action against an infringer under Article 233 of the New Criminal Code of Serbia, which came into force on 1 January 2006 (Official Gazette No. 85/2005). Bringing such an action can have a much stronger psychological affect against repeat offenders and should be seriously considered in such cases. Such actions can either be initiated by the State Prosecutor pursuant to the filing of a Customs Complaint by an aggrieved party or, if such a complaint is not accepted, the aggrieved party can bring their own criminal action against the defendant. We note that the State Prosecutors
Office is lacking in resources so that most evidence must be gathered independently. Furthermore, aggrieved parties can be represented at the proceedings by a Serbian attorney-at-law and it is highly recommended to do so to ensure that the proceedings take place in a timely and effective manner.

Customs seizures

In Serbia, one of the most popular and effective tools for stopping infringing goods arriving in the country is through the Customs Authorities. Under the new law on Customs Measures (Customs Law of Serbia (Official Gazette No. 73/2003) Regulations Governing Customs Actions with Respect to the Importation of Goods (Official Gazette No. 127/2003) Customs has been given authority to seize and destroy counterfeit goods in certain circumstances. Under the law, a trademark owner is invited to file a Customs Watch Application to
assist Customs Authorities with the surveillance of goods being imported into Serbia. A separate application must be filed for each trademark or family of related marks. The Customs authorities also appreciate receiving visual and verbal information regarding the way the trademark is used on associated wares. The customs application should also include the name and address of distributors authorised in this jurisdiction as well as the usual origin of goods. Based on the look and feel or the origin of the goods, Customs Officials will seize
goods they suspect to be counterfeit. The trademark owner has 15 days within which to file a preliminary injunction and a further 15 days to have the injunction issued. An infringement action will usually be filed at the same time as the preliminary injunction request, seeking destruction of goods, destruction costs, storage costs and legal costs. Given that the goods are seized and in the hands of authorities, such proceedings are fairly summary. Once a successful
decision is obtained, a request for destruction of goods, together with the court decision, is filed with Customs.

The first successful customs case was brought in Serbia in May 2005. Since then, thousands of cases have been successfully brought and the related destruction requests filed. Unfortunately, to date, no goods have actually been destroyed due to confusion over how to destroy goods in the most economical and environmentally friendly way. We anticipate that such issues will soon be resolved. In the meantime, there has been no reason to believe that goods kept in storage have not been safe and kept out of commercial circulation.

Customs can order the destruction of goods without a court decision where a trademark owner has identified the goods as counterfeit and the importer has signed a declaration admitting their violation and waiving their rights to the goods. Furthermore, there are some specific circumstances where Customs will destroy goods without receiving either a court decision or a signed declaration from the importer.

It is clear that Customs Authorities in this country are very interested in assisting trademark owners enforce their rights. They are sensitive to the commercial realities faced by trademark owners and are very open to receiving suggestions and assistance. The key to accessing their help is to filing a Customs Watch Application for all of your important trademarks in this jurisdiction.

A note on Kosovo

Pursuant to the United Nations Mission in Kosovo (UNMIK) Regulation 24/99 (amended by Regulation 59/2000), the law applicable in Kosovo consists of Regulations promulgated by the Special Representative of the UN Secretary General, the laws promulgated by the Kosovo Assembly and the law in force in
Kosovo on 22 March 1989.

The first attempts to provide protection against intellectual property abuses were enshrined in certain related UNMIK regulations such as UNMIK Reg. 3/2001 on Foreign Investment in Kosovo. Article 10 of this Regulation states that, [t]he authorities shall enforce trademark, copyright and patent laws, and
any applicable related international conventions. The most significant achievement was however, the inclusion of trademark infringement as a criminal act in the Kosovo Provisional Criminal Code. Article 241 of this Code which stipulates that …whoever uses another’s trade name or trademark, another’s goods trademark for services trademark or another’s trademark related to geographical origin or any other special trademark of goods or components thereof in his or her own trade name, trademark, or special trademark of goods shall be punished by imprisonment of up to two years.

The Kosovo Assembly has been working on drafting a Law on Trademarks and the first draft has been presented to experts who are expected to provide their comments and expertise. Because of other more important work in the agenda (such as the preparations for the talks on the status of Kosovo), the promulgation of this law has been delayed, although it is said that it is expected to be adopted very soon. Other relevant laws that were passed by the Kosovo Assembly are: The Law on Patents, The Law on Trade of Petroleum and Petroleum Products (which contains some provisions on deception regarding
products brand name or identity of petroleum or petroleum product producer), as well as The Law on Competition and The Law on Consumer Protection.
The Kosovo Commercial Court, which has jurisdiction over disputes involving IP infringement (see Article 30 of The Law on Regular Courts), has been applying the old Yugoslav Copyright Law (Official Gazette SFRY no.19, 14 April 1978) and is interpreting it in a broader way, to include also cases involving trademark and design disputes, where there are still gaps in the law. Currently, the main problem, however, is the enforcement of these rights. Apart from the Court, there is no other competent office, within the Ministry of Trade and industry, or otherwise, that would deal with these type of claims.

Conclusion

The region of Serbia and Montenegro, located in the centre of the Balkans with access to the Mediterranean, is a strategic area for the fight against the proliferation of counterfeits throughout Europe. It is a place where enforcement, especially through customs seizures, is efficient and effective and, as such, should not be overlooked when devising global enforcement strategies for
your trademark portfolio.