Parallel Imports in Kosovo: Slight Improvement in Enforcement

While Kosovo faces many legal challenges regarding the infringement of intellectual property rights, parallel import – the importation and sale of branded goods without the trademark holder’s consent – has become a particularly complex issue to tackle. Even though there have been recent court decisions against parallel importers, rights holders still face difficulties when enforcing their rights when the goods in question are deemed to be genuine.

Kosovo applies the principle of national exhaustion. According to the Kosovo Law on Trademarks, trademark holders can oppose the importation of genuine goods bearing their trademarks by third parties without their consent. The law explicitly states that the use of trademarks without the rights holder’s authorization constitutes trademark infringement and that the trademark right is exhausted only when the good or service bearing the trademark is sold in Kosovo under the authorization of the trademark holder.

However, the Kosovo Law on Customs Measures for Protection of Intellectual Property Rights does not allow Customs to seize original goods imported to Kosovo without the trademark holder’s consent, which complicates enforcement. Additionally, local case law has been inconclusive.

A significant step forward was made recently when the Court of Appeals in Prishtina issued a ruling on November 7, 2018 confirming the right of the trademark holder to ban the unauthorized importation and sale of goods bearing his/her trademark, regardless of the goods’ authenticity. Namely, the defendant imported apparel items bearing the trademark of a well-known multinational fast fashion company. Kosovo customs officials detained the goods, suspecting they were counterfeits. The trademark holder confirmed that the goods were indeed counterfeits, and the first instance court ruled in favor of the plaintiff.

The defendant filed an appeal stating that the goods were purchased from an authorized dealer, but the Court of Appeals ruled in favor of the plaintiff, claiming that it is sufficient to ascertain that the importation and placing of the goods on the market occurred without the rights holder’s authorization.

Another noteworthy case in Kosovo involved a local importer who intended to import a significant number of bottles bearing a well-known whiskey brand without the trademark holder’s consent. The local importer removed the identification code from the bottles and the goods were seized by Kosovo Customs under the suspicion of being counterfeit, but were later released because it was determined they were genuine.

The plaintiff argued that such unauthorized use constituted trademark infringement and emphasized that exhaustion of rights did not occur in line with Articles 8 and 12 of the Kosovo Trademark Law. The whiskey producer further stated that the goods were imported without trademark owner’s consent, through channels different from their authorized representative’s, and that the product was damaged by the removal of the product code. Furthermore, the damaged product was placed on the market, creating confusion regarding the product’s origin and damaging its quality standards.

While the court of first instance ruled against the plaintiff, the Court of Appeals in Prishtina ruled that such unauthorized import constituted trademark infringement. The case ended up in the Supreme Court, which upheld the appellate court’s decision on December 9, 2015 confirming that trademark infringement indeed occurred and that parallel import is prohibited in Kosovo.

However, court practice has been inconsistent and needs significant improvements. There are still many gaps in legislation regarding parallel imports and exhaustion of rights which allow for various inconsistent interpretations. It remains to be seen how the situation will evolve in the coming years.

By: Đorđe Marković

For more information, please contact Đorđe Marković at our Serbia office.