IP News – New Law on Trademarks Adopted

IP News – New Law on Trademarks Adopted

January 31, 2020

The Assembly of the Republic of Serbia adopted the Law on Trademarks, which will start to apply from 1 February 2020. The formal reason for adopting a new law is alignment with the EU acquis, notably the Directives 2004/48/EC and 2015/2436/EU. The law introduces several novelties in protection and exercising of the right to trademark, some of which will have substantial impact on the import of branded goods in the Republic of Serbia.

Parallel import is allowed again

In brief, parallel import means that any economic entity may import and put certain products on the market of the Republic of Serbia after the owner of the trademark or a person authorised by him (e.g. authorised distributor) have put such product on the market anywhere in the world.

Parallel import thus mostly affects the official distributors who have concluded the contracts with foreign trademark owners that awarded them the exclusive right to sell products in a specified territory.

The principle of international exhaustion of rights, which was recognised in our laws all the way until 2013, has thus been reintroduced in Serbia. In the same year, the law amendments introduced the principle of national exhaustion of rights, under which trademark holders had no right to prohibit the use of their marks with respect to goods bearing such mark that are placed on the market in the Republic of Serbia by the holder or other person authorised by the holder.

However, the new Law on Trademarks reintroduced the principle of international exhaustion of rights. In this manner, the holders of trademarks are no longer allowed to perform international control over the distribution of goods bearing the marks they hold, which affects both the authorised distributors and the trademark holders.

As a reason for introducing this principle, the legislator indicated that the principle of national exhaustion of rights “entitled the trademark holders i.e. exclusive distributors to absolute control over the sale of goods in the domestic market, which resulted in distorted the free market play and which is contrary to Article 4 of the Law on Trade stipulating that trade in the market shall be free and that restrictions to performance of free trade activities shall be prohibited”.

It remains to be seen whether the principle of international exhaustion of rights would sustain certain future amendments to the Law on Trademarks, and one should also keep in mind the EU practice, particularly regarding the application of “Community exhaustion” principle.

New rules and legal instruments in trademark protection

The legal framework of trademark protection is adjusted to new technological possibilities for trademark display; therefore, according to new definition, the mark protected by trademark may comprise of any two signs, notably words, including personal names, or drawings, letters, numbers, colours, three-dimensional figures, form of product or its packaging, combination of such marks or sounds.

Legal protection is also enabled for trademark holders regarding counterfeited goods in transit.

Trademark holder is entitled to prohibit other persons to carry out preparatory activities referring to the use of trademark in trade (e.g. use of packaging, stickers, labels, safety marks etc.) which contain the mark identical with or similar to the right holder’s trademark.

The new law introduced the system of complaint in the procedure of examination of trademark application, including preliminary examination of trademark application ex officio in terms of absolute and relative grounds for protection denial.

Alike some foreign legal provisions, this system introduces the institute of trademark registration in the official gazette of the Intellectual Property Office (“the Office”), as a new phase in the procedure, in order to enable authorised persons to file to the Office a written complaint during trademark registration procedure.

The law introduced a possibility of administrative procedure suspension upon complaint to the Office, at joint request of the parties, for the purpose of attempting to resolve the dispute amicably and for a period of maximum 24 months.

Also, there are special provisions on complaint against international trademark registration.

Another significant novelty is the abolishment of appeal as a legal instrument against the Office decisions, which implies that the latter can be subject to administrative disputes before Administrative court (unlike the previous law, according to which the Administrative Commission of the Government of RS decided upon appeals against first instance decisions of the Office).

Liability of persons whose services were used upon infringement of rights – intermediary is also expressly regulated, whereas such persons may be included in the appeal for infringement of rights.

The types of temporary measures that may be deliberated by the court are also prescribed, including measures against intermediaries i.e. persons whose services were used by the person who infringed the rights.

New legal provisions that are primarily aligned with the stated EU Directives also bring about additional legal certainty for right-holders, with the exception of implementation of the principle of international exhaustion of rights, which causes the re-introduction of parallel import to the detriment of right-holders and authorised distributors.

This article is to be considered as exclusively informative, with no intention to provide legal advice.
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