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.