Tender Shoots: Enforcement of Trademark Rights in The Emerging Market of Bosnia and Herzegovina

Jun 16 2006 - 21:19

By Nina Kisić, SD PETOSEVIC Sarajevo with Kathryn Szymczyk, SD PETOSEVIC, Balkan Regional Office

Bosnia and Herzegovina (BH) is located in the middle of the Balkan Peninsula, bordering Croatia on the west, and Serbia and Montenegro on the east. The population is estimated to be about 3,922,000 (excluding nearly 300,000
refugees in adjacent countries and Western Europe). The monetary unit in Bosnia and Herzegovina is the Bosnian (or “Convertible”) mark (1 BAM = 1, 95 E). Bosnia and Herzegovina consists of two entities, the Federation of Bosnia and
Herzegovina and The Republic of Srpska. This means that, for example, there are two Customs Authorities and two different court systems (but with one Supreme Court). As Bosnia and Herzegovina is a new state, still recovering from war, and its legal system is still somewhat underdeveloped. Bosnia and
Herzegovina started applying Additional Value Tax in January 2006, which is an important step towards normalizing and securing market relations.

Although laws for most areas exist, it sometimes takes some time for the provisions to be actually applied. Courts are over burdened and some structures are not yet in place. However, although it may look, at first glance, that the judicial system is not working, the truth is that justice may be delayed, but rarely denied. Legislation governing the flow of goods through state borders was reformed recently, and is one of the best functioning systems in the region. Likewise, BH has a modern and functioning Industrial Property Law that includes provisions on Trademark Law. Slowly, but surely, the importance of protecting
and enforcing trademark rights is being recognized and the options for IP owners are becoming broader and more reliable.

General information on trademark rights

Trademark law provisions are included in the Industrial Property Law of 2002 (the Law). Specific Trademark provisions can be found in articles 136-151 of the Law (which also deals with Patents, Industrial Design, and other IP Rights). The procedure for registering a Trademark in BH starts with submitting an
application with the BH Patent and Trademark Office, which is officially called The Institute for Patents, Standards and Measurements, (PTO). Any physical or legal person has the right to file a trademark application. However, a local representative must represent foreign persons.

If an application is accepted, the PTO will invite an applicant to pay the official fees and costs for trademark maintenance for the first ten years, as well as costs for publishing of the trademark registration in the Institute’s Official gazette.

Enforcing trademark rights

Civil proceedings

There are several possibilities for protection of trademark rights in BH. The most common option is through an infringement action in the civil courts. If this is the chosen way, it is customary to first try to negotiate with the opposite side, and to come to an agreement that is acceptable to both parties. Such an agreement usually contains an undertaking to pay certain damages to the bearer of rights, an obligation on the part of the infringer to cease the infringing action, and a requirement that the facts of the case be published in a daily
newspaper. If settlement is not possible, a complaint is filed with the civil court. Proceedings before the civil courts tend to take some time, and, as a consequence, may be quite expensive. However, such civil actions are often successful and goal effective, where the goal is to stop the single act of infringement. However, some other procedures may be considered as a support
for a more global enforcement strategy.

Criminal proceedings

One of the other possible ways to protect trademark rights is a criminal action. Criminal complaints based on trademark infringement are provided for in
the law, but are not used as much as actions in civil court. Criminal proceedings begin with the filing of a criminal charge against an infringer by a state attorney. This action is usually based on a criminal complaint made by an injured party.

The penalties associated with Criminal Proceedings against
infringer’s are quite financially significant and the psychological effects of criminal actions can be quite dissuasive to infringers. However, such proceedings can be quite long and drawn out.

Customs seizures

The possibility for customs seizure procedures is established in the
Law on Industrial Property (Article 147), which gives Customs the authority to take certain actions. If the owner of IP rights, shows that it is probable that its exclusive rights might be injured by allowing the importation of identified goods, customs can, in its own discretion, order:

  • that a bearer of rights or his representative be allowed to inspect
    the goods, and/or;
  • that the goods are seized, removed from trade and/or destroyed.

Where the bearer of rights takes action on the basis of an identification of the goods as counterfeit they must present Customs with a detailed description showing why they are sure that the goods are in fact counterfeit. They must also show appropriate evidence of their exclusive rights and proof of probable injury to them. Upon request by Customs, the bearer of the rights must provide a guarantee (post a bond) for possible damage caused by the proposed customs measures and the costs of warehousing and eventual destruction of the goods. It is incumbent upon Customs to notify an importer and the intended
recipient of the goods about its decision, without delay. Where the rights bearer does not provide the necessary documents and proof of legal measures within seven days, Customs may release the goods and continue with the importation process. The Law provides that more detailed regulations regarding customs shall be established by special decree, however no such decree has yet
been issued.

Under the law, IP rights holders may also submit a __Customs Watch Application __ for the long-term surveillance of goods passing through BH customs. A locally qualified attorney who is in possession of a power of attorney authorising him/her to act on behalf of the right holder must file the Customs Watch Application. The application must contain proof of IP rights as well as the name and address of the right holder’s authorised distributor in BH. As explained above, the right holder must post a guarantee to cover any costs associated with individual seizures, upon request by Customs Authorities.

Until very recently, there were no applications filed for Customs Watch, despite the existence in the law for the possibility of such proceedings. Therefore, there is very little practice in the area of Customs Procedure. The procedures and
requirements that must be followed in such proceedings will become apparent in the next few months as Customs Authorities begin to act pursuant to at least one new Customs Watch Notice filed recently in BH.

The hesitation to file Customs Watch Applications in BH may, in part, be due to the onerous obligation of posting a guarantee for the costs of possible damages and the costs of warehousing and eventual destruction. However, it should be kept in mind that where a complaint is successful, which is of great probability in most cases, these costs are to be reimbursed by the guilty party.

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