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Albania to Introduce Substantive Changes to Industrial Property Law

Jan 31 2017 - 12:26

In August 2016, the Albanian PTO announced the beginning of public discussions on the introduction of multiple changes to the Albanian Industrial Property Law, mostly related to enforcement procedures. According to the PTO, the main goal of these changes is to further harmonize Albanian law with the EU acquis and to create an equal level of enforcement to that existing in the EU. This is due to obligations deriving from Article 73 of the Albania-EU Association and Stabilization Agreement, in force as of April 2009. However, IP professionals in Albania do not agree with all of the proposed changes because they fear that certain changes may adversely affect Albanian court practice, which has recently been in line with that of the EU.

This article addresses the most significant changes and the most concerning issues, reflecting my viewpoint, and that of other Albanian IP professionals.

Functional and Structural Changes in the Albanian PTO

The proposed changes grant a larger role to the PTO in enforcement procedures. It would not only examine oppositions but also handle different kinds of enforcement claims, including cancellation, invalidation and non-use actions and claims based on well-known status.

The changes also affect the PTO’s structure. Currently there is only one body within the PTO for examining oppositions, the Appeal Board, whose decisions can be appealed before the court of first instance. The proposed changes establish two instances, the first being the Examination Division, and the second being the Appeal Board.

Although this change may increase the time needed to conclude certain procedures, Albanian IP professionals believe that it will, along with the PTO’s expanded role in enforcement procedures, have a positive impact on establishing a good IP tradition. They anticipate that the PTO’s greater involvement in examining diverse cases will raise its level of expertise and will put pressure on it to improve the quality of its decisions. Further, having two instances within the PTO will prompt more discussions on its decision-making process, making it more accountable for providing consistent decisions.

Additionally, under the draft amendments, claims will not be examined on their merits if the holder of the contested application or registration does not reply on time to the opposition or cancellation lodged against it. Currently, the PTO examines any opposition on its merits regardless of whether the opposed party replies.

The changes also clearly define who is entitled to file trademark oppositions. They now include holders of unregistered well-known trademarks and any person that contests a trademark applied for in bad faith. While the current law grants protection to well-known unregistered trademarks and allows any person to cancel a registered trademark applied for in bad faith, it does not specifically mention these claimants among those that have the right to file an opposition against a registered mark.

Introducing Observations by Third Parties

According to the proposed changes, any third party that objects to the registration of a trademark has the right to submit a written observation, only on absolute grounds, to the Examination Division. The observation should explain on which grounds the trademark should not be registered ex officio, without being required to disclose direct interests. Nevertheless, the third party will not become party to the proceedings before the PTO. The applicant may comment on the observation or present additional arguments within a month following the notification of the observation. It seems that this provision was taken from Regulation (EU) 2015/2424 (EU Trademark Regulation, Article 40).

The current law does not formally provide for a third party to file observations. While this is not an unknown practice, it has never been consistent. The proposed changes would bring an improvement in this area.

Unlike the functional and structural changes in the PTO and the introduction of observations by third parties, which have caused a positive reaction among IP professionals in Albania, there are other proposed changes on which the PTO and IP practitioners do not share the same opinion.

Establishing IP Experts – a Regression in Recent Court Practice

The Albanian PTO is establishing the “IP expert” figure and introducing criteria for becoming qualified as one. Although the proposed changes do not outline specific duties, IP experts are to be invited to court hearings to give their testimony on whether there has been an infringement. Their testimony cannot be challenged by the parties or the court and will be legally binding.

According to the proposed changes, IP experts will be given more authority than registered IP agents, even though they will not be able to work as agents or as attorneys at law. IP experts will be certified by the PTO, which will also have the right to revoke their certification. The PTO is justifying this change by claiming that the court is not capable of examining IP-related cases and that “qualified expertise” is needed in court proceedings.

This proposal is absolutely contrary to recent positive developments in court practice, as well as to the law itself. In the past five years, Albanian courts have relied on EU rulings and have shown willingness to implement the criteria established by these rulings in IP-related cases. This positive development culminated in the Motorex v. Motex case in 2015, in which the Albanian Supreme Court upheld lower court decisions pointing out the importance of the implementation of EU rulings. In all of these court proceedings, the court came to conclusions by examining the legal and factual background and the arguments brought forward by the parties, without being assisted by this kind of expert.

IP professionals in Albania believe that IP experts cannot guarantee an impartial opinion. First, having an absolute right to decide whether there is IP right infringement can lead to abuse of power. Second, how are they supposed to challenge the PTO’s decisions when it is the PTO that has the right to revoke their qualification? Finally, this will increase the cost of court proceedings, as this service is expected to cost over EUR 1,000 (USD 1,045 USD).

Diminishing Right to Appeal PTO Decisions – an Unfounded Provision

Under the proposed changes, all claims should first pass the administrative proceedings in the PTO and PTO decisions can later be challenged through the Administrative Court for reasons related to procedural misconduct and not so much to substantive law. The changes also state that if the Court finds the claim grounded, it should return it to the PTO for further examination, and cannot judge on its own. IP professionals believe that this may severely decrease the Court’s competence and the number of cases that end up in the Court, as IP rights holders will not be willing to go through numerous and unfair procedures.

However, IP professionals believe that there are enough solid arguments and reasons for this change not to take effect even if it is approved. It is impossible for a law that targets IP areas covered by Albanian Industrial Property Law to define the competence of the court, as this competence is defined by the relevant procedural codes. Further, according to the Albanian judicial administration system, besides estimating whether or not an administrative act is grounded, the court also solves the consequences of the administrative act by deciding whether or not to accept the claim for refusal or cancellation of an IP right. In case of conflict, the law that stipulates the court competence prevails over the IP law, according to the Albanian Constitution.

Equal Status for Used Marks and Unregistered Well-Known Marks

According to the proposed changes, the holder of a prior unregistered mark has the right to oppose or cancel a later conflicting trademark application or registration. However, the requirements that a certain mark should meet in order to acquire the status of a prior unregistered mark are not defined.

As Albania has always been a first-to-file jurisdiction, the only occasion when the current IP law recognizes unregistered marks is when they have a well-known status. Granting the same rights to used marks and unregistered well-known marks does not make much sense.

While Albanian IP professionals do not oppose this new principle, they are bringing the following important arguments to the PTO’s attention:

  • The provision should define the requirements that a mark should meet in order to acquire the status of a prior unregistered mark, keeping in mind that these requirements should differ from the ones for well-known marks;
  • Its implementation will require a lot of capacity building efforts – it will require a detailed examination of the use of a certain mark, a topic that the PTO has never explored.

The PTO has not indicated whether it has been considering the suggestions of Albanian IP professionals. The draft law forwarded to other bodies for further examination includes no further definition of a used mark.

Adding “Trade Origin” to Deceptive Marks Provision

There is a provision in the current Albanian IP law that speaks about deceptive marks stating “a mark shall not be registered if it consists of such elements which deceive the public about the nature, quality or geographical origin of the goods or services” [Article 142 (1) (e) of the law]. It coincides with Article 7/g of Regulation (EU) 2015/2424 (EU Trademark Regulation).

The Albanian PTO proposes adding “trade origin” to the provision. Albanian IP professionals have strongly opposed this, arguing that the term “trade origin” has to do with the producer or with the likelihood of association, and has nothing to do with the concept of a deceptive trademark.

However, it seems the Albanian PTO will not abandon this proposal and is arguing that that the term “trade origin” covers identical marks.

The draft law has been forwarded to the Albanian Parliament, but the discussion regarding the proposed changes is still ongoing.

The changes are expected to be approved by March 2017 and to enter into force within two weeks following their approval.

Article by Irma Cami, Associate and Attorney at Law at PETOŠEVIĆ Albania

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