With a population of more than 20 million divided into seven jurisdictions, the Western Balkans has the potential to be a fertile ground for the production and distribution of counterfeit goods. The region includes Croatia, which became the newest EU member on July 1 2013, as well as Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro and Serbia, which all hope to accede to the European Union, but have not yet done so. Local legislation in these countries is similar and is being continuously adjusted to conform to EU law. However, issues still arise in fighting counterfeit goods due to a lack of resources and inaction on the part of the authorities. Due to its geographical location, the area is well connected to other countries and continents. It sits at a junction of land and sea transportation routes, and is becoming a gateway to the EU market. Legal framework Albania The relevant laws in Albania are: • the Customs Code (8449/1999), in particular Article 82(4); and • the Council of Ministers Decision 547/2008 on the implementing provisions of the Customs Code.
Bosnia and Herzegovina The relevant laws in Bosnia and Herzegovina are: • the Decision on the Implementation of Customs Measures for the Protection of Patent Rights Holders (OG 41/2012); • the Decision on the Implementation of Customs Measures for the Protection of Trademark Rights Holders (OG 41/2012); • the Decision on the Implementation of Customs Measures for the Protection of Industrial Design Rights Holders (OG 41/2012); • the Decision on the Implementation of Customs Measures for the Protection of Rights Holders of Indications of Geographical Origin (OG 41/2012); and • the Decision on the Implementation of Customs Measures for the Protection of Copyright and Related Rights Holders (OG 41/2012). Croatia The relevant laws in Croatia are: • the Law on Customs Regulations of the European Union (OG 54/2013); • the EU Customs Regulation (608/2013), repealing EU Regulation 1383/2003; and • the European Commission Implementing Regulation 1352/2013, establishing the forms provided for in the EU Customs Regulation. Kosovo The relevant laws in Kosovo are: • the Act on Customs Measures for the Protection of Intellectual Property (GO 2009/03-L-170); and
the Administrative Guidance for the Application of the Act on Customs Measures for the Protection of Intellectual Property (GO 07/2010). Macedonia The relevant law in Macedonia is the Act on Customs Measures for the Protection of Intellectual Property Rights (GO 38/2005, 107/2007, 135/2011, 69/2013). Montenegro The relevant laws in Montenegro are: • the Customs Act (OG 7/02, 38/02, 72/02, 21/03, 31/03, 29/05, 66/06, 21/08); and • the Regulation on Actions of the Customs Authorities in relation to Goods Suspected of Infringing IP Rights (OG 33/2011). Serbia The relevant laws in Serbia are: • the Customs Act (GO 18/2010, 111/2012); • the Regulation on the Application of Measures for the Protection of Intellectual Property at Borders (GO 86/2010, 18/2012); and • the Act on Special Authorisations for the Protection of Intellectual Property (GO 46/2006, 104/2009). Other codes and acts also provide the broader legal framework for the protection of intellectual property in each country. These include the various trademark acts, patent acts, industrial design acts, copyright acts and criminal and civil procedure codes, as well as criminal and civil codes. Border measures Border measures in all seven countries are more or less identical in terms of formalities. The existence of registered rights is a prerequisite and power of attorney must be filed with an indemnity declaration. In most countries, the procedure stipulated is straightforward, giving rights holders the opportunity to prevent counterfeit goods from entering the market by applying a simplified procedure and (in the absence of objections from the infringer) permitting them to presume assent to the destruction of goods. Any type of registered right is acceptable (ie, national, EU and/or international), as long as it is valid in the relevant territory. However, special care should be taken in relation to Kosovo: as it is party to no international treaties, the designation of international registrations of IP rights is therefore not possible. Where (as is not uncommon) an application filed before the national IP office has not yet been processed, even if it was filed more than four years previously, only partial enforcement of IP rights and anti-counterfeiting actions is possible. Ex officio seizures are relatively common. In such cases, local customs authorities will supply the necessary information to rights holders that are unaware of the existence of infringing goods. Most customs authorities in the area are vigilant when sending out notifications of ex officio seizures. This is especially true in Croatia, Macedonia and Serbia. However, ex officio seizures provide a rather short deadline for undertaking all necessary steps. This means that the customs application usually needs to be set up within three to four business days of notification. Nevertheless, these seizures serve as a warning to rights holders that their goods, reputation and recognition on the market may be in jeopardy without them even being aware, and that proper border measures and strategies are therefore required. Setting up protective measures at the border is the most effective and efficient tool for preventing counterfeit goods entering any market. It has been proven over the years that other measures (ie, civil actions, market inspectorate procedures and/or police actions) are not remotely as efficient as border measures and are of limited effect in comparison. Nevertheless, the market inspectorate registration procedure is particularly efficient in Serbia and many rights holders use this tool in conjunction with border measures. Criminal prosecution Local police in the region regularly collect information relating to the infringement of IP rights and take various steps to curb such activity. This includes gathering the necessary information, documents and other evidence from individuals and corporations, as well as taking urgent investigative action (eg, searching premises or computers). In cases where there is a reasonable suspicion that a prosecutable criminal offence has occurred, police will normally file criminal charges with the State Attorney’s Office. The State Attorney’s Office will undertake the necessary actions to detect crimes and find the perpetrators, as well as receiving criminal charges, considering their content, collecting additional necessary information and rendering decisions (ie, indicting the perpetrators). Apart from pecuniary penalties, imprisonment for a term of between three and eight years may apply, depending on the jurisdiction. Courts are entitled to issue search warrants to obtain and preserve evidence until the final stage of a trial. They may also order the taking of samples and may temporarily seize goods until the verdict becomes final. Permanent seizure of counterfeit goods is possible if so ordered by verdict. Compensation is available to rights holders if sought, although in some countries in the region this must occur in separate civil proceedings. Criminal charges may be filed by legal or natural persons that have some knowledge of the offender and/or criminal offence, or by a person that has suffered as a result of the offence. Misdemeanour liability for the infringement of IP rights is prescribed by the particular laws governing the relevant areas of IP law. Civil enforcement Most civil enforcement cases are brought on the basis of trademark infringement and are resolved through a simplified procedure before the customs authorities. If an alleged infringer files an objection before the customs authorities, the rights holder must file a civil action to prevent the goods from being released. Interim injunctions and provisional measures are available and may be requested at the pretrial stage or when judgment is being passed. Where irreparable damage could occur, interim injunctions may be rendered ex parte. Such injunctions usually include: • an order to the opposing party to cease or desist from the infringing acts (the court may also issue such an order against an intermediary whose services are being used by a third party to infringe a trademark); and • an order for the seizure or removal from the market of the goods to which a trademark is unlawfully attached. In addition, the court may order the seizure of movable and immovable property belonging to the opposing party that is not directly related to the infringement, including a freeze on its bank accounts and other assets. In general, rights holders can make several claims against an infringer, although this may vary depending on the jurisdiction. Typical claims include requesting: • proof of infringement and its cessation; • seizure and destruction of the infringing goods; • payment of damages, usual compensation and unfair profits; • publication of the judgment; and • provision of information. Court proceedings in the Western Balkans are relatively inexpensive compared to the cost of IP infringement cases worldwide, but can be lengthy (from one to seven years, depending on the jurisdiction). Lengthy proceedings and the enforcement of final decisions are some of the major issues yet to be resolved in the region.
Anti-counterfeiting online Several countries in the region have established special computer crime units within the police to facilitate the investigation of online counterfeit issues. The resources afforded to these units are still modest, but positive steps have been seen in cooperation between the private sector (eg, courier service providers, internet service providers (ISPs), law firms) and the public sector. For example, in Serbia, there is a special prosecutor for computer crime that, together with the special computer crime unit within the police, deals with the most severe cases of counterfeiting (eg, several thousand counterfeit medicines were withdrawn from the market in one such action). Also in Serbia, good practice is demonstrated by local e-commerce and bidding portals, which support takedown notices and remove suspicious offers by themselves if they suspect that the goods offered are counterfeit. In Croatia, special task units within the Ministry of Finance cooperate with the police to act on information provided against persons offering advertisements for counterfeit goods. When enforcing IP rights online, the general IP legislation applies. Unlike in Serbia, in most other jurisdictions in the Western Balkans, the efficiency of anti-counterfeiting measures against online activities cannot be relied on. The police are unable to stop the trade of counterfeit goods on the Internet. Online advertisements are placed under pseudonyms and ISPs are not liable for the content of these advertisements. The most frequently counterfeited goods include drugs and medical products, food, machinery and spare parts, electronic products, luxury products, clothing and fashion accessories, entertainment, software and toys. Preventive measures and strategies The key to setting up proper and effective preventive measures is to understand the territory and the people working in a particular environment. This primarily means that rights holders should be well informed of the particularities of the jurisdiction of interest, as well as the possible steps which should be taken and the various ways in which an issue may be resolved. This will ensure that rights holders properly protect their rights while keeping expectations in line with the local situation. A proper legal framework has been set up in all Western Balkan states, but enforcement still needs focus. For example, in Croatia, Serbia and Macedonia, a vast number of ex officio seizures of counterfeit goods are made, but rights holders are often not interested in enforcing their rights to the proper degree. A more zealous approach on the part of rights holders would reinforce the anti-counterfeiting efforts being made by the authorities. On the other hand, in some other countries in the region, a more proactive approach by government bodies is required so that counterfeiting can be combated properly. Rights holders are advised to consider the available measures across the region. Implementing a strategy that recognises the root of the problem and provides a long-term solution should be contemplated. The need for a swift response should be seen as an incentive rather than an obstacle to solving the problem of dealing with counterfeit goods. The proper approach is not to try to solve problems at a micro level (eg, focusing on only one shipment in Montenegro), but rather to implement a border strategy covering the wider region. The countries of the Western Balkans should be considered as a single region. In the end, cutting the problem off at the root is far more efficient than waiting for it to blossom. W