A rocky road for IP rights
It was New Year’s Day, 2007, and thousands of Romanians were partying in the streets. They were celebrating because, along with Bulgaria, their country had finally joined the European Union (EU).
While the people took to the streets, businesses began wondering how the changes would affect them. On the face of it, they had little to worry about. Most of the intellectual property legislation was already harmonised and, following minor changes since, all IP legislation now falls into line with the EU’s. But five-and-a-half years on, there are still major challenges facing the Romanian IP system, challenges under the surface that IP owners must be wary about.
“Although the tools to fight infringement are in place, the procedures to make these tools effective are lacking, or they are not working properly,” says Dragosh Marginean of law firm Razta & Ratza in Bucharest.
Preliminary injunctions, for example, are just a “theoretical option”, he says. They can be granted—there is no mistake about that. But in reality, it can take three to four months to grant an injunction, and the courts “almost never” grant ex parte injunctions.
Although legislation provides that ex parte injunctions can be granted, courts are not obliged to issue them. Marginean says that judges are “very cautious” about being accused of favouring one party over another, and are unwilling to become embroiled in these disputes.
Even when they are granted, injunctions are “impossible” to enforce. He says that should a court demand that an infringer stop selling counterfeit products, there are no realistic deterrents to reoffending. The only sanction for not complying with the order is a civil fine of around €10 per day. “And this fine is not paid automatically,” he says.
It is a highly inefficient process. In civil law, trademark owners must retain the services of a judicial officer who notifies the infringer. Should the infringer fail to respond or comply with the order, the judicial officer must request another court order demanding that the infringer pay the fine. “As you will appreciate, this is not an effective way to stop any potential infringements,” says Marginean.
Trademark owners can turn to the criminal system, but this process has its own disadvantages. Once the complaint is filed, the case is outside the control of the trademark owner: all the investigations are done by the police and the prosecution office. “Invariably—or at least in the vast majority of cases—the criminal case is not pursued by the prosecutor. At most, the infringer gets a fine and the products are destroyed,” he says.
“Also, criminal complaints should be filed only in the case of counterfeited products that bear identical signs. In infringement cases where the sign used is only similar to the trademark, this approach is not recommended. Whether a similar sign infringes a trademark is a question for the civil courts,” he adds.
“EVEN WHEN THEY ARE GRANTED, INJUNCTIONS ARE ‘IMPOSSIBLE’ TO ENFORCE. SHOULD A COURT DEMAND THAT AN INFRINGER STOP SELLING COUNTERFEIT PRODUCTS, THERE ARE NO REALISTIC DETERRENTS TO REOFFENDING.”
The same difficulties apply when protecting and enforcing patents, but there are additional problems. For example, initiating a criminal case based on a patent infringement is very rare, says Marginean, because the police and prosecutor’s office are ill equipped to handle such cases. “It is not recommended to follow this route,” he says. “Also, injunctions can be harder to obtain in patent cases, since the infringement is usually not obvious or easy to prove during such proceedings where only some evidence is admissible—for example, a court-appointed expert report is not possible.”
At the same time, it is well worth noting that the judges handling IP cases including patent infringements do not have a technical background, he adds. “Therefore in most cases the decision of the court is based exclusively on the result of the court-appointed expert report.”
Because the nature of each case is very specific, Marginean says there are no “magic solutions” to fix the problems facing IP owners. But he says businesses should use all measures available in Romania’s IP system, and employ the help of public bodies such as the Consumer Protection Agency, the Environment Protection Agency and the Customs Department. “These state authorities could ameliorate the lack of efficacy of the more traditional measures,” he says.
Fighting against infringing products brought into Romania—the typical case IP owners face—can be supported by the Customs Department, which can be “extremely helpful”.
With the majority of products coming through the borders, customs officials have become experienced in the counterfeiting game and have been a “vital” component in brand owners’ strategies. “Right alongside customs are the border police, who complement their activities,” he adds.
While IP owners have problems enforcing their rights, there are other hurdles for them to jump over. The State Office for Inventions and Trademarks (OSIM), crippled by the financial crisis, is struggling to meet expectations. Marginean believes the downturn has affected Romania more than the average EU member state, and the state agencies have consequently suffered the most.
“Massive budget cuts have been the order of the day for the last couple of years, along with major salary cuts,” he says. “As a result, some employees have left to pursue other opportunities.”
“PROJECTS SUCH AS THE COOPERATION FUND AND THE CONVERGENCE PROGRAMME, WHICH PROMOTE USING BETTER DATABASES, SETTING UP ONLINE FILING SYSTEMS AND TRAINING STAFF, HAVE AIDED OSIM.”
The office is under-resourced and “overwhelmed” by the amount of work. And because the government’s bank balance has received such a huge blow, it forbids the office from hiring new employees. Adding to IP owners’ woes, Marginean says, there is no immediate answer to these problems. Under a number of initiatives, the Office for Harmonization in the Internal Market (OHIM) is helping OSIM. Projects such as the Cooperation Fund and the Convergence Programme, which promote using better databases, setting up online filing systems and training staff, have aided OSIM. But while Marginean says this cooperation is helping, “it cannot solve all the problems on its own”.
He admits, however, that it is not all doom and gloom. Since 2007, specialised IP sections have been established in the Romanian courts, mostly in Bucharest, where the judges are well prepared, according to Marginean. The quality of decision-making has increased, and although there is “a lot” of room for improvement overall, reliable judges have had a “positive impact” on the IP system.
Romania has new legislation to look forward to. On September 1, 2012, the new Civil Procedure Code will come into force, bringing with it changes to all IP legislation. These changes will mainly affect the Government Ordinance 100/2005 implementing the Enforcement Directive, but will be exclusively procedural and will not affect substantial rights.
Additionally, there are continuing discussions over modifying the Trademark Law, which came into force in May 2010. “A number of issues have already been observed that would justify a possible revision,” says Marginean. “However, we do not expect any modification to come into force in the next year or so.”
Looking further into the future, he says that improvements are possible in all areas of the Romanian IP system. “We are hoping the areas that will undergo the greatest level of improvement are the procedural rules meant to effectively enforce IP rights.” He adds that the organisation of the IP office must improve, but concedes this will have much to do with the state of the economy.
And after recent in-fighting in the country’s political sphere, Romanians will be hoping that its place within the EU is assured. While the path ahead is unclear and unknown, IP owners will hope that the ousting of President Traian Basescu does not destabilise Romania’s IP system.
