Despite being the least developed country in Europe, Kosovo offers a decent and competitive investment environment. To enable a smooth transition from the previous economic and legal system, the Kosovo Government has implemented a number of economic, legal and institutional reforms. As a result, the World Bank rated Kosovo as the most dynamic reformer among Central and Southeast European countries in its Doing Business Index 2013 report.
The Kosovo Investment Promotion Agency's statistics show that a number of industrial and business sectors, such as agriculture, wood processing, information technology and telecommunications, construction, mining and energy, and textile are very well developed. The Kosovo Central Bank Report showed foreign direct investment (FDI) increasing significantly during the first nine months of 2013, reaching a value of EUR 205.4 million, an increase of 15% compared with the same period in 2012. These investments were mostly in the real estate, energy, financial services, transport and telecommunication, construction, production, and minerals sectors, which make particularly intensive use of intellectual property rights (IPRs). This article aims to provide investors with a brief and practical explanation of the current state of IPR protection and enforcement in Kosovo.
The first set of IP laws was enacted only in 2004. But soon after ratification, it appeared that significant amendments were needed. In 2011, three new IP-related laws were adopted and entered into force. The Laws on Trademarks, Patents, and Industrial Designs were supposed to bring Kosovo IP legislation in line with AcquisCommunautaire.
The new IP legislation was also aimed at reducing burdensome IP-rights protection procedures, which could have raised serious concerns regarding the protection of potential and current FDI in Kosovo. As one example, an applicant of a patent application which had been published in the Official Bulletin had previously to make sure that a request for grant of the patent had been filed within six months from publication date. The 2011 Patent Law provides for the publication of granted patents only. Hence, the requirement of a request for grant of patent has been removed. Kosovo is not a member state of the Patent Cooperation Treaty (PCT) or the European Patent Convention (EPC). Therefore, the only certain way to obtain Kosovo patent protection at this time is to file a national patent application with the Kosovo IP Agency (the “Agency”) within the 12-month Paris Convention priority period. The regular PCT national phase or European Patents extension is not possible.
The 2011 Law on Trademarks also introduced important changes concerning trademark acquisition. Trademark rights are only acquired through registration with the IP Agency. Unregistered well-known trademarks could be claimed against the registration of confusingly similar trademarks. However, enforcement of unregistered well-known trademarks before competent courts is no longer possible. Because Kosovo is not a member of the World Intellectual Property Organization (WIPO), it is not possible to extend an International Registration trademark to Kosovo, and it is therefore strategically important that owners register their most important trademarks with the Agency.
Administration of IPR
Industrial property rights in Kosovo are acquired through registration with the competent authority. The registration procedure for administration of patents, trademarks, industrial designs, topographies of integrated circuits, and geographical indications is under the competence of the Agency. The number of applications has risen considerably since the Agency opened in November 2007. About 20,000 applications have been filed with the Agency so far. Because Kosovo has not ratified any of the international treaties or conventions, foreign right holders can protect their rights through the national route only.
Establishment of a Trademark Database and digitalization of data for thousands of applications increased the efficiency of the Agency. A registration certificate can now be obtained in less than two years. Moreover, an accelerated examination procedure can be approved for trademark owners whose rights are being infringed. The new IP legislation also introduced an Appellate Commission as the second instance administrative authority, empowered to review and rule on the Agency's decisions.
The Kosovo Customs and the Market Inspectorate are the institutions responsible for administrative enforcement of IPR. The Kosovo Customs will apply border measures as provided by the Law on Customs Measures, acting in cases of import, export, transit, customs warehouses, inward processing of products, customs supervision, and temporary importation placed in the free customs zone. Most infringing goods, particularly counterfeits, are imported. Thus, filing a Customs Watch Application with the Kosovo Customs is the recommended action. The Law on Customs provides a fast-track procedure for destruction of detained goods, making it worthwhile for the client to invest time and money into enforcement. On the other hand, the Market Inspectorate has, among other things, competences to inspect Kosovo commercial and production premises in order to ensure consumer protection, industrial property rights protection, and copyright protection.
IPR-related crimes are also punishable under the Criminal Code. The Department for Economic Crimes and Corruption within the Kosovo Police, the State Prosecutor's Office, and local courts with territorial jurisdiction are responsible for enforcing IPRs in cases concerning intellectual property infringement, including copyright violation. Only a few criminal IPR cases have been adjudicated since protection of IPRs entered the Criminal Code.
In cases of trademark, patent, or design infringement, an owner is also entitled to institute civil proceedings. Several remedies are available to holders. The holders may request that the court confirm the existence of the infringement and prohibit future infringement acts and they may further ask the court to order seizure and destruction of the infringing products. They may also claim damages, request publication of the ruling, or ask the court to order the infringer to identify third persons involved in the production or distribution of the infringing goods or services and channels of distribution.
Provisional measures of evidence preservation, property preservation, preliminary injunctions, and unwarranted ex parte injunctions are also possible. The Commercial Matters Department within the Basic Court of Pristina has competence to adjudicate industrial property infringement cases. A professional judge will hear these cases. Actions before the courts may take up to two years to be decided. The judicial system lacks expert judges. There is no specialized court or unit to handle IPR-related matters only. Only a small number of cases actually gets to the court, while the remaining infringement cases are settled through alternative dispute resolution mechanisms, mainly negotiations.
The adoption of the IPR Strategy 2010-2014 showed that the Kosovo Government understands that weak IP protection in IP-sensitive areas discourages FDI, and that low IPR protection leads foreign firms to focus on distribution rather than local manufacturing. Even though not bound by any treaty, Kosovo has established very good IP legislation. Institutional progress was also noted and acknowledged in several international reports. However, great challenges remain: enforcement of IPRs, the low level of public IPR awareness, building of technical and professional capacity for IPR administration and enforcement institutions (including specialized courts), accession of Kosovo to IP-related international institutions, and ratification of IP-related international conventions.
Contributed by Kujtesa Nezaj-Shehu, SDP KOSOVË
© 2014 CEE Legal Matters. The opinions expressed are those of the author.