The long road to success
Claudia Hutina
Romania
Romania was one of the first countries in Europe to adopt a legislative framework for IP. Claudia Hutina of Drakopoulos Law Firm examines the country’s development towards a successful IP protection system
Romania's first IP law dates back to 1879 during the age of King Carol the First and was called the Law on factory marks and trade marks. This Law recognised the right to a trade mark of the trader or industrialist who had registered the trade mark with the commercial court. The same law guaranteed a right of exclusive priority for a term of 15 years to the trade mark holder, together with the possibility to extend the term after it lapsed. In order to protect the trade mark holder, this Law provided for punishment for the counterfeiting and imitation of trade marks and the marketing of counterfeit products. Punishment was criminal or civil, but the Law could also ban those traders who breached legal provisions from taking part in the elections for the chambers of commerce for a certain period of time, or could enforce the display of the decision in certain places established by the court.
This enthusiastic start was followed by a time of stagnation if not regression, specifically during the Communist regime during which, even though such laws were in force, they could not fulfil their economic and innovative purpose because creativity was not wanted at that time. Moreover, as everything was controlled and censored, and also given the economic climate at that time. IP was unable to blossom.
Recent amendments
In Romania, IP reclaimed its rightful place in the 90's, made possible through the entry into force of functional laws for sub-categories of IP. Therefore, several Laws were enacted, such as Law 64/1991 on patents, Law 129/1992 on the protection of designs and models, Law 16/1995 on the protection of topographies of semiconductor products, Law 8/1996 on copyright and related rights, Law 255/1998 on the protection of new species of plants, Law 84/1998 on trade marks and geographic indications, Law 350/2007 on utility models, as well as the regulations on such laws, including Law 11/1991 on unfair competition and Law 21/1996 on competition.
The following decade, in order to be able to face more current challenges, other laws also became necessary to offer prompt and practical tools to stop phenomena like counterfeiting and piracy and give Customs the authority to intervene. Recent years have brought significant changes through the amendment and supplementation of the IP laws mentioned above, and they are now very similar to those in the European Union. To this end, the following regulations were issued: Government Emergency Ordinance no 100/2005 on the Protection of Industrial Property, which transposed Directive 2004/48/EC of the European Parliament; and Law 344/2005 on Measures for Safeguarding the Observance of Intellectual Property Rights, which transposes Council Regulation 1383/2003 on Customs action.
Due to Romania's accession to the European Union, in 2010 amendments to the laws on trade marks and geographic indications were made, triggering the extension of the Community trade marks to Romania, and the need for a complete harmonisation of national regulations with the Community norms and for protection of trade marks. This is why Law 84/1998, which up until the amendments in 2010 provided only a partial transposition of the Community acquis, now completely transposes the provisions under Directive 2008/95/EC of the European Parliament and of the Council, approximates the laws of the Member States on trade marks, and regulates the situation of Community trade marks in Romania.
Major improvements were introduced to the administrative procedure for examining trade mark applications before registration, by reintroducing the publishing of these applications immediately after they are submitted to the State Office for Inventions and Trademarks (OSIM). Therefore, OSIM no longer investigates ex officio the relative grounds for refusal, which now may be invoked only through oppositions filed by parties with legitimate interest. Also, new grounds for refusal for the infringement of certification marks were introduced.
Moreover, the term of exhaustion of the rights conferred by a trade mark, which up until now could only be deduced from the legal provisions, is now expressly provided by the above amendments.
Another important aspect is the introduction of a new chapter in Law 84/1998 on Community trade marks, which supplements the provisions in the old law on the registration of Community trade marks and stipulates the Court's competence to judge in first instance litigations on such trade marks.
The new Law also increased the amount of the fines so that sanctions become discouraging for those who intend to infringe upon the rights of trade mark holders.
Some of these amendments, like those stating that OSIM no longer investigates the relative reasons for refusal ex officio, were received with reservations or scepticism by trade mark holders since they feared that their rights risked infringement by the registration of new trade marks, due to the fact that OSIM is no longer the statutorily appointed guardian of their trade marks. In order to avoid such risks, trade mark holders have to either be proactive and monitor OSIM's publications to identify possible trade mark registrations which might prejudice their portfolio as soon as possible and submit oppositions to OSIM within the prescribed deadline or , if the deadline lapses, assert their right to the trade mark in court.
Trends in strategies
Even though IP laws have evolved dramatically in past decades, efforts by the Romanian Copyright Office and OSIM, have continued to look for solutions to current issues which are more or less the same as those for the majority of countries with a longer tradition in protecting IP rights.
These solutions were materialised through the National IP Strategy 2011-2015, which sets objectives mainly focused on building on those included in the National IP Strategy for 2003-2007, but also specific objectives intended to increase the degree of creativity and innovation, such as: improving the enforcement of IP laws in Romania; creating an adequate administrative infrastructure within the national institutions involved in IP protection; training human resources specialised in IP; achieving a transparent cooperation between the national institutions and bodies involved in ensuring IP protection; and educating the public and increasing its awareness of IP rights and their importance.
An interesting objective included in the National Strategy concerns the provision of mediation and arbitration services in IP. Such services would be alternative solutions to the state justice system and would certainly offer an adequate response to current requirements. Due to the fast pace at which the arbitration procedure is carried out compared to court actions, and given the neutrality and confidentiality it ensures, the parties are often interested in choosing it as an alternative method of dispute settlement. The Romanian Copyright Office (ORDA) is involved in arbitration proceedings on collective management bodies, while OSIM envisages the establishment of a mediation service for industrial property disputes.
Other favourable changes that have occurred in Romania include simplifying trade mark registration and maintenance procedures before the OSIM by eliminating excessively formalistic procedures for EU residents and, for ORDA, making the registration procedure of a trading company or software in the National Software Register quite flexible and fast.
Businesswise, large franchisors that adhere to the policies of mature economies for IP are becoming more interested in registering their licence agreements with the OSIM in order to maximise their protection in case it is needed.
Given that Romania is one of the border members of the European Union, large players in the FMCG and food and beverages industries have intensified their efforts to stop parallel imports to avoid imbalances in terms of volume and prices in the relevant industries; trade mark holders routinely monitor the market and attack any attempt at infringement so as to strengthen their position. Also, a high demand for watching services has been noted, both on the part of holders of well-known trade marks and that of holders of trade marks that are making their first appearance on the market.
IP Court actions
IP rights are defended in Romania mainly through civil actions before specialised IP court panels.
After 2007, as a result of the implementation of Community trade marks in Romania, numerous court actions were filed in which holders of trade marks registered at Community level claimed the cancellation of the registration of these marks at national level. Unfortunately, Romanian trade marks were not extended to the EU as well and Romanian manufacturers and service providers feel disadvantaged here.
An interesting case here is the trial for annulment of the trade mark MILCOV, registered for the product brandy (coniac or cognac in Romanian) in class 33, on the grounds that it infringed the geographic indication of the reserved name COGNAC. The Court deemed that, even if the trade mark was used for the product in question or for spirits which have the essential features of such a product, it was not deceptive.
The IP system in Romania has also dealt with many claims against registrations of domain names that include well-known company names and such cases have been or are pending before WIPO and national courts of law.
Actions under criminal law are especially used in counterfeiting. In recent years tracing counterfeited goods has increased greatly and there were several seizures as a result of information exchanges and collaborations between both national and international bodies with IP responsibilities. Moreover, a workgroup was created within the public prosecutor's office to fight piracy and counterfeiting. This workgroup is responsible for encouraging, protecting and promoting creativity and innovation and, implicitly, for recognising and protecting IP rights. Nevertheless, statistics from the last three years reveal that crime continues to be generally high here.
Crimes of unfair competition are also frequent in trade marks and they are regulated by Law 11/1991 on unfair competition, which expressly defines under Article 5, Point a) the act of unfair competition, as the use of a firm, an invention, a trade mark, a geographical indication, a design or an industrial model, of topographies of an integrated circuit, of a logo or packaging that might create confusion with those lawfully used by another trader. In these trials, for acts of unfair competition to be incriminating they should both infringe upon the trade mark holder's rights and be misleading for the consumer with respect to the product or service in question.
In a recent case before the Court of Appeal in Galati dealing with the marketing of counterfeited products of famous brands like Lacoste, Dolce & Gabanna and Hugo Boss, it was established that the crime of unfair competition was not committed since the traders responsible for the counterfeiting in question did not present their products as original ones.
Furthermore, certain elements of unfair competition were deemed to apply in the case of a request for annulment of a trade mark on grounds of registration in bad faith. In such a case, the court considers the evidence that the real intention behind the registration of another trader's trade mark was to eliminate that trader from the market and harm their business.
The Romanian market has grown in recent years and this can be seen by the approach to different trade marks. An example here is the trade mark HORECA, which was invalidated by the court due to loss of distinctive character, given that HORECA is also used in Romania as a business term designating the food services sector.
Due to the role of IP in promoting and enriching national cultural heritage, which is rapidly developing, and given the dramatic consequences of IP infringements and the social impact of IP disputes, the key role in IP is played by the legislator, who should keep up with these developments and be able to adapt to them.
Also, in spite of increased interest in IP, the practical aspects of IP protection need to be constantly reformed and modernised and the input of specialists is highly required.