Facing controversy? Protection of intellectual property rights in Romania – still a sensitive issue only few months prior to integration

Around 80 participants, including IP lawyers, judges, university professors and experts of the State Office for Inventions and Trademarks (OSIM), as well as representatives of the advertising industry, tobacco, pharmaceutical, food, banking, energy sectors discussed about the laps and shortcomings in the Romanian legislation during Counterfeit and protection of trademarks, industrial designs and models symposium organized by Țuca Zbârcea & Asociații law firm and State Office for Inventions and Trademarks (OSIM) with the media support of Business Review.

Although Romania`s legislation on intellectual property is in line with the EU standards, the enforcement of IP rights still has its ups and downs. Areas of particular concern remain the copyright piracy and trademark counterfeiting, as well as the settling of potential conflicts between Community trademarks and national trademarks. After 2007, the protection rights granted to a number of 700.000 Community trademarks will be automatically extended to the territory of Romania. To date, in Romania there are 200.000 registered trademarks and the number is growing rapidly. In 2005, the Romanian sole authority in the field – OSIM - examined 21.000 new applications out of which 10.000 were filed by foreign companies active in Romania.

Guerrilla marketing and the new war of trademarks
Ciprian Dragomir, Partner with Țuca Zbârcea & Asociații, analyzed the infringement of trademark rights within an advertising campaign and on combating ambush marketing. He pointed out several strategies for fighting the infringement of trademark rights in accordance with the trademark law. According to Dragomir, Law no. 84/1998 does not ensure full protection against comparative advertising. In Romania, whilst advertising law allows the type of advertising explicitly or implicitly identifying a competitor or the goods and services supplied by the same (comparative advertising), it prohibits comparative advertisement methods which are deemed to be detrimental to the consumers and/or competitors. "In our expert opinion, in order to avoid ambush marketing, any organizer / sponsor of an event should consider the following: ensuring a legal/contractual basis of the relation and/or securing protection of as many distinctive elements identifying/distinguishing the event as possible – e.g. signs, mascots, photos, logos - through registering them as trademarks or industrial designs", Dragomir added. The legal expert at Tuca Zbarcea & Asociatii said that, to date, one can implement both ambush marketing campaigns and comparative advertising without being held responsible: "the paradox is that, at the same time, one can always invoke ways of legal protection against those practices in a timely and efficient manner", concluded Dragomir.

To have or not to have a new law on geographic trademarks and indications
Ștefan Cocoș, Chief of Trademarks Department (OSIM) pointed out the alternatives to a new law on geographic trademarks and indications, following the envisaged accession to EU. After 2007, national trademarks and Community trademarks will co-exist but the implementing rules for the Community trademark are far more comprehensive and accessible, according to Cocoș. He also pointed out the advantages of the Community trademark system: easy access to "new comers" to the system; easy release of blocking trademarks and abandoned trademarks; fair (low) number of contestations/oppositions; publication (and opposability) in short term. Ștefan Cocoș concluded that the enforcement of a new law replacing Law no. 84/1998 should only be done after a careful analysis of both advantages and disadvantages and implications on the market.

Potential conflicts between national trademarks and Community trademarks
After 2007, the protection rights for any registered Community trademark and for which an application has been filed prior to the date of accession will extend automatically to the territory of Romania. Although the Community trademark system leaves the national trademark systems of members' States unaffected, it is likely to see an increase of IP litigation files both nationally and within EU. According to Carmen Ștefan, Expert in the Trademark Post-Examination Proceedings Commission, OSIM, "potential conflicts may arise between earlier national trademarks and Community trademarks, as well as between earlier Community trademarks and national trademarks." The holder of a national trademark would not be entitled to file a legal action for the cancellation or revocation against the holder of a Community trademark, since protection for national trademarks is granted exclusively on the territory of the respective State. Instead, the holder of earlier Community trademarks would be entitled to file a legal action before the competent judiciary authority for the cancellation of a national trademark whose holder might even lose his/her rights upon the respective registered national trademark. Following the accession to EU, Romania would have to create first and second rank jurisdictions called Community trademarks tribunals.

Taking legal action against counterfeit
Robert Roșu, Partner with Țuca Zbârcea & Asociații and head of Litigation and Arbitration Department, presented several counterfeit legal cases. One current issue, which was largely debated by the courts’ practice in the matter of intellectual property, is whether an action for counterfeit is admissible as long as the defendant’s registered trademark was not cancelled. "In our opinion, no restrictions should be imposed with respect to a trademark holder’s right to defense for the mere reason that another trademark, although registered afterwards, enjoys the same protection", said Roșu. According to Țuca Zbârcea & Asociații`s legal expert, it is only the holder of a registered trademark or, the most, the applicant of a trademark registration, which are allowed to file an action for counterfeit, while the action for cancellation may be filed by any interested person. Therefore, if the law maker really intended to make available to the trademark holder only the action for cancellation, it would have no longer provided the possibility for such action to be filed by any interested person and would have no longer expressly instituted the trademark holder’s right to file an action for counterfeit against the very holder of a similar trademark registered subsequently. Furthermore, the law maker expressly provided for a list of facts which may be considered acts of counterfeit and for a specific list of events/grounds which may justify an action for cancellation. In other words, the scope of the two types of action differs from one another. Moreover, the effects of admitting the two actions are different as well. According to Roșu, "while the action for cancellation is aimed at annulling the protection title of a trademark holder, the action for counterfeit actually results in forbidding the use of that trademark, the withdrawal of products from the market or even the destruction of products traded under the trademark illegally used. Hence, more drastic, more powerful and more significant measures for the activity of the previous trademark holder can be achieved and implemented by means of an action for counterfeit", concluded Robert Roșu.

Different procedures for granting protection titles for industrial property objects
Liliana Badea, Chief of Industrial Designs and Models Office, OSIM, analyzed the protection of EC Designs/Models and pointed out the similarities and differences between the Romanian and EU legal framework in intellectual property, more notably in terms of the examination procedure for granting protection titles for industrial property objects. According to Badea, only few of the European States are carrying out an extended examination for absolute grounds, including Great Britain, Denmark, Portugal, Hungary, Czech Republic, Bulgaria, Finland, Sweden and Romania. The Community absolute grounds examination is based on the compliance with the general terms and conditions and implies that a Community design shall not subsist in a design which is contrary to public policy or to accepted principles of morality. According to OSIM's expert, it is mandatory that OSIM would examine all the requirements for granting protection of an industrial design (in terms of individual character, novelty, shape and technical function, as well as the requirement that the design or industrial model is not contrary to public policy or to accepted principles of morality).

Exhaustion of Trademark Rights – applying national or international principles?
Having a trademark duly registered with the relevant authority (OSIM) and thus being the exclusive and lawful owner and user of such trademark grants to the owner absolute protection against third parties during the registration period? Raluca Tiparu, Senior Associate at Țuca Zbârcea & Asociații said that article 35 of the Trademark Law provides for the rights of the owner in order to protect its trademark against third parties actions, including the possibility to prohibit the import or export for its products under the respective trademark. She pointed out that article 37 of the same law expressly mentions that the owner cannot prohibit third parties to store, offer to sale or sale the products under the trademark to the extent that such products have been initially placed for sale by the owner itself or with its consent. According to Țuca Zbârcea & Asociații`s legal expert, "this limitation of the owner’s absolute rights with respect to its trademark created the concept of trademark exhaustion on the basis of “first sale rule”. Thus, when the owner itself placed the goods on a certain market, it cannot further intervene and obstruct the free resale of such goods within the same market."

She further explained that trademark exhaustion is differently treated in various jurisdictions with respect to the territory for which exhaustion is considered: under the national exhaustion approach, the producer cannot obstruct resale of its products that he put on the market for the first time within the respective jurisdiction. If international exhaustion is accepted within a certain jurisdiction, the owner cannot prohibit resale of products anywhere in the world if he sold such products first irrespective of the country of first sale.

Tiparu pointed out that Romanian Trademark Law as well as national jurisprudence has not decided yet if national or international exhaustion applies in Romania: "however, in view of Romania’s accession to the EU it would be more interesting to take into consideration the European view on this matter. Currently, at EU level the Community-wide exhaustion principle applies. Consequently, if a producer sold its products under the trademark in one Member State, it cannot oppose to the resale of the respective goods in any other Member State of the Community. Trademark exhaustion allows parallel imports which are considered to represent a valuable benefit for end consumers, since their purchase options are thus increased. Based on the practice of the European courts, parallel imports within EU should not be prohibited, nevertheless, the producer has the right to oppose imports from non-EU States", Tiparu concluded.

Other interesting points were made by Georgeta Mitroi, Chief of Service at the National Customs Authority who presented the measures taken by the Customs Authority in the field of intellectual property rights. As an example, the total value of confiscated goods in Constanța South Customs Office amounts to EUR 29,881,079.

Also, Liliana Koroși, Judge at the Bucharest Court of Appeal (9th Civil Division) presented a case study on the protection of trademarks and industrial models. Luiza Mocanu, Trademark Examiner Expert, OSIM, offered an analysis on the similitude of combined and non-traditional trademarks, while Eliza Niculescu, Chief of Office for the Examination of National Applications, OSIM, analyzed the similitude between verbal and figurative trademarks. Furthermore, Mihaela Ciocea, Judge at the Bucharest Court of Appeal (3rd Civil Division) presented the means to defend industrial property rights by action against unfair competition, and Alexandru Ștrenc, Deputy General Manager, OSIM, has analyzed the interferences between Trademark and Domain Name. The representative of the General Inspectorate of the Romanian Police, Dan Olteanu, Chief Commissary, presented several of the investigations carried out in recent complex cases. University Professor Lucian Mihai pointed out current issues on defending trademark rights and Lecturer Romeo Popescu identified the criteria for the establishment of indemnifications within the action against trademark counterfeiting.

For further information on the issues discussed at this event, please contact Ciprian Dragomir, Partner, e-mail: ciprian.dragomir@tuca.ro