Implementing IP Rights: The Emerging Market of FYR Macedonia

by Dimitar Bajalski of SD PETOSEVIC, Macedonia

The Former Yugoslavian Republic of Macedonia (FYR Macedonia) is a country with a population of approximately 2 million that is located at the crossroads of Balkan and European traffic with Greece to the South and most of the former
Yugoslavia to the North as it merges into the European Union. Passing through the country is the main road and railway running north-south binding Europe with the Aegean Sea, and also the east-west road that binds the Black Sea with the Adriatic Sea. For these reasons Macedonia is a very important trade route
for European and other international companies, especially given its recent status as an applicant country for entry into the European Union. Placed at this significant geographic and strategic location, it is understandable that Macedonia is a popular trade route for counterfeit products. The country has begun to focus attention to this problem.

Even under the former Yugoslavia, the Republic of Macedonia (Macedonia) did have laws that regulated intellectual property rights (IPR). After Macedonia won independence in 1991, the Republic of Macedonia quickly became a member of the World Intellectual Property Organisation (WIPO) and in 1993 new legislation was introduced which was in keeping with international standards for the protection of IPR. The development of jurisprudence and practice of IP law in Macedonia led to a new law being passed in 2002 with certain modifications and
amendments adopted in 2003 and in 2004. At the same time, a number of laws were also passed in order to support the protection and realisation of IPR rights in this country. During these years of development in the area of IPR in Macedonia, the country also joined most major international conventions, agreements and protocols regarding IP right including The Paris Convention, The
Madrid Agreement, The Madrid Protocol, and TRIPS.

Taking the necessary steps

With the establishment of the legal and institutional frame for the protection of industrial property, the tools for fighting the trade and production of counterfeit products have been put into place. Therefore, it is possible to effectively protect trademarks in this jurisdiction provided that the prescribed steps are taken.

The first step to protecting a trademark in Macedonia is filing an application with the State Office for Industrial Property. Applications can also be filed through the Madrid System in accordance with the Madrid Agreement and
Protocol. Under the law, the Applicant may be a legal entity or a physical person, with or without and connection to Macedonia. However, the application must be filed through an IP Representative that has been duly registered with the State Administration. The same rules that apply in most jurisdictions in the
world regarding what constitutes a registrable trademark also apply in Macedonia. Therefore, the trademark must be distinctive The period of protection of a registered trademark shall begin on the date of filing the application and shall be for a term of 10 years, and may be renewed for further periods of 10 years, upon request.

As in other jurisdictions, under the Trademark Law of the Republic of Macedonia (Law on Industrial Property (No.47/30.06.2002), amended and modified 2003 and 2004, (Trademark Law)) the trademark owner has the exclusive right to
use of a registered trademark. Any commercial use of a registered trademark , or a mark that is confusingly similar, by a third party, is considered a violation of the Trademark Law. The owner of the trademark has the right to submit a petition before the court for a declaration of violation and may request the following:

• compensation of damages
• permanent injunction
• a public declaration (newspaper) at the expense of the defendant.

The Criminal Law of Macedonia provides for the possibility of bringing Criminal Proceedings against individuals whom violate intellectual property rights. The provisions provide for fines and, in extreme cases, imprisonment. This can be a psychologically persuasive tool against large or repeat violators of IPR.

Customs Administration

In addition to court proceedings, depending on the circumstances, trademark holders can enforce their rights against counterfeit goods through the Customs
Administration. On 26 May 2005, a law was passed in Macedonia introducing customs measures that specifically address the protection of intellectual property rights. The law includes provisions similar to those contained in the Customs Law of the European Union. The law allows for the filing of a
Customs Watch Application by IP rights holders. The Application must be renewed on a yearly basis and should include details regarding the types of goods in association with which the trademark is used and the names of authorised distributors and addresses of origin of the goods. The
Applicant must undertake to accept liability where goods are wrongly held and must agree to assume all storage costs.

The law gives the Customs Administration authorisation to seize goods that are suspected to be counterfeit either by their look and feel or based on where the goods originated. The law applies to all goods, whether they have been declared or not and whether they are being imported or exported, are in transit
through the country of Macedonia, or are being warehoused in a free economic zone. The Customs Authorities may act pursuant to an Application for Customs Watch filed by the right holder or can act on an ex officio basis.

Where goods have been seized pursuant to a Customs Watch Application, Customs authorities will contact the Applicant and request confirmation that the goods are counterfeit. This will usually require attendance at customs either by the right holder or their distributor. A legal representative with a power of
attorney can attend at customs to see the goods and, if necessary, take photos, which can then be sent to the trademark owner for verification. The Applicant then has ten working days, or three working days if the goods are perishable, within which to provide proof to customs that a legal action for a preliminary injunction and infringement action has been filed. The goods are then held
until the conclusion of the legal proceedings.

Within the legal proceedings, the right holder can request that the goods be destroyed. The cost of the destruction will be borne by the right holder. Given that the new procedures under the Customs law are so new, there has not yet been any practice in Macedonia so far. It remains to be seen how various goods will be destroyed and whether or not the appropriate facilities will be
found. It is likely that, as in other jurisdictions in the Balkans, this question may take some time to resolve. In certain cases, the Customs Administration can also implement a more simple procedure for destruction of counterfeit products. Customs Authorities may destroy goods without court order where the right holder files a statement within ten days which confirms that the goods in question do violate its intellectual property rights and the importer signs a declaration acknowledging that the goods are in violation of intellectual
property rights and they waive their rights to importation. Again, in these circumstances, the costs for the destruction of the goods are borne by the holder of the right.

Going forward

Although these new customs measures have only been in place for one year, initial experience by the author on behalf of a large multinational client, has been very positive.

In addition to actions by the Customs Administration, the Market Inspection Office has similar powers for enforcing intellectual property in the internal market. The Office has the authority to seize and destroy counterfeit goods that are being sold through various retail channels inside the country. Again, there is little practice in Macedonia with respect to such seizures but the author is optimistic that such tools can and should be used as part of the arsenal against counterfeit products.

The Administration in Macedonia is very aware of the importance of supporting an effective regime for the enforcement of IPR in Macedonia especially with respect to attracting foreign investment and improvement of the economy in general. It is also an important step in the integration into Europe which is very much hoped for, As such, you will find that the protection and enforcement
of your IP rights in Macedonia is now quite possible.