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February 17, 2016

Enforcement of Rights on Registered Marks in Bulgaria

What is necessary to  know when you are the owner of a registered mark in Bulgaria? How to protect your exclusive right according to the Bulgarian legislation in the field of trademark protection? You can do this by means of several ways provided by the Law.

  1. Administrative-penal procedure led by the Patent Office of the Republic of Bulgaria

Art. 81 of the Law on Marks and Geographical Indications (LMGI) envisages a procedure for imposing sanctions for the infringement of IP rights which is initiated by submitting an application with the Patent Office (PO) – the only authorized state body for IP rights protection in the Republic of Bulgaria. The warning is given in writing by the rights owner or by his/her representative, and it should contain full and detailed information about the owner, the supposed infringer (natural or legal person), and concerning the very infringement.

An important element of the application is the complete and exact description of the supposed infringement – in what way, where, and when it was committed, or is being committed, Information regarding the goods indicated with a sign, similar or identical to the protected mark, the rights on which have been allegedly infringed, as well as any other information regarding the infringement, which could be helpful for its exact identification.

Samples of the goods bearing the sign which is supposed to infringe the protected rights, as well as any other evidence of its use in violation of LMGI, should be provided for the purposes of defining the existence or lack of infringement.

Following the reception of the application by the Patent Office, the TM examiners carry out an examination of the sample(s) enclosed to the application, and take a preliminary position on the existence of an infringement. The examination establishes: whether a similarity or identity exists of the said sign to the protected trade mark, and the goods indicated with the sign, with those for which the mark is registered, which similarity could mislead consumers regarding the type, origin, quality and other distinguishing features of the goods, indicated with this sign.

The position of the PO examination is a ground for performing an inspection at a respective spot, indicated by the applicant, of the supposed offender, which could be an outlet (shop), a warehouse, or any other premises, in which the infringement is supposed to be committed. The proceedings for establishing a violation is carried out under the Law on Administrative Offences and Punishments (LAOP), and it is only permissible in case that  no criminal  prosecution has been instituted against the infringer.

The inspection on the spot of a supposed infringement, indicated by the applicant, is carried out by an employee of the Patent Office, with the assistance of the criminal police organs in the respective district.

As a result of the inspection, in case of established infringements (i.e. use of a sign /symbol/ similar or identical to the registered mark, without the permission of the owner of the rights on it) the inspecting official shall draw up an Act to the offender. By this action, administrative-penal proceedings are instituted. The person drawing up the Act takes possession of the goods, or, if due to their quantity this is impossible, samples of them for subsequent examination. In the event of a great volume or quantity of the goods, the goods are detained, the room in which they are placed is sealed, and they are left for safe custody to the owner, or to a third party, by decision of the official having drawn up the statement.

The administrative-penal proceedings continue with a subsequent examination at the Patent Office for a final establishment of the infringement. As a result of the position from the examination performed, in the event of an infringement found, the president of the Office, in his capacity of an administrative-punitive body, takes a stand and issues a punitive order, by which a fine is imposed on the infringer to an amount, corresponding to the degree of the infringement, and depending on whether it is a first or a repeated one. The amount of the fine varies from 500 to 1500 BGN for natural persons (in the event of a first infringement) or from 1500 to 3000 BGN (in a repeated one), and from 1000 to 3000 BGN for legal entities (in the event of a first infringement), or from 3000 to 5000 BGN (in a repeated one). After the delivery of the Penal Act to the infringer, it proceeds with the collection of the sum of the fine imposed in accordance with the provisions of the Law on Administrative Offences and Punishments.

The punitive order of the administrative-punitive body – the president of the Patent Office is subject to appeal before the regional court, in the area where the infringement has been done or completed. The infringer may appeal against the order within a 7-day term from the delivery of the order via the Patent Office which term is also the term for voluntary execution. The decision of the court of first instance is subject to cassation appeal before the administrative court in accordance with the provisions of the Code of Administrative Proceedings.

The main goal of this procedure, as well as the imposing of the respective penalty – a fine, is the discontinuation of the infringement and educative-preventing effect, but not claiming for compensation for damages caused. Such compensation may be sought through the civil common law. I shall explain the procedure for it below. However, the administrative-penal procedure via the Patent Office may serve as a good basis for collecting evidence  for the one based on the civil law. In this sense the combination of the two is a good variant for protection. 

  1. The method of protection based on civil common law is initiated by means of laying a claim before the City Court of Sofia by the person entitled to a claim according to the Law on Marks and Geographical Indications, namely the owners of rights or licensees of an exclusive license, whereas the licensee may only lay a claim with the owner’s consent, if not stipulated otherwise in the license agreement.

The claims for infringements may be the following ones: for establishing the fact of the infringement; for its termination; for a compensation for damages; for confiscation and destruction of the goods, being the subject of the infringement, as well as the means used for committing it. Simultaneously with the respective claim, the claimant may also demand through the court that the goods being the subject of the infringement are handed over to him; that the cost related to the storage and destruction of the goods being the subject of the infringement, or to the announcement of the substantive (operating) part of the decision by the court in two daily newspapers, or on the TV, are paid to him.

It is recommended that before laying the claim for compensation against the offender, the owner of the rights (future claimant under the claim proceedings) demands the   imposition of a security of the future claim for the purpose of securing the future takings related to the claim after the passing of the decision by the court and its entering into effect.

There are several types of security measures: imposition of an interdiction on immovable (real) property, distraint of goods and chattels (as for example the goods marked without permission with a sign similar or identical with the registered one), and receivables of the debtor (bank accounts, etc.); other suitable measures, determined by the court, including stopping a motor vehicle from circulation, stopping an execution, etc. It is possible for the court to allow several securities. The amount of the security allowed should correspond to the expected compensation. In order to prove this amount in filing the application for imposing a security, as well as in the future claim proceedings, it is necessary to enclose to the application, and to the claim very serious evidence for the compensation due as a result of the infringement of the rights on IP. If required, an evaluation by experts shall be carried out for establishing this amount in the course of the very proceedings.

The combined application of an administrative-penal procedure (as a beginning) and the subsequent claim proceedings has the advantage that in claims for establishing and  termination of the infringement, the procedure of quick proceedings can be used, which shortens the term for examining the case (lawsuit). In this case a punitive order, issued by the Patent Office which has come into effect (if it has not been appealed through the court) or a decision by a court which has come into force (if the punitive order has been appealed, has passed through court proceedings, has been confirmed by a supreme court, and is not subject to an appeal to any further extent) serves as a ground for laying a claim by the quick procedure.

  1. The punitive method of protection against infringements of rights on intellectual property is based on a text from the Criminal Code, according to which the punishment of  imprisonment of up to 5 years, and a fine of up to 5 000 BGN is envisaged for the violator. In this case the responsibility is personal, i.e. the procedure is initiated by giving a warning personally against a natural person or a person having the capacity of a manager or representative of the legal entity.  The warning is given either to the Regional Prosecutor’s Office of Sofia, and the Police Directorate of Sofia, Economic Police Department, or directly to the respective Regional Police Department, in whose area the infringement was committed or completed. In these proceedings the object of the crime is confiscated in favour of the state, no matter whose property it is, and is destroyed.

It is important to note that in the event of instituted criminal prosecution of the person, an administrative-penal procedure cannot be initiated against him for the same infringement (offence), i.e. the administrative-penal, and the punitive method cannot be applied simultaneously for one and the same violation against one and the same person.

  1. Proceedings via the Commission for the Protection of Competition (CPC) under the Law on the Protection of Competition (LPC).

These proceedings are initiated by submitting an application to the Commission for the protection of Competition on behalf of the holder/owner of rights or the licensee of an exclusive license with the knowledge of the person entitled. The provisions, on whose basis a procedure can start are written in chapter 7 of the Law on the Protection of Competition Prohibition of unfair competition. There are several prohibitions: for damaging the good name of competitors; for misleading; for deceptive and comparative advertising, for imitation, etc.

The contents and the evidence part in this case are similar with those in the administrative–penal procedure. After the institution of proceedings, a working team is appointed at the Commission which carries out an investigation of the circumstances related to the infringement. In the course of the investigation material evidence is collected (verbal, written, electronic, etc.), verbal and written explanations are obtained from the parties to the proceedings (the claimant, having suffered the damages, and the infringer), on-the-site checks are performed in warehouses and other premises, where the infringement has been committed, opinions related to examinations by experts, etc. are permitted and enclosed. After the termination of the investigation, the working team presents to a monitoring member of the commission a report, containing a factual and legal analysis of the case, as well as a proposal for the method of completing the proceedings. At an open meeting or a meeting in camera, the Commission adopts the following decisions: establishment of the infringement committed, and of the infringer, and imposition of a property sanction or a fine; it rules the termination of the infringement (offence).

The decisions of the commission, if not provided otherwise by the law, may be appealed against in relation to their legitimacy before the Supreme Administrative Court by the parties, and by any third party having legal interest. Appeals against the decisions are lodged within a 14-day term, which starts from their announcement in accordance with the procedure of Code of Administrative Proceedings, and for the third parties – from their publication in the electronic register of the commission.

In establishing an infringement, the Commission for the Protection of Competition imposes a property sanction. The natural persons having contributed to the commitment of infringements under the law, if the offence does not represent a crime, are punished by a fine amounting from 500 to 50 000 BGN. In determining the amount of the fine of the legal entity, the gravity and the duration of the infringement, the damages caused, and other relevant circumstances are taken into consideration.  The concrete amount of the fine is determined by the commission by definite methodology. Property penalties and fines, imposed on the grounds of decisions by the commission are collected in accordance with the procedure of the Code of Tax and Social Security Proceedings.

It is recommended that this method of protection is combined also with the civil law one, by means of lodging a claim on the part of the owner of the rights, for compensating damages caused on the part of the offender. The decision of the Commission for the Protection of Competition shall be included in the evidence materials both for establishing the infringement, and for determining the amount of the damages, and the compensation for them, and it is a prerequisite for the pronouncement of a judgment by the court for the payment of a compensation.

Generally speaking the methods of protection of rights on registered trademarks give provide diverse possibilities for action both separately, and in combination, and depending on the strategy policy of the company – owner of the rights. The desired final results can be obtained in different ways.

Polina Bakalova, LL.M.
Attorney-at-Law

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