logo-right

Interview with Vladimir Penkov for the Newspaper Klasa, July 2010

Q.: Are attempts to steal or imitate trademarks on the rise, and why?

A.: Trademark theft peaked between 2000 and 2007, after which there seems to have been no increase in the number of attempts to ‘steal’ a trademark. The reason for that is because, following the accession of Bulgaria to the European Union at the beginning of 2007, all European brands automatically extended their application and protection over Bulgarian territory. Thus the brand names of the big and famous international corporations, which until that time had not undertaken any steps to protect their rights in the territory of the Republic of Bulgaria, became by themselves an obstacle to any attempts on the part of fraudsters to apply for registration of identical or similar trademarks.

 

Q.: Are changes in the law needed, and what should they be?

A.: In the 10 years of its existence, the Trademarks and Geographical Indications Act has displayed certain flaws which the legislator has attempted to rectify through subsequent amendments over the years.

Thus, for example, before the latest amendments to the Act (adopted March 9th, 2010), the rightful owner of a trademark which, though not registered, was used for business purposes, had no leverage to effectively prevent the registration in Bulgaria of an identical trademark by a third party acting in bad faith. The only course of action left open for such an entity was to file a written objection against the registration in question, though in practice, in the absence of a prior registration or proven violation of preceding rights, the Patent Office had no legal grounds for turning down the registration application. It was only after the registration applied for was granted (a process that could take up to two years), was the rightful owner in a position to demand that it were struck off the register, and solely subject to a confirmation by a court decision of the fact that the applicant had acted in bad faith while applying for registration. In other words, the procedure included court proceedings in response to a claim seeking the invalidation of the registration application, which could take another two years or more. By virtue of the recent amendments, however, the existence of opposition on behalf of the rightful trademark owner against the registration by a third party of that entity’s as yet unregistered trademark which is already used in Bulgaria can serve as grounds for turning down an application for registration that was filed in bad faith. 

The recent amendments aim at specifying further the trademark data contained in the State Register, supplementing the absolute and relative grounds for denial of registration of a trademark, supplementing the procedure of striking a trademark off the register, setting time limits for issuance of a court decision for annulment or deletion of a trademark.

The most significant amendment, however, to become effective as of March 10th, 2011, concerns the registration procedure. Currently the experts of the Patent Office consider a registration application on its merit, by weighing whether the trademark applied for can be registered on the evidence of preceding trademark registrations. After March 10th, 2011, such consideration on the merit of an application will be dropped in line with the Community trademark registration procedure, whereas any interested party which believes that the trademark applied for infringes on its earlier rights may file a motion with the Patent Office opposing the proposed registration. This motion will serve as grounds for the Patent Office to initiate opposition proceedings. If no motion of opposition is filed within a set time limit from the date of promulgation of the registration application, the trademark applied for will be deemed eligible for registration. This amendment to the registration procedure for national trademarks requires a profound change in the attitude of the private sector to intellectual property. From the moment of entry into force of the opposition proceedings provision, all owners of earlier rights will need to monitor all filed trademark registration applications and if they believe that any of those constitutes an infringement on their registered rights, they should take the necessary action within the time limits provided by law.

In other words, these changes in the law were made because they were necessary. Whether, and to what extent, they will resolve all issues in the field of trademark registration and the protection of the rights of trademark owners, only practice will show.

 

Q.: Which trademarks are the most common targets of copyright infringement?

A.: Of course, those are the famous brands. Irrespective of whether they are owned by foreign or Bulgarian companies, the well-known popular brands are the ones that are most often stolen or imitated.

 

Q.: Do Bulgarian or foreign companies assert their rights more often?

A.: No matter whether Bulgarian or foreign, any company whose rights over intellectual property have been violated seeks proper protection. On account of the protracted duration of a court trial and the expenses it entails, in our practice this legal option is generally avoided whereas an out-of-court settlement of disputes is the preferred scenario.

 

Q.: Which are the most common mistakes made by Bulgarian companies when they do seek judicial intervention, and is that really worth the money?

A common error of Bulgarian companies is that they neglect the need to have the trademarks used in their business activity properly registered. They do not seem to realize that in their desire to spare themselves the cost of consulting an expert and having their trademark registered, they take upon themselves future costs that are many times higher: the cost of legal counsel, of having the fraudulently registered trademark struck off the register, and the all-round cost of court proceedings. The biggest losses, however, occur when the trademark thief bans the rightful owner form using the trademark in its business activity or enforces border control measures on goods bearing that trademark. In such cases, the rightful owner who saved on the cost of registration of the trademark or did not take seriously the need for such registration in the first place, suddenly ends up in a situation where its business activity is completely blocked, with the ensuing daily financial losses that exceed by orders of magnitude the cost of registration.

Whether Bulgarian companies make errors in court depends, I think, entirely on their legal counsel.

With respect to the costs of legal proceedings I can say that when it comes to intellectual rights violation, the cost is always worthwhile. Otherwise a company may end up unable to perform its business activity, for reasons that its trademark was fraudulently registered to another entity.