Litigation and eligibility: Serbia

Q: What options are open to a patent owner seeking to enforce its rights in your jurisdiction?

The owner of a patent or its exclusive licensee is entitled to commence civil proceedings against any person infringing its right to the patent. The complaint is most effective if a provisional injunction prohibiting further infringing actions is obtained during the litigation procedure.

Q: Are parties obliged to undertake mediation/arbitration before bringing a case before the courts? Is this a realistic alternative to litigation?

No, although it is always useful to try mediation. At the beginning of a court procedure, the court first offers the parties the opportunity to resolve the case by mediation. However, they are under no obligation to do so. Arbitration is not a realistic alternative to litigation.

Q: Are there specialist patent or IP courts in your jurisdiction? If not, what level of expertise can litigants expect from the courts?

There are no specialised court departments/divisions dealing with infringements of patents and IP rights. However, patent infringement matters are generally heard before courts with a higher level of competence. Patent infringement matters between legal/commercial entities in the first instance fall under the jurisdiction of the commercial courts, which are classified as higher courts. For patent infringement and IP matters involving natural persons (which fall under the jurisdiction of the courts of general competence), the higher courts are also competent in the first instance.

Q: Are validity and infringement dealt with together, or does your country have a bifurcated system?

Matters concerning patent validity and infringements are dealt with in separate procedures conducted before different government bodies.

Patent validity is determined through an administrative procedure before the IP Office in the first instance. The government decides whether to grant appeals against first-instance decisions. Second-instance decisions are final, although an administrative complaint may be filed before the administrative court within 30 days, in which case the patent’s validity will be considered in an administrative court procedure.

Patent infringement matters are decided in litigation before the civil courts, either commercial (for disputes between legal persons and commercial entities) or a higher court as a court of general competence (for disputes in which natural persons are involved as one of the parties).

Q: Who may represent parties engaged in a dispute?

Natural persons may represent themselves or may be represented by a close relative or by an attorney at law. Legal entities may be represented by a legal representative or by an attorney at law.

Q: To what extent is pre-trial discovery permitted?

Evidence is collected in court procedures. According to the provisions of litigation procedure, all evidence and proposals for obtaining evidence must be disclosed in the original complaint.

It is possible for the plaintiff to request the preservation of evidence. If it is likely that evidence could be destroyed or would be difficult to collect, the court may issue an order allowing access to premises, books, documents and databases, as well as seizure, examination and expertise. This may be requested even before a complaint is filed, provided that the complaint is then filed within 30 days of submitting such a request.

Q: Is cross-examination of witnesses allowed? If so, what form does this take?

Hearing of witnesses is possible, although the rules of procedure do not explicitly mention cross-examination. The witness first gives his or her statement. It is then possible for the judge and the parties to ask questions in order to check or clarify this statement.

Q: What use of expert witnesses is permitted?

Experts have an important role to play in patent infringement matters, as it is often necessary to deal with issues that require particular specialist knowledge. The court may engage an expert in order to determine or clarify facts that require expert knowledge – the court will often then base its decision on this expert opinion.

Q: Is the doctrine of equivalents applied by courts in your jurisdiction? If so, what form does this take?

The courts have not applied this doctrine and Serbian patent law does not mention the doctrine of equivalents. The scope of protection conferred by a patent is determined by the claims, while the description and drawings shall be used to interpret these claims.

However, for European patents the court could use this doctrine on the grounds of Article 69 of the European Patent Convention (EPC) and Protocol on the interpretation of Article 69, according to which: “For the purpose of determining the extent of protection conferred by a European patent, due account shall be taken of any element which is an equivalent to an element specified in the claims.”

Q: Are there problems in enforcing certain types of patent relating to, for example, biotechnology, business methods or software?

Although business methods and software, as such, are not considered to be inventions according to the Patent Law, patents for these can be granted under certain conditions. However, enforcing patents for computer-implemented inventions or business methods can be more difficult. Business methods and software are excluded from patentability only to the extent to which the patent application relates to the subject matter or activity as such. Therefore, it is expected that their patentability would be opposed in the enforcement procedure.

Enforcing patents for inventions in the field of biotechnology will require expertise, due to the complexity and scientific knowledge of the subject.

In general, it is more difficult to enforce technically complicated or complex patents, especially if a preliminary injunction or order for the preservation of evidence is requested. In such cases the plaintiff must demonstrate that the infringement is probable, which is easier for less complicated patents and in matters in which probability of the infringement could be made obvious to a court without the need for expert testimony.

Q: To what extent are courts obliged to consider previous cases that have covered issues similar to those pertaining to a dispute?

The courts are generally not bound by previous court decisions. However, they often apply the viewpoint set out in decisions issued by higher courts and rely on legal positions taken by the Supreme Court of Cassation.

Q: To what extent are courts willing to consider the way in which the same or similar cases have been dealt with in other jurisdictions? Are decisions from some jurisdictions more persuasive than those from others?

Courts in Serbia are usually unwilling to consider foreign case law. However, as the courts do not have enough practice in patent matters – especially in matters related to European patents – it is likely that if a party notified the court about a relevant decision dealing with a similar matter from another jurisdiction which applies the EPC, the Serbian court would take this into account. However, the Serbian court could not base its judgment on the foreign decision, as court practice and case law are not considered to be a source of law.

Q: What realistic options are available to defendants seeking to delay a case? How might a plaintiff counter these?

A defendant could obtain a long delay by initiating a procedure to nullify/invalidate the infringed patent. The court dealing with the infringement must treat patent validity as a preliminary question and interrupt the litigation procedure until it has issued a legally valid and binding decision on the patent’s validity. This may last for several years, as nullity procedures are conducted in administrative procedures before the IP Office and the government, and further in an administrative court action before the Serbian Administrative Court.

The plaintiff could prevent such a delay by requesting a provisional injunction in the lawsuit or immediately upon commencing the litigation procedure. If the court allows the injunction and if other factual and legal conditions are met, then the prohibition of infringing actions could remain in force during the patent invalidation procedure.

Q: Under what circumstances, if any, will a court consider granting a preliminary injunction? How often does this happen?

A request for the grant of a provisional injunction may be filed any time during the court procedure. It may be requested before the infringement action, provided that this is brought within 30 days of the court decision on provisional measures.

The court will grant a preliminary injunction if it can be shown that there is a reasonable probability that the right is being or shall be infringed. If there is a risk that the injunction might cause irreparable harm to the defendant, the court may order the plaintiff to submit a bond as security in order to prevent any abuse of the system.

The court may pronounce the following provisional measures:

• seizure and/or withdrawal from the market of products made or obtained by patent infringement;
• seizure and/or withdrawal from the market of implements (equipment, tools) used to produce infringing products; and
• prohibition of further infringing actions.

This third measure is most frequently applied.

Q: How much should a litigant budget for in order to take a case through to a decision at first instance?

The court costs depend on the value of the dispute. The maximum court cost for one action is around €3,500. At first instance, there is a charge for the complaint and for the decision itself. Half of these amounts are charged for requests and for decisions on the issuance of provisional measures. The costs of translation, verification and certification of documents can also prove significant and are not refundable. Attorneys’ fees depend on the value of the dispute and the complexity of the case. The cost and fees for an expert witness could also prove significant. Costs for a first-instance decision can be estimated at roughly between €10,000 and €20,000.

Q: How long should parties expect to wait for a decision to be handed down at first instance?

Although Serbian patent law provides that a complaint for patent infringement is urgent, the first-instance procedure is unlikely to take less than one year. If a question of patent validity is raised during a patent infringement procedure, the first-instance procedure could last much longer as the court would have to interrupt it in order to deal with the issue of validity.

Q: To what extent are the winning party’s costs recoverable from the losing party?

Not fully. The court does not usually accept the refund of all costs, but only those incurred in the court procedure, such as court taxes, experts’ fees and attorneys’ fees. Attorneys’ fees are calculated in accordance with set tariffs (for attending hearings and preparation of plaint and petitions), whereas the real costs and engagement are often much higher. Clients based abroad are affected because the courts do not allow refunds for the costs for translation and verification of translation, which can be significant.

Q: What remedies are available to a successful plaintiff?

An action for the infringement may contain a claim for:

• establishing the existence of an infringement of right;
• prohibiting acts that infringe the right;
• compensation for damages caused by the infringement;
• publication of the court decision at the defendant’s expense;
• the seizure or destruction of products made or obtained as a result of the infringement of right, without compensation of any sort;
• the seizure or destruction of material or articles (eg, equipment, tools) predominantly used in the creation of infringing products, without compensation of any sort; and
• the supply of information about third parties participating in the infringement.

Q: How are damages awards calculated? Are punitive damages available?

Damages are calculated based on general principles and the Rules of the Law on Obligations and Torts. Damages consist of actual losses and lost profits, which must each be proved.

There are no punitive damages other than a provision in the Patent Law which states that if an infringement was committed intentionally or as a result of gross negligence, the plaintiff may claim up to three times the amount of royalties it would usually receive if the invention was legally exploited. However, the plaintiff must prove that the infringement was committed intentionally.

Q: Under what circumstances might a court grant a permanent injunction? How often does this happen?

There is no permanent injunction as such in Serbian legislation, although an injunction as a provisional measure is instantly enforceable.

Q: Does the losing party at first instance have an automatic right of appeal? If not, under what circumstances might leave to appeal be granted?

The losing party may appeal the first-instance injunction. However, if the second-instance court confirms the injunction, it can remain in force until the end of the procedure. Once the judgment becomes legally valid and binding, the prohibitions and orders become permanent and remain valid for as long as the patent is valid.

Q: How long does it typically take for the appellate decision to be handed down?

The appeals procedure is slow. It usually takes at least one year before the second-instance court decides on an appeal. Appealing procedures against decisions on provisional measures and injunctions can take between six months and one year.

Q: Is it possible to take cases beyond the second instance?

Yes. The Patent Law explicitly provides that revision – which is an extraordinary legal remedy – is always allowed against second-instance final court decisions made in disputes relating to the protection and use of inventions. Revisions fall under the competence of the Supreme Court of Cassation, the highest court in the country.

Q: To what extent do the courts in your jurisdiction have a reputation for being pro-patentee?

There are not enough court cases in patent matters to determine whether the courts are pro-patentee. However, the legislation today is significantly improved and more pro-patentee than it was previously. The Patent Law has been amended over the past several years and now gives much better legal grounds for the efficient enforcement of IP rights.

Q: Have courts in your jurisdiction handled cases relating to standard-essential patents and fair, reasonable and non-discriminatory licensing since the ECJ’s Huawei v ZTE decision? If so, what have they decided?

The Serbian Patent Law does not recognise standard-essential patents as a specific category of patent. To our knowledge, there have been no cases relating to fair, reasonable and non-discriminatory licensing since 2015.

Q: If they have not handled such cases, how would you expect them to approach the issue?

The Serbian courts would apply the provisions of the Serbian Patent Law which regulate compulsory licensing. In this particular case, they could apply the rule set out in Article 26: “If the rights holder refuses to license the right of commercial use of a protected invention to other persons or sets unreasonable conditions for such licensing, the government authority competent in the field in which the invention shall be employed may, at the request of an interested party after considering the merits of each individual case, grant a compulsory license… when it is necessary to remedy a practice determined after judicial or administrative process to be anti-competitive.”

Q: Has your jurisdiction signed the Agreement on the Unified Patent Court? If so, when do you expect it to be ratified?

No, and signature is not expected soon.

Q: Will your country play host to one or more divisions of the Unified Patent Court?

No.

Popovic Popovic & Partners

Takovska 19

Belgrade 11120

Serbia

Tel +381 11 3239 442

Fax +381 11 3242 646

Web www.ppsp.rs

Katarina Kostic

Partner

[email protected]

Katarina Kostic is a partner at Popovic Popovic & Partners. She graduated from the University of Belgrade Faculty of Law (LLB, 1990) and is a registered IP agent. Ms Kostic specialises in patent and trademark invalidations, litigation, IP infringement, industrial property, the protection of IP rights before Customs and the market supervision of counterfeit goods.