Interview by Mr. Atanas Kostov on the realities of Bulgarian intellectual property.

1.Dear Mr. Kostov, could you introduce to our readers the law firm "IUSAUTHOR" - after all, it is one of the leading law offices in Bulgaria in the field of intellectual property protection? 

With pleasure. The law firm “Kostov & partners” was established in 2004, and to this day, almost 20 years later, it deals exclusively with intellectual property. I always say that our law firm is small, kind of boutique. It has, for example, created and trained several PhDs in law, and we have had many interesting cases over the years - we won an opposition case against Facebook, who opposed a trademark of a Bulgarian applicant that still exists today. Recently we settled the Chudomir(one of the most famous Bulgarian righters) copyright case, with a record compensation award for copyright claims in Bulgaria - 34,000 BGN, and last month we achieved a new record in this respect - 68,000 BGN compensation for copyright infringement, with the claim concerning unauthorised use of audio-visual content filmed in Bulgaria by Austrian producers.

What I am most proud of is that the website of “Kostov & partners” as turned into an open, completely free online library for content (articles, news) that concerns entirely intellectual property. Some of the material has been read over 50 000 times. Perhaps this is also due to the fact that in 2022 we were nominated and received an award for Law Firm of the Year in Bulgaria. At the moment, the firm employs 5 people, including 4 lawyers and one technical assistant. One of my colleagues, who deals entirely with Internet law and blockchain technologies, is a French colleague, a lawyer - Martin Groan, who graduated in law at the Sorbonne. We have been friends for many years and I finally managed to convince him to start working for us, as he has been living and working in Bulgaria for 14 years.

2.What do you think are the most significant changes in the intellectual property system that should be made nationally? 

In recent years, several key directives and regulations have been implemented in Bulgarian legislation, which still cannot be understood by the Bulgarian court as law enforcement. What do I mean?

As you know, Directive 2004/48/EC (the so-called IPRED Directive) was implemented into Bulgarian law as early as 2006. To date, its Article 13, which is enshrined in a total of 6 special tort actions in Bulgarian intellectual property law (two each in the Bulgarian Copyright act, the The Industrial design act and Trademark and geographical indications act) has not been properly applied, as the principle of royalties as the basis for possible compensation is totally incomprehensible to Bulgarian judges and they enforce their decisions through the mechanism of Article 45 by the Law on Obligations and Contracts, which is a complete legal mistake, leading to failure to prove the amount of the claim, unlawful reduction of its amount and in many cases to losing the case due to ignorance of this mechanism.

 The CJEU in its reference for a preliminary ruling in case C-367/15, Stowarzyszenie "Oławska Telewizja Kablowa" v. Stowarzyszenie Filmow- ców Polskich, says that the royalty that the injured party would have received should be multiplied by two, and in some cases by three, in order to achieve the principle of general prevention in intellectual property law, i.e. to punish someone with the logical civil sanction that is sufficiently fair and has a deterrent and educational character.

I will give an example to make myself understood. If a tort claim is brought under Article 95a of the Bulgarian Copyright act for 10,000BGN in pecuniary damages and an expert in the case has determined that the eventual royalty that the author should receive is 3,000BGN, the Bulgarian court did not multiply this amount by three (as the CJEU says is correct in order to comply with the mechanism of Article 13 of the IPRED Directive), but divided by three, awarding costs to the losing party for the rejected part of the claim - an unlawful argument of Article 78(3) of the Bulgarian Code of Civil Procedure(CCP).

Here we come to the next legal paradox in Bulgarian intellectual property law, which the Bulgarian court imposes as surreal illegality. It turns out that the winning party very often actually loses the case because the court awards the losing defendant costs that are proportionate to the rejected part of the claim, which in most cases are higher than the damages awarded, because the Bulgarian court does not apply Article 13 of the IPRED directive. Moreover, the Bulgarian court has not even read Article 14 of the same Directive 2004/48/EC, which states that the losing party is not entitled to costs and must bear the costs and fees of the injured party, i.e. this special rule derogates from the general rule of Article 78(3) of the CCP! But who to read! It is difficult!

The last time I explained this to the judges at the Sofia Court of Appeals, they told me that "because I graduated abroad" (I graduated from Plovdiv University, according to my information), maybe I don't interpret correctly the CCP and that's why I talk to them so much about Directives. I had to explain that it is high time Bulgarian judges to accept law mostly as a science and read it carefully, because Directive 2004/48/EC is a fact in Bulgarian jurisdiction since 2005 and ignorance of this fact, and not applying its Article 13 and Article 14 correctly leads to brutal legal absurdities in Bulgarian law practice of the type "to win a case, but actually lose it" and all this to be "legal"!

3.Why are you so harsh in your statement towards the Bulgarian judiciary, please explain?

I just dream of objectivity, respect and law enforcement on a scientific level, nothing more. I need to give one more example on the topic. Years ago I wrote an article about software patents. You know that they were originally unpatentable, but an English judge reversed the case law on the subject not only in England, but all over the world. How does that happen?

The English magistrate in question was an examiner at the UK Patent Office before he started his career as a judge, and from there he knew in detail the technical features of patents as a legal framework and issues. In his panel as a judge a case arose about bronze casting in a blast furnace, which process was monitored by computer. What happens? The bronze is cast at exactly 1000 degrees temperature. If that temperature drops, the blast furnace bursts and dozens of workers in the foundry die. Recognizing this fact, the English judge decided that since the software provided the technical function of casting the bronze at the exact temperature, the patent for this process was patentable, as opposed to the prior practice that "software inventions have no technical function," hence "are not patentable." 

I have made the case study. "The Bear" turned out to be one of the most famous trademarks in the USA. I wrote an opinion at my client's request and sent it to the New York court online. The court accepted it and considered it, along with the other evidence in the case, without me being a lawyer with legal capacity in the US. But that didn't change things. My client had infringed a trademark that was common knowledge in the US and the $110,000 trademark infringement claim was upheld. I'll say it again - $110,000 for a carpet. You may already suspect that I'm going to say that's not going to happen here in Bulgaria anytime soon, because it doesn't hold up to having innovative businesses here, nor does it read anything other than "bankruptcy", even though the most innovative, multi-billion dollar businesses are behind some domains. On that base the Bulgarian judges ruled that the domains are "not a commercial activity" and therefore "could not be trademarked"! This is a 21st century decision of the Bulgarian Supreme Court of Cassation! 

To conclude with the absurd examples of Bulgarian law enforcement, I will say that for nearly 7-8 years the Commission for Protection of Competition, Sofia Administrative Court and Supreme Administrative Court have been amicably accepting "as legally correct" that unfair competition is not part of industrial property, and this nonsense, which is unprecedented in its size, was initially put into use by the "great legal advisers" of the Commission for Protection of Competition, and it has post facto become a leitmotif of the Sofia Administrative Court and Supreme Administrative Court in cases concerning Article 35, paragraph 1, paragraph 2 and paragraph 3 of the Unfair competition act, i.e. imitation of designs, trademarks and domains, obviously all objects of industrial property! 

I have been explaining for several years in all these cases to the Commission for Protection of Competition, Sofia Administrative Court and Supreme Administrative Court that law is still (in my impression at least) a science, and this science says that there is a Paris Convention on Industrial Property. This Convention was ratified in Bulgaria by Decree No. 633 of the Presidium of the National Assembly of 2.09.1965 - State Gazette No. 75 of 24.09.1965. 75 of 24.09.1965. So, it is a scientific fact since 1965 that Article 10bis of the Paris Convention on Industrial Property says that unfair competition is part of industrial property, considering in detail all its objects subject to imitation, as this identically was done in the hypothesis of Article 35, paragraph 1 and paragraph 2 of the Unfair competition act, without the hypothesis of paragraph 3, because in the 1950s domains did not yet exist.

In this context, I find what has been said to be a scientific fact and I hope that in the near future the Commission for Protection of Competition, Sofia Administrative Court and Supreme Administrative Court will read the Paris Convention on Industrial Property and stop putting us lawyers, who view intellectual property as science, in the unpleasant situation of claiming, that "unfair competition and industrial property have nothing in common" by reading mildly unlawful decisions on the subject, which on top of that continue to be cited with great pride as "constant practice" by the "great legal advisors" of the Commission for Protection of Competition, in these very same cases! 

In conclusion, I would say that the legal framework in Bulgaria at the moment is absolutely adequate to the European and international one, as long as someone reads it and looks into it's details professionally. I cannot hide my soul and say that there are also such magistrates whose professionalism I bow to. Recently, one of the judges at the CJEU awarded damages in a copyright case in the amount of 60 000 leva after I provided her with the above-mentioned case law of the CJEU and the lady magistrate in question correctly looked into the matter. I am aware that it is impossible for Bulgarian judges to be physically familiar with every area of law in detail, and perhaps in this context it would not be a bad idea to make it the practice of the court to provide materials from doctrine and case law for information, without this being seen as "training the court", but rather as assisting it to obtain adequate, detailed information.

It is also high time to amend the Trademark and geographical indications act and to introduce a text concerning the arbitration of disputes between trademarks and domains, which in my opinion should be carried out by the most prestigious arbitration court in Bulgaria - the one at the Bulgarian Chamber of Commerce and Industry and these disputes should be appealed again before the Bulgarian Supreme Court of Cassation, according to the logic of Article 47 of the International Commercial Arbitration Act. This will hopefully also lead to the closure of the illegal arbitration at the Bulgarian firm "Register. bg" Ltd., which has been "arbitrating" on the subject for years and despite repeated rulings of the Bulgarian Supreme Court of Cassation that this is not arbitration court at all and its decisions have the status of “legal nothing”. Despite all this commented strange structure of "Register. bg" Ltd. still "legally" takes away domains of Bulgarian citizens and legal entities, unknown on what legal basis, as no institution in Bulgaria has taken it upon itself so far to sanction the company in question and close this - let say it with a dose of irony - "legal arbitration"!