Category: Serbia

ZSP Advokati has promoted Jasna Milosavljevic, Jelisaveta Stanisic, and Nikola Sugaris to Partners.

Milosavljevic became a Partner in the Real Estate & Projects department of ZSP. She has been with the firm since 2017 when she joined as an Attorney at Law. Earlier, she spent almost nine years with Karanovic & Partners and, earlier still, over four years with Schoenherr.

Stanisic joined ZSP in 2015 as an Attorney at Law. According to ZSP, her primary area of focus is banking & finance.

Sugaris specializes in corporate and M&A. He has been with ZSP since 2016 when he joined as an Associate. He became an Attorney at Law in 2019. 

“We are pleased to welcome these distinguished attorneys to our partnership,” commented Managing Partner Stojan Semiz. “Each new partner has demonstrated exceptional dedication to their practice areas, a strong commitment to providing excellent service to our clients, and a clear alignment with our firm’s values and culture. Their promotion to partnership reflects their hard work, expertise, and the high standards they uphold, which are vital to our firm’s continued success and growth.”

Moravcevic, Vojnovic and Partners in cooperation with Schoenherr has advised Fortis Renewable Energy on the acquisition of a 180-megawatt solar power plant in Sremska Mitrovica, Serbia.

Fortis Renewable Energy specializes in renewable energy investments, including solar, wind, biogas, geothermal, and other sources in the Balkans, Turkey, and the Netherlands.

The Schoenherr team included Partner Milos Lakovic, Attorney at Law Dragan Martin, and Associates Vukasin Stankovic and Jovan Crvenica.

Schoenherr did not respond to our inquiry on the matter.

MMD Advokati has advised APS Quattro Holding on the sale of Vantage Leasing to Alta Banka. Stanivuk & Manasijevski advised Alta Banka.

According to MMD Advokati, “the entire process between the start of negotiations until closing lasted one year, given that leasing is a heavily regulated industry under the scrutiny of the National Bank of Serbia and the new buyer needed to obtain regulatory approvals and clearances from the National Bank of Serbia as well as from the Serbian Competition Office.”

APS Quattro Holding is a Luxembourg financial holding.

The MMD team included Partners Veljko Dostanic and Rastko Malisic.

The Stanivuk & Manasijevski team included Partner Bojan Stanivuk and Senior Associate Kristina Zejak.

BDK Advokati has advised Seyfor on the acquisition of 70% equity in the Serbian IT company M&I Systems. Stanivukovic reportedly advised the sellers.

Seyfor is a software company in Central Europe. It’s part of Sandberg Capital, a Slovak private equity firm focused on investing in smaller and middle-sized companies with growth potential.

M&I Systems operates in software solutions development, digital transformation, and IT consulting.

The BDK Advokati team included Senior Partner Vladimir Dasic, Attorney at Law Nikolina Bajic, Senior Associate Marija Gligorevic, Associate Milos Kaplanovic, and Junior Associate Petar Eric.

Serbia’s 2020 Trademark Law introduced a novel provision to local law: the trademark holders have been explicitly empowered to claim profit surrender in cases where the infringement was not intentional or grossly negligent.

Specifically, the Law stipulates:  If the violation of rights was not committed intentionally or through gross negligence, the court may award the plaintiff compensation in the amount of the profit that the defendant gained through the violation of rights. This provision not only limits the liability of defendants in such cases, but also significantly eases the burden of proof for a trademark holder seeking to be awarded for trademark infringement.

In one of the first court rulings relying on this legal ground and this specific provision, the court awarded the trademark holder with over EUR 1.2 million profit calculated from the sale of products bearing the disputed mark. The legal battle in the first instance focused on several contentious and complex legal issues:

• Does the trademark holder have to prove that they suffered damage to claim profit surrender?
• Does the trademark holder have to prove the contribution of the use of the trademark to the profit obtained?
• Can trademark holders seek profit surrender for infringements that had occurred before enactment of the novel of the Trademark Law in 2020?

The first instance ruling answers these questions, allowing straightforward monetary award based on the established trademark infringement without the trademark holder having to prove additional facts. It remains to be seen whether higher court instances will uphold this interpretation, which would significantly enhance the position of rights holders and improve the efficiency of the existing protection system.

This landmark case not only underscores the importance of robust legal representation but also highlights the evolving landscape of intellectual property rights in Serbia. Whether you’re an IP enthusiast or a stakeholder in the industry, this decision is a game-changer worth noting. Stay tuned to see how this story unfolds in the higher courts!

* ZMP represents the plaintiff in this court dispute. All standpoints and insights referenced in this article represent personal opinions and professional views of the author.

This text is for informational purposes only and should not be considered as legal advice. Should you require any additional information, feel free to contact us.

By Mina Jovanovic Ninkovic, Senior Counsel, ZMP

On 14 June 2024, the Serbian Competition Commission (the “Commission”) initiated two proceedings against companies belonging to the Agromarket Group for allegedly implementing notifiable concentrations without obtaining prior approval from the Commission. The acquisitions occurred in 2020 and 2024 and both concern targets located outside of Serbia.

The first gun-jumping investigation involves the acquisition of a Slovenian hotel by a Serbian subsidiary of Agromarket Group in May 2024. This acquisition likely caught the Commission’s attention due to substantial media coverage in Serbia. Furthermore, the transaction was notified to the Slovenian competition authority, which published its decision on the concentration on its website in December 2023. The Commission bolstered its case by reviewing records from the Slovenian Business Register and Slovenian Cadaster Office, which documented the change of ownership of the hotel from the previous owner to Agromarket.

The second investigation targets Villager Ljubljana, a Slovenian subsidiary of Agromarket Group, for its acquisition of the Slovenian company Semenarna Ljubljana in 2020. Arguably the Commission discovered this acquisition while preparing the first case related to the hotel acquisition. The Commission concluded that Villager Ljubljana implemented an allegedly notifiable concentration without obtaining prior approval, based on publicly available information from the Slovenian Business Register and Agromarket’s website.

Further investigation into financial statements published on the Serbian Business Register Agency’s website revealed that the Agromarket Group has exceeded the legally prescribed merger filing thresholds. Consequently, the Commission alleges that there was a mandatory merger filing obligation for both acquisitions.

The Serbian Competition Law provides that the fine for gun-jumping can be up to 10% of the turnover of the acquirers group generated in Serbia in the year preceding the initiation of proceedings.

These two investigations are not the first instances where the Commission scrutinized the acquisition of a target not located in Serbia. In October 2022, the Commission initiated a gun-jumping investigation against a Serbian e-commerce platform concerning the acquisition of a company registered in North Macedonia. The decision of the Commission is pending.

As a result, it appears that these latest investigations may reflect a continuation of the Serbian Commission’s practice of monitoring and analyzing concentrations in neighboring countries when the Serbian merger filing thresholds are met.

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.

By Bojana Miljanovic Hussey and Bojan Vuckovic, Partners, and Sanja Dedovic, Associate, Karanovic & Partners

SOG in cooperation with Kinstellar has advised Strickland Metals on its acquisition of Zlatna Reka Resources Beograd-Vracar. MPartners Legal reportedly advised the sellers.

Strickland Metals is an ASX-listed mineral exploration company from Australia.

Zlatna Reka Resources, whose sole shareholder is Betoota Holdings, is ultimately owned by Ibaera Capital Fund, a private equity group with its seat in the Cayman Islands and offices in Australia.

According to SOG, “this acquisition marks a significant development in Serbia’s burgeoning mining industry, as the project holds an impressive 5.4 million ounce gold resource.”

The SOG team included Senior Associates Sara Ostojic and Mario Kijanovic and Associate Vuk Vuckovic.

Amidst the adoption of the Artificial Intelligence Act by the European Union Council, as the world’s first legislation setting a global standard for regulating artificial intelligence (“AI“), we are entering into the still unregulated territory of the relationship between patent law and AI.

Patents are a significant source of new technical information and inspiration for future generations of researchers and inventors. To protect an invention with a patent, a solution to a specific problem can come from any technical field.

A patent is an absolute property right granted for an invention that:

• is novel – identical solutions have not been made available to the public;
• involves an inventive level – the invention is not obvious compared to known solutions;
• is industrially applicable – it can be produced or used in any branch of industry.

Machine and/or Human as Patent Creator 

Firstly, how do we define AI? AI represents technology that:

• demonstrates reasonable and intelligent behavior based on the analysis of its environment;
• makes decisions with a certain degree of autonomy to achieve specific goals.

The emergence of AI has raised new questions and challenges for patent frameworks to adapt to AI technologies. For the first time, computer technology is not merely aiding in the creation of inventions, machines can generate new and inventive solutions even without human intervention. This raises the question: can an AI system be considered an inventor, or must an inventor always be a natural person?

Moreover, innovations in AI involve collaboration in projects and joint work by multiple inventors. In the modern IT era, individual inventors are becoming obsolete as innovations arise from collaboration among multidisciplinary teams of experts. This situation raises questions about who will be credited as the inventor if, despite the involvement of an entire team, a machine creates the invention, and how compensation will be determined for team members whose data contributed to the development of the innovation.

Currently, from the perspective of Serbian patent law, the operational technology of AI systems based on computer programs is not relevant to patent law, nor are computer programs the subject of inventions under the Patent Law.

There are many obstacles to overcome before AI can be safely integrated into patent law:

• confidentiality of client data;
• reliability on AI without human verification;
• ethical issues regarding the use of AI that are not covered by the obligation of lawyers for competent representation;
• patenting success due to future changes in patent laws.

These risks associated with AI systems should be addressed by AI companies themselves before attempting to comply with patent law rules.

Guidelines

In February 2024, the United States Patent and Trademark Office (“USPTO”) released new guidelines on inventorship analysis for AI-assisted inventions. While an AI system cannot be listed as an inventor in a patent application, the USPTO guidelines state that the use of AI by a natural person in the patenting process does not preclude the possibility of obtaining a patent “if the natural person significantly contributed to the conception of the invention.”

The USPTO guidelines also establish five (5) guiding principles to determine when AI-assisted inventions can be patented:

1. Human contribution: using an AI system to create an invention does not exclude a person from qualifying as an inventor. A person may be named as an inventor if they significantly contribute to the creation of the invention.
2. Conception/identification of the problem: merely identifying the problem or setting a research goal is not sufficient for someone to be considered an inventor. If a person only identifies a problem for which AI is to find a solution, that person does not need to be an inventor. However, if a person creates detailed instructions guiding AI to a specific solution, the person’s contribution may be significant enough to be considered an invention.
3. Practice implementation: mere construction or demonstration of the invention is not sufficient to recognize a person as an inventor. Also, identifying an AI solution as an invention is not sufficient. However, if a person takes an AI solution and significantly enhances or modifies it, they may be considered the inventor of that enhancement or modification. Additionally, successful experiments with an AI solution can sometimes demonstrate significant contribution.
4. Key contributions: a person who develops a key element on which the invention is based may be considered an inventor, even if they were not involved in every step. For example, designing or training an AI system to solve a specific problem can be a significant contribution if it leads to an invention later on. This does not mean that the programmer of a generative AI system will be considered the inventor of inventions created by a trained AI system. This principle applies only if the system is designed or trained for the purpose of solving a specific problem.
5. Intellectual dominance: mere ownership or control of an AI system does not make someone an inventor. Ownership or control of an AI system is not enough without significant contribution to the creation of the invention.

The USPTO guidelines on AI-assisted inventions clearly indicate that inventions lacking a human “co-inventor” do not qualify for patent protection. This decision highlights a significant limitation: valuable and potentially revolutionary inventions created solely by AI systems, without significant human contribution, cannot be patented. This creates a gap where innovative results of AI may remain outside the realm of patent protection, potentially discouraging certain types of research and development driven by AI technologies.

These guidelines have introduced a new requirement for inventors and innovative companies to document human involvement in the invention process whenever AI systems are used. This includes maintaining records demonstrating how humans contributed to the conception of the invention, rather than just executing or identifying outputs generated by AI systems. Such documentation may include meeting notes, design and development documents, instructions, and descriptions of the entire problem-solving process. In future legal disputes, this documentation may be crucial as it provides tangible evidence of human inventiveness and intervention, which are key criteria for the possibility of obtaining a patent. By clearly delineating human contributions, inventors can proactively address potential challenges regarding their invention claims, ensuring that their patent applications comply with the requirements of these new guidelines.

In any case, these guidelines are not mandatory or legally binding, neither in the United States nor elsewhere in the world, but rapid technological developments will certainly accelerate the process of reconciling patent systems with the use of AI technologies.

Practice

In practice, the European Patent Office (“EPO”) in 2018 dismissed two patent applications filed by Dr. Stephen Thaler to patent a machine solution called “DABUS” (Device for the Autonomous Bootstrapping of Unified Sentience) as formally irregular because the inventor designated was a machine and not a natural person. The EPO stated that an inventor must be a natural person, as machines lack legal personality, rights, or the ability to convey rights they do not possess. The UK Intellectual Property Office and the USPTO share the same opinion.

Dr. Thaler did not give up, he applied in various variations and in different countries. In most countries, he received negative responses, and some requests are still pending decisions. Finally, in Germany, he submitted three different requests:

• grant a patent without naming an inventor;
• include a paragraph in the description explaining that DABUS created the invention;
• name the inventor as “Stephen L. Thaler, PhD, who instructed AI DABUS to create the invention.”

The last request was approved by the Senate of the Federal Patent Court of Germany, stating that the role of AI in creating an invention may or may not be mentioned, but in any case, a natural person must be named as the inventor. The matter is pending in appeal proceedings, after which a more precise clarification of the stance is expected.

So, why is it important who the inventor is? The answer is ownership. In most legal systems, a patent can only be granted to the inventor (i.e. the person or persons responsible for the “inventive concept”) or to someone acquiring rights from the inventor. For example, this could be the case due to assignment of rights by contract, invention developed during employment, or as a legal representative of a deceased inventor. Since the role of patents is to encourage innovation, it is important to ensure clarity about who will have the right to the patent resulting from inventive activities.

Who can own the patent when the invention is created with the assistance of an AI system? The following are the primary candidates:

• AI system programmer;
• AI system owner;
• authorized user of the AI system.

Neither international law nor the European Patent Convention has provided clear rules on how ownership of the patent will be viewed if AI is involved in inventive activities. Therefore, this decision is left to national legislations.

For example, China has introduced that in the case of an invention involving an AI system, the provisions of the law governing ownership of inventions developed in employment apply, in that sense patent rights belong to the owner of the AI system.

Conclusion

Navigating the complex landscape of patent creation involving AI technologies requires addressing multi-layered challenges in terms of security, reliability, ethics, and compliance, as well as keeping abreast of regulatory changes. The imperative to protect confidentiality and find appropriate legal solutions for patenting AI inventions demands robust security measures, while integrating human oversight becomes crucial to ensuring reliability and accuracy.

Ethical considerations and compliance with regulatory developments underscore the need for responsible AI operational practices. With the advancement of legal-technological sectors, a strategic and collaborative approach is crucial, coupled with a commitment to monitoring regulatory changes and promoting ethical application of AI in the domain of patent law. The path to harmonious collaboration between legal experts and AI requires nuanced understanding of all the challenges mentioned and a proactive approach to innovations within established ethical and legal boundaries.

This article is purely informative and does not constitute legal advice. If you need further information, feel free to contact us.

By Predrag Pavlicic, Senior Associate, PR Legal

In this article, we address a common question in practice – under which conditions can an employer use video surveillance footage in disciplinary proceedings against an employee?

In this regard, we analyze the following example from European practice, which provides some answers.

Namely, the Luxembourg Data Protection Commission (CNPD – Commission Nationale pour la Protection des Données) (“Commission”), as an independent body responsible for overseeing the application of data protection regulations in Luxembourg, issued Decision No. 2FR/2024 (“Decision”) on May 21, 2024.

In the Decision, the Commission took the position that the use of video surveillance footage for the purpose of conducting a termination procedure of an employment contract violates the principle of purpose limitation if the video surveillance was originally established solely for the purpose of ensuring the safety of employees.

Facts of the Case 

The employer established a video surveillance system, which the Commission approved.

Subsequently, the Commission received a complaint from an employee regarding the data controller’s use of video surveillance footage to determine the factual circumstances of a violation of work rules or conduct by the employee, and on this basis, terminated the employment contract.

Upon investigating the complaint, the Commission found that the video surveillance system was established to ensure the safety of employees and users of the employer’s infrastructure.

In this case, the employer argued that, in order to comply with Luxembourg labor law and the lawful conduct of the termination procedure, which requires precise details of the circumstances of the disciplinary offense attributed to the employee, it was necessary to use the video surveillance footage, regardless of data protection laws.

Relevant Provisions

The Decision is based on the following provisions of the General Data Protection Regulation of the European Union (“GDPR”):

• Article 5(1)(a), which states that personal data must be processed lawfully, fairly, and transparently in relation to the data subject (“principle of lawfulness, fairness, and transparency”);
• Article 5(1)(b), which states that data must be collected for specified, explicit, and legitimate purposes and not further processed in a manner that is incompatible with those purposes (“principle of purpose limitation”);
• Article 5(2), which states that the controller is responsible for and must be able to demonstrate compliance with paragraph 1 (“principle of accountability”);
• Article 6(4), which states that if processing for a purpose other than that for which the personal data were collected is not based on the data subject’s consent or on Union or Member State law that constitutes a necessary and proportionate measure in a democratic society to safeguard the objectives referred to in Article 23(1) GDPR, the controller must, in order to ascertain whether processing for another purpose is compatible with the purpose for which the personal data were initially collected, take into account, among other things: (a) any link between the purposes for which the data were collected and the purposes of the intended further processing; (b) the context in which the data were collected; (c) the nature of the personal data; (d) the possible consequences of the intended further processing for data subjects; (e) the existence of appropriate safeguards;
• Article 13(1)(c), which states that the controller must provide the data subject with all information about the purpose of processing and the legal basis for processing at the time of collection.

Furthermore, the Decision is based on the Guidelines of the European Data Protection Board (European Data Protection Board), which emphasize the importance of defining the purpose of processing, subsequent use of data for other purposes, clear establishment of the legal basis for processing, prior notification to the data subjects, and accountability for processing.

Commission’s Decision

Referring to the aforementioned provisions, the Commission took the position that before using video surveillance footage, the purposes of the surveillance or data processing must be initially detailed in writing, and if processing occurs for other purposes than the original, the controller must first ensure that such processing has purposes compatible with the original purposes, in accordance with the GDPR and the mentioned guidelines, and that the data subjects must be provided with information.

Considering the above, the Commission determined that the purpose of the video surveillance system in this case was to ensure a certain level of safety for employees and users of the employer’s infrastructure, and that the collected personal data were processed for another purpose, for conducting disciplinary proceedings against the employee and terminating the employment contract.

The Commission further determined that the employer in this case could process the data collected through the video surveillance system for the purpose of conducting disciplinary proceedings against the employee only if the processing was based on the employee’s consent or if the further processing was compatible with the originally established purposes, in accordance with the above provisions, which, according to the Commission, considering the provisions of the GDPR and the mentioned guidelines, was not the case here. 

For the aforementioned reasons, the Commission issued a warning to the employer for violating the aforementioned provisions.

Conclusion 

Domestic regulations address this issue in the same way, and additionally, the supervisory body of the Republic of Serbia (Commissioner for Information of Public Importance and Personal Data Protection) has taken similar positions on this matter in the past.

Therefore, all purposes related to the application of video surveillance must be previously regulated in writing, in the employer’s internal acts, in accordance with applicable regulations, and that any further use of this data must be carried out in accordance with these acts.

This article is for informational purposes only and does not constitute legal advice. If you need further information, please feel free to contact us.

By Borinka Dobrnjac, Senior Associate, PR Legal 

Harrisons has advised EBRD on three financing facilities with Banca Intesa Beograd totaling EUR 72 million.

According to Harrisons, the facilities include “a new risk-sharing framework of up to EUR 50 million; a EUR 15 million loan under the SME Go Green program co-funded by the European Union; and a senior loan of up to EUR 7 million under the Western Balkans Women in Business program.”

Furthermore, Harrisons reports that “Banca Intesa became the first Serbian bank to benefit from a new risk-sharing framework which is designed to allow the EBRD to share partner banks’ exposure to local large or small and medium-sized enterprises through unfunded risk participation. The EUR 15 million loan signed under SME Go Green will be used to provide sub-loans to eligible small and medium enterprises in Serbia.” Additionally, the firm reports that “the senior loan of up to EUR 7 million is for on-lending to eligible women-led SMEs in line with the criteria under the second phase of the Western Balkans Women in Business program.”

The Harrisons team included Principal Mark Harrison, Consultant Ines Matijevic-Papulin, and Associate Mina Zeljkovic.