Category: Serbia

Amendments to the Law on Patents (the “Law”) entered into force on December 23, 2021, upon publication in the Official Gazette of RS no. 123/2021 as of December 15, 2021. The amendments were initially enacted for alignment of the Law with the EU regulations on intellectual property, as well as for elimination of certain deficiencies observed in its application.

Certificate on Additional Protection

The key novelty are provisions on certificate on additional protection.

According to the Law, each product protected by patent in the territory of the Republic of Serbia, whose trade as medicine for humans or animals or plant protection product is subject to licensing by a competent authority, under conditions stipulated by the Law, may be subject to the protection by certificate. The reason for this is the fact that these inventions cannot be commercially used until obtaining the required trading license, which significantly reduces the duration of protection implied by patent.

Within protection recognized by main patent, the protection recognized by certificate only refers to the product covered by trading license for relevant medicine for humans or animals, or plant protection product, as well as any use of product as medicine, i.e., plant protection product, the license wherefore was issued before the expiry of the certificate.

Having in mind that such solution, inter alia, prevents the preparatory activities for manufacturing or storage of medicine, i.e., product protected by certificate in the territory of Serbia, domestic manufacturers of such products (e.g., generic medicines) are thus put in an unfavorable position compared to the entities from countries where such protection does not exist.

These amendments therefore eliminate such imbalance and stipulate that exceptionally, i.e., under the conditions prescribed by the Law, preparatory activities for manufacturing and storage of products under the Article 113 paragraph 2. of the Law may be performed (active component or combination of active components of medicine, or active component from Article 2 paragraph 1. item 24) of the Law, or combination of active substances of plant protection products) or medicine product containing such product, only for the purpose of export and including appropriate mark on the outer product packaging.

The amendments have been made pursuant to the EU Regulation no. 2019/933 that entered into force on July 1, 2019 and which stipulates an exception from protection by certificate on additional protection if manufacturing or storage of medicines or medical products is done in the territory of EU for purpose of export.

The above stated provisions of the Law shall be applied starting from July 2, 2022, and they shall cease to be effective upon accession of the Republic of Serbia to the EU.

Changes in the Procedure of Patent Application

The law also introduced certain amendments regarding the submission of patent applications.

It is therefore stipulated that an application whose date of submission has been approved cannot be subsequently changed by extending the scope of the subject of protection. In relation thereto, it is envisaged that changes of the information included in the application can be done until the adoption of decision upon the patent application.

Before receipt of the search report, the patent applicant cannot change the description, patent requirements and draft application, and upon the receipt of the search report, the applicant can individually change them. The amended patent requirements cannot refer to the elements of patent application that no search report has been done for and which are not related to the invention or group of inventions that make a single invention idea that the initial protection was required for. Along with submitted changed parts of the patent application, the applicant also files the statement regarding the parts of application that have been modified and the parts of the initial patent application that represents a basis for the changes made. Otherwise, the competent authority may invite the applicant to submit such statement within one month after the day of receipt of invitation thereof.

Prohibition of Double Patenting

According to the Law, competent authority may only recognize one patent if two or more applications were made for one invention with the same approved date of application, i.e., priority date, by same applicants or their legal successors.

Amendments Regarding Petty Patent Protection

The Law extended the subject of protection of petty patents, for the purpose of creating a more favorable environment and stimulating innovation activities that would contribute to competition in the market and economic development.

It is stipulated that petty patent may protect a product and not only a solution referring to the construction of product or composition of its parts. Therefore, the products which are not characterized by construction solution, if they can be relevant in the market, will also be subject to the petty patent protection.

In addition, exceptions are also envisaged, i.e., inventions that cannot be protected by petty patent, which refer to inventions in the field of biotechnology, substances, medicines or substances and compositions contained in the state of technique applied in surgical or diagnostic procedure or medical treatment, plant varieties or animal breeds.

With regard to the procedure of petty patent research, it is prescribed that specific activities are undertaken in the procedure, and that the subject of invention stated in the application shall not be analyzed for novelty, invention level or industrial applicability.

This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.

By Lara Maksimovic, Senior Associate, and Andrea Arsic, Associate, PR Legal

Head of BDK Advokati’s Payment Services practice Dragoljub Sretenovic has been promoted to Partner.

According to BDK Advokati, Sretenovic, a former Counsel, has nine years of experience in banking and finance. He also works on “matters related to insurance, capital markets transactions, foreign exchange, electronic money issuance, and online payments.” Sretenovic has an LLB degree from Belgrade University and an LLM degree from the Institute for Law and Finance, Goethe University.

The same promotion round saw Jelena Zelenbaba, Djordje Zejak, and Marija Gligorevic promoted to Senior Associate.

“I am proud of my colleagues and thankful for the tangible contribution their dedication and expertise have made to the continuous success of BDK Advokati on what is a very competitive market of legal services,” Managing Partner Tijana Kojovic said of the appointments.

Pursuant to the Law on utilization of renewable energy sources (“Official gazette of the RS” no. 40/2021, “Law on RES”), Government of the Republic of Serbia has in November 2021 adopted two new regulations: i) the Regulation on Market Premium and Feed-In Tariff and ii) the Regulation on Market Premium Model Agreement.

Both regulations were published in the Official gazette of the RS no. 112/21. By adoption of these two regulations, as well as methodologies for RES and cogeneration and quotas for wind power plants, Republic of Serbia is finalizing the legal framework for conducting of auctions for granting of the RES incentives.

Regulation on Market Premium and Feed-In Tariff

This regulation regulates the procedure for acquiring of the right on the market premium. It  envisages that the market premium will be granted by way of  auctions conducted by the Commission for conduction of auction (“Commission”) that is to be established. The auctions will be held in the electronic form by using of the RES Portal, whereby the first auction may be organized in hard copy in case the RES Portal will not be ready for utilization at for  the first auction.

The Commission will comprise of   odd number of members, at minimum  five. Members of the Commission must not be in conflict  of interest, meaning that they must not be related with the participants on the auction in any manner. Commission is competent for selecting of the eligible participants for incentives through the auctions.

Ministry for Mining and Energy (“Ministry”) shall announce, on its website, the start of a planned auction at minimum  45 days, and maximum 90 days prior to the auction. After the expiry of this deadline, public invitation shall be published containing, among other, the deadline for the submission of applications, available quotas, maximum amount of incentives for which participants may bid, documents that must be submitted, financial security for seriousness of bid, conditions for eligibility for participation in auction etc. Participants must submit their applications through RES Portal (except in case first auction is organized in hard copy).

Financial security for seriousness of the bid must be submitted in form of either the bank guarantee or deposit of cash. In case the participants are bidding for the market premium, they are obliged to secure 30 EUR per kW of power plant capacity for which they bid for, and in the case of feed-in tariff, the amount is 10 EUR per kW.

All auction process shall be conducted over RES Portal. The Commission will first evaluate submitted   applications in order to determine which participants are eligible  to submit application. Following  this first phase, the Commission will  open the financial bids of qualified participants and determine the ranging list for granting of the incentives. Bids are ranked from lowest to highest. After the ranking, the  list will be published on RES Portal and sent to Ministry. Within 15 days as of the receipt of ranking list, Ministry renders the resolution on granting of market premium/feed-in tariff to the elected participants, or resolution on rejection to grant market premium/feed-in tariff.

Participants to which incentive is granted will obtain the status of temporary privileged producer on the date of the resolution on granting of the market premium/feed-in tariff. Such temporary privileged producer is obliged to submit request for entry into the agreement on market premium/feed-in tariff to the guaranteed supplier Elektrodistribucija Srbije (“EPS”), within 30 days deadline as of acquiring of such status.

Additionally, temporary privileged producer is obliged to deliver to the Ministry financial security instrument for obtaining of the status of privileged producer within 30 days as of the date of obtaining such status. The financial security may be in the form of either the bank guarantee or the cash deposit. In case of market premium, the temporary privileged producers are obliged to secure 60 EUR per kW of power plant capacity for which they acquired status of temporary privileged producer, and in case of feed-in tariff, amount is 30 EUR per kW.

One of the novelties is that the status of temporary privileged producer may be transferred to another entity by the execution of the transfer agreement. In this case, the entity to which this status will  be transferred is obliged to submit the request to the Ministry to transfer the resolution on granting market premium/feed-in tariff to the new  privileged producer.

Upon the fulfilment of all conditions for the acquiring of the status of privileged producer (obtaining license for energy activity, connection of power plant to the grid, obtaining usage permit etc.) temporary privileged producer is obliged to submit the request to the Ministry for the status of privileged producer.

Upon obtaining status of the privileged producer EPS is obliged pay market premium. However, it is envisaged that the market premium shall be paid as a difference between the granted market premium and the referent market price. EPS shall pay the market premium to the privileged producer only in case granted market premium is higher than the referent market price. If the referent market price is higher than the granted market premium, the privileged producer is obliged to pay the difference between these two amounts to the EPS. Referent market price is determined in line with the price for electric energy obtained per hour on day before organized electric energy market in the Republic of Serbia. Operator of organized electric energy market publishes  the referent prices on its website.

Finally, one of the novelties in obligations of the privileged producers is that they are obliged, throughout the whole validity of their agreement on market premium/feed-in tariff, to pay monthly cash deposit for the removal of the power plant and remediation of soil. After the expiry of the working life of the power plant, the privileged producer is obliged to remove the power plant and perform remediation of the soil. Upon this removal and remediation, the privileged producer may request for the cash deposit to be paid back. However, in case the privileged producer does not fulfill this obligation, it will lose forfeit the cash deposit and the funds will be used for the removal and remediation.

Regulation on Market Premium Model Agreement

The Second adopted regulation governs the mandatory content of the agreement on market premium that is to be entered into  between the temporary privileged producers and EPS. Contracting parties are not entitled to amend this model agreement without the expressed consent of the Ministry.

Agreement on market premium must  contain, inter alia,: i) the data on contracting parties, ii)the  rights and obligations of contractual parties, iii) the  subject of the agreement, iv) the  amount and data on market premium, v the ) data on possible payment to the EPS in case the referent price would be  higher than the granted market premium, vi) the type and capacity of the power plant, vii) the  incentive period and date of agreement execution, viii) the  reasons for termination, ix) the  manner of dispute resolution.

This regulation also stipulates mandatory elements of the agreement on market premium in case the lender of the RES project is authorized to request the transfer of the agreement of market premium from the privileged producer to any other entity.

By Nikola Djordjevic, Partner, and Marko Mrdja, Senior Associate, JPM Jankovic Popovic Mitic

The end of 2021 has marked adoption of the new Law on Capital Market (the “Law”) in Serbia, which was published on 28 December 2021. The Law was adopted in line with the recently enacted Strategy for Development of the Capital Market for the period 2021-2026 and within a wider process of accession of Serbia to the EU.

The aim of the Law is to further harmonize local legal and institutional framework with the EU rules and to have stimulative effect on the market and market participants, The main specific aims include regaining of investors’ trust and their interest to invest, increased transparency, enhanced security of financial market, which all should contribute to development of the capital market and provide additional sources of financing for companies in Serbia.

The Law brings a completely new comprehensive set of rules in line with the relevant EU regulations governing markets in financial instruments (MiFID I and MiFID II), prospectus, investor-compensation schemes, transparency, securities settlement and market abuse. In relation to the current Law on Capital Market, which was adopted in 2011 and was partially aligned with the EU acqui at that time, the Law introduces new rules concerning: (i) dematerialized securities and operations of entities authorized to perform transactions with financial instruments, (ii) conditions and forms of organized trading with financial instruments, (iii) a new institution of data reporting services provider, (iv) improvement of the quality of the information received by clients regarding investment services, (v) greater regulatory requirements especially with regard to new trading platforms and high-frequency and algorithmic trading, (vi) the obligations of participants in the capital market regarding market abuses and (vii) the wider supervisory obligations and sanction powers of the Securities Commission.

The Law enters into force on 5 January 2022, but will start to apply with a one year delay i.e. from 6 January 2023. At that moment the old Law on Capital Market will cease to apply.

Broker-dealer companies and credit institutions that have received an operating license from the Securities Commission until the day this law enters into force are obliged to harmonize their operations and acts with the provisions of the Law, within one year from the date of entry into force.

On an institutional level, the Law determines that the Securities Commission is obliged to adjust its organization in accordance with this Law and to adopt regulations for its implementation within six months from the date of entry into force of this Law, while the Deposit Insurance Agency which organizes and manages the Investor Protection Fond, the Central Securities Depository, and Clearing House, and the Belgrade Stock Exchange are obliged to organize and harmonize its acts with the provisions of this Law, within nine months from the date of entry into force.

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

By Maja Jovancevic Setka, Partner, independent Attorney at Law in cooperation with Karanovic & Partners, and Velimir Perovic, Junior Associate, Karanovic & Partners

NKO Partners has advised CTP on its acquisition of 5 hectares of land in Kragujevac from Forma Ideale intended for the expansion of CTPark Kragujevac, a logistics park occupied by Yanfeng Automotive Interiors.

CTP is a developer and manager of customized industrial and logistics parks. Forma Ideale is a furniture producer. Yanfeng is an automotive supplier focusing on interior, exterior, seating, cockpit electronics, and passive safety.

NKO has previously advised CTP on another land acquisition in Kragujevac, in 2020 (as reported by CEE Legal Matters on May 27, 2020). 

NKO’s team was led by Partner Djordje Nikolic and Senior Associate Luka Aleksic.

On December 17, 2021, amendments to the Customs Law published in the Official Gazette of RS no. 118/2021 as of December 9, 2021 (the “Law”) entered into force. Outlined below is an overview of the key novelties, that were notably enacted for alignment with the changes introduced in the EU customs regulations.

Deciding Upon Requests Regarding the Protection of Intellectual Property Rights

Instead of previously prescribed deadline of 120 days, competent customs authority shall pass a decision referring to the protection of intellectual property rights in accordance with the provisions of the law on general administrative procedure, which also applies to the adoption of other decisions concerning the application of customs regulations. As a reminder, the Law on General Administrative Procedure stipulates that, when a procedure was instituted upon request of a party or ex officio in the interest of the party, and when an administrative matter is being resolved by direct deciding, the authority shall pass a decision no later than 30 days after the institution of the procedure; when a procedure was instituted upon request of a party or ex officio in the interest of the party, but the administrative matter is not being resolved by direct deciding, the authority shall issue the decision no later than 60 days after the institution of the procedure.

Exceptionally, the deadline of 120 days from the day of acceptance of the request shall apply to passing of the decisions that refer to mandatory notification on classification of goods or mandatory notification on the origin of goods, as well as approval of the status of authorized economic entity or approval of simplification.

Redemption of Customs Debt

According to the Law, customs debt upon import or export is, inter alia, subject to redemption if the omission that caused the debt concerned did not have significant impact on proper implementation of temporary storage or a particular customs procedure and did not represent an attempted fraud.

Exemption from Payment of Import Duties

The Law prescribes a complete exemption from payment of import duties, which is approved for processed products obtained from goods put in the procedure of outward processing, if it is established, in a manner acceptable for the customs authority:

• that the goods were improved or modified in a country or customs territory outside the customs territory of the Republic of Serbia, provided that the Republic of Serbia has concluded an international agreement that specifies such exemption with the said country/territory; and
• that the conditions were met for exemption from payment of import duties as stipulated in the above said agreement.

The aforesaid provision does not apply to the processed goods that were obtained from equivalent goods under Article 193 of the Law (domestic goods stored, used or processed instead of the goods put in a special procedure, and in the procedure of outward processing foreign goods processed instead of domestic goods put in outward processing procedure) and products for replacement under Articles 225 and 226 of the Law (product obtained in a system of standard replacement that may be replaced by imported product and products for replacement that were approved for import before the goods with defects was exported).

Amendments about Customs Declaration

The Law also specifies situations where submitted summary import declaration is cancelled if goods subject to such declaration were not imported into the customs territory of the Republic of Serbia (after the expiry of 200 days after the declaration submission), whereby it also specifies which data need to be included in the customs or temporary storage declaration filed instead of summary import declaration (at least the data required for the summary import declaration). In addition, the Law specifies the situations where the submitted declaration for temporary storage is cancelled in case goods subject to such declaration were not delivered to the customs office (upon expiry of 30 days after the submission of declaration).

Other Amendments

In addition to the above novelties, the Law prescribes that the Government shall, inter alia, determine the authority responsible for issuance of documents that prove the origin, as well as other documents and certificates accompanying the goods upon their import or export.

Additionally, the Law specifies in which cases decisions referring to mandatory notifications on classification of goods or origin of goods may be used even after their expiry (with regard to mandatory agreements based thereupon, which were concluded before the stated mandatory notification were put out of force; however the extended application concerned may not apply to mandatory notification on origin enacted for goods that are yet to be exported).

The Law also introduced certain technical modifications, i.e., regarding terminological specification of certain notions.

This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.

By Lara Maksimovic, Senior Associate, PR Legal

On November 3, 2021, CEE Legal Matters reported that Karanovic & Partners had advised ElevenEs on partnering with EIT InnoEnergy to build a lithium iron phosphate (LFP) battery factory in Subotica, Serbia. CEE In-House Matters spoke with Nemanja Mikac, CEO at ElevenEs, to learn more about the matter.

CEEIHM: To start, tell us about the Al Pack Group and ElevenEs.

Mikac: ElevenEs is an industrial spin-off of the multinational Al Pack Group, which produces more than 40 million square meters of processed aluminum foils every year and has been operating on the packaging market for more than 25 years. The Al Pack Group uses processes similar to electrode manufacturing, which is a key process in battery production. ElevenEs has an advanced research and development center that has been operating since June 2021 in Subotica, Serbia, on the premises of its parent company. It employs an international team of engineers and scientists.

CEEIHM: What about the partnership with EIT InnoEnergy to build a lithium iron phosphate battery factory in Subotica, Serbia – how did this partnership come to be?

Mikac: We are very proud that EIT InnoEnergy chose to support us at the beginning of this huge and exciting journey. We have been working together for the past last year and a half so they became quite familiar with how easily we can transfer our know-how in the aluminum packaging industry to cell production. As you already know, LFP batteries are the next big thing in this field of industry. By 2023, the ElevenEs plant will be able to produce LFP cells with a total estimated annual capacity of 300 megawatt hours. The construction of the 100% renewable energy-powered 8 t plant in Subotica (Serbia) will start in 2024. It will later be expanded to a capacity of 16 Gigawatt hours – enough to equip more than 300,000 electric vehicles (BEVs) with batteries each year.

CEEIHM: And what does the partnership entail precisely?

Mikac: The most important thing from this partnership is that someone recognized our project as important, not just locally, but on the European scale. This gives us real support, recognition that we are moving in the right direction, and a motivation boost to continue. From a technical point of view, this support opens many doors and will help us to make connections throughout the entire supply chain, but also through the complete downstream, which includes contacts with large OEMs.

On the financial side, we now have the credibility to approach a wide range of funds, investors, and financial organizations. The authority that InnoEnergy will, in negotiations with them, give a good reference, and guarantee that the entire project and investment is sustainable in the long run.

CEEIHM: What were the most complex aspects of the agreement from your perspective?

Mikac: Coordinating our start-up thinking with the need to stay within project boundaries. When leading a start-up sometimes you have a need to react fast and seize an opportunity, no matter if it is not defined by the project. That can be some research direction or an amazing hire that was not predicted by the budget. Sometimes you will pivot around some concept to increase productivity or performance while sacrificing something else. I have to say that InnoEnergy is an amazing partner on that and we find a lot of deep understanding of both industry and start-up process from them.  

CEEIHM: Why did you turn to Karanovic & Partners for advice on this matter?

Mikac: When you are trying to build an amazing enterprise, you have to work with partners that will enable your vision and empower your quest. Not just regarding one subject but as a crucial guiding principle.  

When it comes to corporate and commercial law, Karanovic & Partners is one of the leading companies in the region. For us, it was very important to have a world-class partner, who has expertise in different areas. So when we need high-level negotiating (e.g. term sheets), tax, employment, or intellectual property support, in Karanovic we have found a great and safe partner. Also, personal experiences from the past gave us much-needed confidence to choose them.

Originally reported by CEE In-House Matters.

Zivkovic Samardzic has advised Serbian Bookers on its partnership with OTA Sync.

Serbian Bookers is a software company offering web and mobile solutions for hotels and private accommodation. Estonia’s OTA Sync is a full cloud-based hotel and property management system with an integrated channel manager and booking engine system.

According to Zivkovic Samardzic, “the aim of this restructuring is to expand the opportunity for global expansion and access to investment opportunities. With this evolving into a global brand OTA Sync – Online Travel Agencies Synchronization – it will continue to expand and develop globally, while its team will remain local. Currently, the system is used by users from 14 countries, and the team continues to work on new functions, modernization of the system, and the success of its clients. The introduction of new functions will further facilitate the business of users and will help them to analyze their strategy in more detail and improve communication with guests.”

The Zivkovic Samardzic team was led by Partner Igor Zivkovski.

Ljubinka Pljevaljcic has been promoted to Partner at Doklestic, Repic & Gajin.

Pljevaljcic has been with DRG for over six years. According to DRG, “her practice encompasses all aspects of employment law in Serbia, Montenegro, and Bosnia and Herzegovina, including unfair dismissals, bonuses, and discrimination. She also has experience of outsourcings, company restructures and redundancies, transfer of employees and trade union relationships, and collective negotiations.”

Pljevaljcic, who holds LLB and LLM degrees from the University of Belgrade’s Faculty of Law, has also spent a year in-house with Raiffeisen Bank Serbia and a year as a Legal Advisor with the Serbian Ministry of Finance, before joining DRG.

As part of the same promotion round, Dusica Dukanac became a Managing Associate and Aleksandra Stojanovic became a Senior Associate.

“We are all incredibly proud of Ljubinka, Aleksandra and Dusica,” said DRG Managing Partner Slobodan Doklestic. “Their talent and commitment are valued by clients, and they showcase the firm’s team spirit. Their promotions are well deserved.”

NKO Partners has advised the Dr. Max Group on its acquisition of Serbian pharmacy chain Zlatni Lav. Bojovic Draskovic Popovic & Partners advised the seller.

According to NKO, following the acquisition, Dr. Max operates more than 180 pharmacies in Serbia. Dr. Max is a pharmacy chain operating in Central and Eastern Europe. The company has over 2,200 pharmacies in six countries, including the Czech Republic, Slovakia, Poland, Romania, Serbia, and Italy.

The NKO team was led by Partner Djordje Nikolic and Senior Associate Branko Jankovic.

The BD2P team was led by Partner Uros Popovic and Senior Associate Stefan Golubovic.