International Patent Litigation in Bulgaria

Both the patent owner and the holder of an exclusive licence are entitled to file a claim against a patent infringer (unless otherwise agreed).

When the patent is owned by multiple parties, each  co-owner is entitled to commence patent infringement proceedings independently.

The applicant for a patent is also entitled to file a claim following publication of the application in the Official Journal of the Bulgarian Patent Office (the “BPO”); however, the case will be reviewed only after and if  the patent is granted.

Both the holders of a licence granted by operation of law and the holders of a compulsory licence are entitled to bring patent infringement proceedings, if the patent owner fails to submit a patent infringement claim within six months from the date that the patent owner was requested in writing to do so by the licensee.

Each licensee (exclusive or non-exclusive) is entitled to join the patent infringement proceedings when the claim has been brought by the patent owner. Likewise, the patent owner is entitled to join the proceedings initiated by the holder of an exclusive license, a licence granted by operation of law or a compulsory licence.

Yes. The claimant may file a combined claim against several defendants if the claim is based on the same grounds.

Yes. Third parties may join the court proceedings to support either the claimant or the defendant if the judgment of the court, when handed down, would benefit the third party. Third parties can only be joined to proceedings before the court of first instance and must be joined before the gathering of evidence has been concluded.

Yes. Patent infringements must be brought within five years from the date of infringement or from the date the patent owner / licensee became aware of the infringer’s identity. If the infringement is ongoing, the limitation period starts from the date the infringing activity ceases.

No. Each infringed patent may be the subject of a separate patent infringement claim.

Depending on their nature, disputes regarding the creation, protection and use of patents are resolved in either an administrative procedure or the courts or an arbitration procedure.

Administrative procedure

The BPO disputes resolution unit examines requests for declarations of invalidity of patents, granting and termination of compulsory licences, as well as appeals against decisions for refusal to grant a patent and appeals against decisions for termination of proceedings on patent applications.

Within the disputes resolution unit, disputes are heard by specialised dispute panels appointed by the chairperson of the BPO on a case-by-case basis and composed of officers from the dispute resolution unit within the BPO. Disputes regarding the declaration of invalidity of a patent are heard by a five-member panel which includes two legal experts.

Civil Court Procedure

The Sofia City Court hears disputes on infringement (and other matters such as ownership including in an employment relationship and disputes over royalties for a compulsory licence; disputes based on the industrial introduction of patented inventions).

As noted above, infringement and validity disputes are not decided in the same proceedings. Validity disputes are reviewed under the administrative procedure at the dispute resolution unit within the BPO. Patent infringement disputes are heard, at first instance, by the Sofia City Court. In the event that the defendant to an infringement action before the court has filed a request for declaration of invalidity of the patent or has filed before the European Patent Office or before the Unified Patent Court an opposition against the European patent, the civil court shall suspend the case until the final decision on the request is pronounced. The BPO shall render a decision within one year of the date of notification of the suspension of court proceedings.

Yes. The Bulgarian Parliament ratified the Unified Patent Court Agreement (in April 2016) and the Protocol for Provisional Application of the Unified Patent Court Agreement (in June 2018).

Under the common civil procedure rules, claims for declaration of existence or non-existence of facts can be brought before the courts only in the cases provided for by law. There is no legal provision allowing claims for declaration of non-infringement of patents. Availability of declaratory proceedings is provided for: establishment of the infringement; identifying the genuine inventor; the creation of an invention within employment or other relationship; existence of the right to apply for a patent; the prior use or the post patent termination use of an invention; the fact of industrial application of an invention.

However, claims for existence or non-existence of a legal relation, or of a right, can be brought before the courts. Note that such claims, although admissible, are very hard to obtain in practice as the party seeking the declaration of existence (non-existence) must prove they have a legal interest in bringing the action, which can be difficult.

In general, it takes between two and six months from filing the claim / appeal until the first court hearing. However, the terms may vary depending on the specific circumstances under the case and the workflow of the specific court panel reviewing the case.

Court proceedings for declaration of the infringement and suspension of the infringement under the Patents and Utility Models Registration Act (“PUMRA”) are generally heard in court under the “accelerated procedure”. This procedure provides for shorter terms and simplified rules as compared to the general proceedings. However, the court often switches from accelerated proceedings to a general trial if the case is particularly complex.

In general, the trial before the first instance court can last six months but may be longer depending on the complexity of the case. Within the specified timeframe, the case is reviewed in at least one (but more likely multiple) open hearings, each lasting several hours.

Judges are not required to have technical expertise. If necessary, appropriate experts in the area are appointed to prepare an expert report on specific matters concerning the case.

Yes. Pursuant to PUMRA, in the event that the defendant to an infringement action has filed an opposition against the European patent before the EPO, the civil court shall suspend the case until the final judgment on the request is pronounced.

Any party can file a request for declaration of invalidity of a patent. The request shall be reviewed within an administrative procedure before the BPO. The decision of the BPO could be challenged before the Administrative Court of Sofia City. The mere enforcing of the right to request declaration of invalidity of a patent should not be seen as a patent infringement.

Yes. An interested person who has made unsuccessful attempts to agree on a FRAND license with the patent holder, may request from the BPO the granting of a compulsory licence for the use of an invention protected by a patent, provided that at least one of the following circumstances exists:

• the invention has not been used for at least four years after the filing date of the patent application or for three years after the date the patent was granted, whichever is later;
• within the time periods mentioned above the patent holder has not made sufficient use of the invention to satisfy the national market except where the patent holder provides a good reason for that fact. Furthermore, a compulsory licence may be ordered in cases where the public interest requires such a licence be granted without negotiations having been conducted with the patent holder.

The request for compulsory licence will be reviewed within an administrative procedure before the BPO. The decision of the BPO could be challenged before the Administrative Court of Sofia City.

Holders of compulsory licences owe remuneration to  the patent owners. There is no specific rate for this remuneration.

Holders of compulsory licences are entitled to bring patent infringement proceedings if the patent owner fails to submit a patent infringement claim within six months from the date that the patent owner was requested to do so in writing by the licensee. The claimant can request:

• declaration of infringement;
• compensation for damages and loss of profit;
• cessation by the infringer of actions infringing patent rights;
• the publication of the court decision in two daily newspapers at the expense of the infringer;
•  the reprocessing or destruction of the infringing items and, if the infringement was deliberate, the destruction / reprocessing of the means through which the infringement was carried out.

The invoking of a FRAND defence in patent infringement proceedings has not yet been explored in Bulgaria. The Bulgarian Courts have equally not yet heard any such cases. Since the FRAND defence is mainly applied in the context of Standard Essential Patents (‘SEP’), which are not provided under the Bulgarian Patents and Registration of Utility Models Act, we cannot presently contemplate how successful a FRAND defence might be. That said and since the legal grounds of the FRAND defence are in Art. 102 of the Treaty on the Functioning of the European Union, the FRAND defence should be possible in Bulgaria. The current absence of any relevant case law or even scholarly exploration of the matter, leaves doubt as to the merits of success of such a defensive approach.

Experts in court proceedings are appointed by the court upon a request from either party in the proceedings or ex officio by the court, when special technical, accounting or other knowledge is required to establish relevant facts. As a rule, the experts are appointed by the court from the list of registered experts under the Judiciary System Act.

The experts are obliged to produce a written report and must also present their observations and conclusions orally in an open court hearing. The court and the parties may question the experts for the purpose of clarifying their report.

In general, Bulgarian law does not provide for special disclosure proceedings. However, in the process of collecting evidence during a trial, the court may:

• oblige the party to appear in court and to answer certain questions (of which the party will be informed in advance); or
• upon the request of a party, oblige the other party or a third person to provide a document which is in their possession.

In a patent infringement claim, at the request of the claimant, the court may order the defendant and / or  a third person, involved in trading, producing or distributing the (allegedly) infringing products, to disclose certain information about the origin and distribution network of the products.

Bulgarian law does not provide for preliminary discovery but does provide a specific procedure for securing evidence. When there is a risk that certain evidence will be lost or its collection at a future trial may be impeded, the interested party may request that the relevant evidence be seized by the court in advance of proceedings.

Administrative procedure

The decisions of the disputes resolution unit within the BPO may be appealed before the Administrative Court of Sofia City and the proceedings are held under the Bulgarian Administrative Procedure Code. This decision may be further appealed to the Supreme Administrative Court.

Civil Court Procedure

First instance decisions of the Sofia City Court in patent infringement cases may be appealed to the Sofia Appellate Court. In a limited number of cases, the decision of the appellate court may be admitted for review before the Supreme Court of Cassation.

Administrative procedure

The grounds for appealing the decisions of the BPO generally include non-compliance with procedural and / or substantive law. All types of evidence may be admitted (i.e., evidence collected at the proceedings before the BPO, as well as new evidence, at the request of a party and ex officio). An appeal to the Supreme Administrative Court may be filed when the decision of the first instance court is claimed to be invalid, inadmissible or erroneous due to procedural omissions or non-compliance with substantive law. Only written evidence is allowed in the cassation appeal.

Civil Court Procedure

The decision of the first instance court may be appealed on the grounds that it is invalid, inadmissible or erroneous due to procedural omissions or non-compliance with substantive law. Reference to new facts and the collection of new evidence is strictly limited in the appellate review of the case. A cassation appeal is only admissible if the appellate court has ruled on a question of law where there is an apparent conflict in case law / court decisions or where the application of law is unclear (and depending on the value of the claim).

On average, appellate proceedings before one court take up to 12 months.

The decision of the first instance court will generally not be enforced if it is appealed within the time limits under the Civil Procedure Code.

Provisional enforcement could be admitted upon explicit request by the claimant, and subject to fulfilment of one of the following:

• the court awards a claim based on an official document;
• the court awards a claim which has been admitted by the defendant;
• the delay of enforcement may result in material and irreparable damages to the claimant or the enforcement itself would become impossible or be considerably impeded.

The court may order the claimant to furnish due security prior to the admission of the provisional enforcement.

Costs incurred during administrative procedures before the BPO are generally not recoverable. Costs incurred to appeal a decision of the BPO are recoverable. If the court revokes the appealed decision, the state fees, costs and fees for one lawyer (if any), shall be reimbursed from  the budget of the BPO.

If lawyer’s fees being sought by a party are excessive according to the actual legal and factual complexity of the case, the court may, at the request of the other party, award a lower amount of costs in this part, but not less than the statutory minimum amounts.

The main forms of ADR are mediation and arbitration. Decisions issued through the mediation procedure are not binding and mediation is not very popular in Bulgaria. Arbitration awards are binding on the parties. However, arbitration is only admissible for claims concerning the right to apply for a patent, and the right of prior / postpatent termination use.

The courts are required to encourage parties to settle the dispute by agreement. However, the courts cannot compel parties to use ADR.

The remedies that may be claimed in patent infringement cases are:

• declaration of infringement;
• compensation for actual loss incurred and for  loss of profit;
• cessation by the infringer of actions infringing  patent rights;
• the publication of the court decision in two daily newspapers at the expense of the infringer;
• the reprocessing or destruction of the infringing items and, if the infringement was deliberate, the destruction / reprocessing of the means through which the infringement was carried out.

Cessation of the infringing activity as a form of injunction is one of the claims that can be requested before the court. Injunction measures may also be requested and imposed as interim measures upon specific request of the claimant and subject to compliance with additional requirements.

The claimant is entitled to seek compensation for actual loss incurred and / or for loss of profit due to patent infringement. The court will only award damages that have occurred as a direct and immediate result of the patent infringement. It is usually difficult to prove damages as the court requires a very clear causal link between the use of the patent and the damages, and not a mere indication or suspicion.

There are no specific rules on how the amount of the loss of profit should be determined. The case law is fragmented and inconsistent in this regard. Most courts take the view that compensation should be determined based on a reasonable royalty, i.e. based on the consideration that a licensor under a licence agreement between a willing licensee and a willing licensor would normally receive. Generally, the royalty is calculated as a percentage of the turnover of sales from the infringing goods. The court would consider the specifics of each particular case, including: the business of the parties; their allegations; the opinion of the expert and all other evidence collected during the court proceedings.

No. Where compensation is sought the claimant is obliged to prove the amount of damages as part of the same proceedings. Bulgarian law does not provide for a special procedure (i.e. an additional hearing) in this respect.

No. Compensation would depend on the damages that have been proven by the claimant.

Recall of infringing products could be requested as a preliminary / interim measure. Awarding such a measure would depend on the assessment of the court and would be subject to fulfilment of specific statutory requirements.

Under an action brought before court, the claimant may claim cessation by the infringer of actions infringing patent rights. This could include cessation of production, offering for sale, trading, etc., of infringing goods. Also, the reprocessing or destruction of the infringing products and, if the infringement was deliberate, of the means through which the infringement was carried out, may be claimed.

A party may request a preliminary / interim injunction from the competent court, in accordance with the general rules of the Civil Procedural Code. The measures available to the claimant are generally any measures that the court may find suitable in each particular case (including: seizing goods suspected to be produced in breach of the patent; sealing production facilities and prohibiting performance of the suspected infringing activity). The PUMRA permits injunctions in patent proceedings. If an injunction is granted, it will be registered with the State register of patents.

The injunction may be obtained before filing the claim or in the course of the pending trial. For the former, the claim must be filed within a term ordered by the court which cannot exceed one month.

Preliminary injunction measures (interim measures) may be awarded by the court upon request of the party, when without them it will be impossible or difficult for the claimant to exercise the rights under the decision and if:

• the claim is supported by convincing written evidence, or
• a guarantee (security) shall be presented in the amount determined by the court.

The court may oblige the claimant to present a monetary or property guarantee (security), even if the claim is supported by convincing written evidence. The amount of the guarantee shall be determined by the amount of the direct and immediate damages which the defendant would suffer if the granting of an interim measure is later found to have been unwarranted.

The injunctions under the Civil Procedural Code are imposed without notice to the other party. However, that other party is entitled to appeal within one week from the date it is notified (usually by a bailiff) of the injunction.

The court endeavours to make a decision on the application for an injunction on the same day that it is submitted (but it can sometimes take several days). Where a guarantee is determined by the court, the court order shall be issued after its submission.

The aggrieved party may appeal against the injunction or make a request to the court to change the terms of the injunction. The appeal shall not suspend the effect of the injunction.

Usually, the court will request a guarantee (security)  in order to award the preliminary injunction (interim measure).

As noted above, the court may award a preliminary injunction if:

• the claim is supported by convincing written evidence, or
• a guarantee shall be presented in the amount determined by the court.

However, the court may oblige the claimant to present  a monetary or property guarantee (security), even if the claim is supported by convincing written evidence. The amount of the guarantee shall be determined by the amount of the direct and immediate damages which the defendant would suffer if the granting of an interim measure is later found to have been unwarranted.

The interim injunction will remain in effect until the court has rendered a final decision on the merits of the case. If the claimant is successful, the injunction will retain its effect and will facilitate the claimant in enforcing the decision.

The enforcement of injunctions awarded by another  EU Member State can be allowed in accordance with Regulation (EU) No 1215 / 2012 of the European Parliament and of the Council of 12 December 2012  on jurisdiction and the recognition and enforcement  of judgments in civil and commercial matters.

Apart from that, cross-border injunctions are generally not allowed. However, Bulgarian courts are competent to award injunctions related to claims for which they are not internationally competent if the subject of the injunction is located in the Republic of Bulgaria and  the decision of the foreign court can be recognised  and enforced in the Republic of Bulgaria.

Anti-Suit-Injunctions are not regulated as a form of interim measures.

However, pursuant to Regulation (EU) No 1215 / 2012:

• where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established;
• where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings, and, where the action in the court first seised is pending at first instance, any other court may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof;
• where actions come within the exclusive jurisdiction of several courts, any court other than the court first seised shall decline jurisdiction in favour of that court.

In addition, where jurisdictions in non-EU states are involved, the general rules of the Bulgarian Private International Law Code shall apply, i.e.:

• the Bulgarian court shall suspend the case instituted against it ex officio, if there is a previous trial before a foreign court between the same parties, on the same grounds and for the same request, and it is expected that it will end within a reasonable time with a final decision that can be recognised;
• when there is a pending trial abroad under the conditional legal relationship, the Bulgarian court may suspend the case instituted before it, if there are grounds to expect that the foreign decision will be recognised in the Republic of Bulgaria.