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Investor's Legal Brief, February 2019

  • Lithuania
  • Other


1.    The Law on Trademarks amendments came into force

On January 1, 2019 a new Lithuanian law on trademarks entered into force. The law significantly amended many aspects of trademark regulation in Lithuania, including list of registrable trademarks, procedure of the application and registration, defence of injured trademark owners’ rights, also – expanded rights of defence against claimed infringements. In parallel of the amendments other legal laws have been changed, including legislation regulating fees related to trademarks, Rules of Registration of the Trademarks, etc. Other related legal acts (for example regulating opposition, cancellation appeal procedures) will be amended in the near future.
The main changes include:

•    Single fee for both application and registration of the trademark, which starts from 180 EUR per trademark. Before implementation of the amendments the applicant had to pay two fees – one for the application, and the second one – for the registration, publication and issuance of the certificate, which had to be paid after the expert finishes the trademark’s expertise.  
•    Ability to provide remarks to the expert who is performing expertise of the trademark. Need of such remarks became necessary due to the fact that the expert is performing only preliminary expertise and may be unaware of important court practice, consumer opinion poll results, etc., which may render different result of the expertise.
•    More duties to the State Patent bureau in relation to trademark disputes. As of January 1, 2019 disputes regarding invalidity of the trademarks shall be solved before the State Patent Bureau. Before implementation of the changes these disputes were solved before Vilnius regional court. Now this court will act in many instances only as the appeal instance in regards of decisions of the State Patent Bureau.
•    Failure to use the trademark as defence in opposition procedures. As per applicable legislation – the trademark owner obtains the rights and maintains them not only with completion of registration procedures, but also if requirements to use the trademark properly are met. Now in each opposition the person filing thereof may be required by the adversary to provide evidences, confirming proper usage of the trademark. In case of failure of provision of such evidences the opposition will be dismissed.

2.    The State Data Protection Inspectorate has published the plan for preventive inspections for 2019

On 4th of February, 2019, the preventive inspections plan of State Data Protection Inspectorate (SDPI) has been adopted. According to the plan, it is expected to conduct 75 planned inspections.
As indicated in the website of the SDPI, in 2019 the most attention will be paid to data controllers, some of which for several times, to evaluate whether such controllers have implemented the instructions of the SDPI as well as the following data controller groups:

•    Gyms for the legality of processing of biometric data;
•    Sport and tourism goods and services companies for the implementation of data minimisation principle when processing the personal data for the purpose of conclusion and execution of rent agreement and data subject information about the personal data processing;
•    Hotels for the implementation of data minimisation principle while processing the guests’ personal data;
•    Public institutions for the agreements, concluded with data processors in the light of compliance with the requirements established in the GDPR;
•    Quick loan entities for ensuring the security of data protection processing on purpose conclusion and execution of consumer credit agreements.
These data controllers were chosen according to the regulatory amendments regarding the legal regulation of biometric data as established in the GDPR as well as the data subjects’ claims and evaluations of the public research of Lithuanian citizens. The companies mentioned in the inspections plan are recommended to prepare for the inspections. Nevertheless, the companies that are not included in the inspections plan may also be inspected.

3.    The economic partnership agreement between EU and Japan comes into force

The Economic Partnership Agreement (EPA) between the EU and Japan enters into force on 1 February 2019 by which Businesses and consumers across Europe and in Japan can now take advantage of the largest open trade zone in the world.
According to the European Commission, Agreement removes the vast majority of the €1 billion of duties paid annually by EU companies exporting to Japan. Once the agreement is fully implemented, Japan will have scrapped customs duties on 97% of goods imported from the EU.   
Some provision of this agreement:

•    The Japanese duties on many cheeses as well as on wine exports will be scrapped;
•    allow the EU to increase its beef exports to Japan substantially, while on pork there will be duty-free trade in processed meat and almost duty-free trade for fresh meat;
•    The protection in Japan of more than 200 high-quality European agricultural products, so called Geographical Indications (GIs), and the protection of a selection of Japanese GIs in the EU is ensured.
Further process
To take stock of the initial months of implementation, the first EU-Japan committee meeting will be convened in April 2019. On the parallel issue of investment protection, negotiations with Japan continue on standards and investment protection dispute resolution.
It is important to mention that both EU and Japan have adopted the decisions ensuring the free and safe data flow between the EU and Japan. These decisions have established that both parties recognise each other’s data protection systems and consider these systems as ‘equivalent’, which means, that the world's largest area of safe data flows is created.

4.    The assets to be bought on the auction may be paid off by borrowed money

From the 1st of July, 2019 the amendments of the Civil Procedure Code of the Republic of Lithuania (hereinafter – CPC) come into force according to which new possibilities to buy the assets with borrowed money while mortgaging the money for the creditor.
Under current regulations, for such assets the winners of the auction shall pay (depending on the price – mostly within 30 days if the term has not been prolonged) to pay off the full price with one’s own money, e.g. there is no possibility to mortgage the arrested wealth, e.g. to bank or credit institution and receive financing for the acquisition of the wealth and then buy the wealth.
After the above-mentioned amendments come into force, the winner of the auction who seeks to pay off by borrowed money, will be issued by the bailiff a certificate proving the right to buy the respective assets. Such certificate will be shown for the creditor in order to perform the housing deposit evaluation and other inner procedures. The buyer will also be obliged to pay off within 30 days (in case the term is not prolonged), which means, the submission of the deposit, e.g. formalisation of hypothecation shall be performed within the same period of time.
 It is worth mentioning that according to the literal meaning of the proposed text, the amendments of CPC will allow to acquire only the real estate that is to be auctioned, however, it is probable that during the practical approach the regulation will become wider by including the possibility to acquire the movable property that is to be auctioned as well.
In any way, this novelty of the CPC is a logical step matching the reality which is considered as a step forward in the civil circulation. According to the Bailiff House, after the proposed amendments come into force, the auction will become more open for everyone who wishes to pay off the auctioned property and not only for those who have the required amount in their accounts.

5.    The Migration Department has published the guide for the UK citizens after no-deal Brexit

The Ministry of Interior of the Republic of Lithuania as well as the Migration Department under the Ministry of Interior have published the information regarding the legal status of UK citizens after the UK leaves the EU without the agreement (the so called no-deal Brexit) which is planned to happen on 29th of March, 2019.
The basic rule is that all UK citizens will be allowed to stay in the territory of Lithuania. However, according to the information published, residence permit registration in Lithuania is very important for ensuring legal stay in the case of any scenario for the future relations between the European Union and the UK. The transition period during which the UK citizens who intend to stay in Lithuania starts directly after Brexit on 30th of March, 2019 and lasts until 31st of December, 2019.
Citizens of UK will be required to obtain temporary residence permits. As indicated in the website of the Migration Department, the examination of the application for UK citizens’ seeking obtain or renew their residence permits can take up to 3 months.
31st of December, 2019 is only a preliminary date and may change due to the Brexit situation.

6.    The court imposed a fine for the head of the company for disregarding the obligations set by the Competition Council

Vilnius District Court imposed a fine for the head of the company for disobeying the previous restriction set by the decision of the court, as requested by the Competition Council.
Since 2012 the Law on Competition of the Republic of Lithuania has established a possibility to impose sanctions for the head of the company for taking part in the business subject activities regarding anti-competitive agreements or abuse of dominance. Such sanction could be a restriction to be appointed as a head of public and (or) private legal entity for three to five years, to be a member of board or member of supervisory board of public and (or) private legal entity as well as the fine up to EUR 14 481 could be imposed.
At the end of year 2018 the restriction to be appointed as a head of public and (or) private legal entity for three to five years, to be a member of board or member of supervisory board of public and (or) private legal entity was set for three company heads who participated in cartel agreement. For disregarding such restriction, one of the heads was imposed with a fine of EUR 500 by the Vilnius District Court.
This decision is a fact supporting the argument that the Competition Council will keep on monitoring the fulfilment of obligations set by the decisions of the courts as regards to the competence of Competition Council. It is worth mentioning that throughout the year 2018 the Competition Council has addressed the court in relation to the personal liability for 8 heads of the company in three cartel cases. Currently, restrictions for 3 heads of the company are in force, information regarding these restrictions can be found in the Competition Council website: