On 9 November 2012, the Serbian Supreme Court of Cassation (SCC) passed a decision resolving the negative conflict of competence that had arisen between the High Court in Belgrade and the Commercial Court in Belgrade, over a dispute between two foreign legal entities – non-governmental organisations – regarding trademark infringement.
Previously, on 27 August 2012, the High Court declined the jurisdiction and transferred the case to the Commercial Court, arguing that the latter was competent because both parties to the dispute were legal entities. However, the Commercial Court also declined the jurisdiction and referred the matter to the SCC. According to the Commercial Court, the litigants, as non-governmental organisations of a non-economic character, do not represent entities for which the law prescribes the jurisdiction of commercial courts. Ultimately, the SCC accepted the argument of the Commercial Court in Belgrade and ordered that the High Court should try the case.
Reasoning of the Supreme Court of Cassation
The starting point in the SCC’s decision was the observation that the parties were associations, since they have been established to achieve general or common interests and their activities are not oriented towards profit making.
The SCC then compared the competences of high courts and commercial courts in intellectual property disputes. High courts adjudicate in the first instance in disputes concerning copyright and related rights, as well as industrial property rights (protection and use of patents, models, samples, trademarks and geographical indications), if no other court is competent (Law on the Organization of Courts, art. 23, para. 1, recital 7). Commercial courts adjudicate intellectual property disputes between business entities, as well as intellectual property cases between business entities, on the one hand, and other legal entities carrying out economic activity, on the other (Law on the Organization of Courts, art. 25, para. 1, recital 2, in connection with recital 1).
Having examined the competences of commercial and high courts, the SCC gave priority to the jurisdiction of the High Court, because both parties in the dispute were associations not carrying out economic activity.
The Commercial court and jurisdiction in disputes concerning intellectual property rights
Some legal professionals, including a part of the judiciary, consider commercial courts to be competent to adjudicate all disputes arising between legal entities. The High Court in Belgrade had apparently accepted that rationale, for it stated that the dispute should be dealt with by the Commercial Court in Belgrade, given that both parties are legal entities.
The general rule on the requirements to be fulfilled for commercial courts to assert jurisdiction has remained largely unchanged in the past two decades. Under that rule, certain subjective and objective requirements must be fulfilled: subjective requirement relates to the nature of the parties – whether they are business entities, or not, whereas the objective requirement concerns the substance of the dispute – whether it regards the performance of economic activities, or not. For a commercial court to assert jurisdiction, it is necessary either (i) that the dispute is between at least two business entities, or (ii) that the dispute is related to the performance of economic activities and at least one of the parties is a business entity (Law on the Organization of Courts, art. 23, para. 1, recital 1).
With regard to a dispute concerning the protection of intellectual property rights, the subjective requirement for the assertion of jurisdiction by commercial courts is the same as in other types of disputes, i.e. the dispute must be between at least two business entities, or at least one of the parties must be a business entity. The objective requirement, by virtue of an explicit statutory provision (Law on Organization of Courts, art. 25, para. 1, recital 2), is determined by the nature of the dispute: it must concern copyright or related rights, or industrial property rights. This specific objective requirement thus substitutes the requirement from the general rule on the requirements for the assertion of jurisdiction of commercial courts – that it is a dispute concerning economic activity.
Therefore, for a commercial court to assert jurisdiction in a dispute concerning intellectual property rights, it is necessary that at least one of the parties is a business entity. In the case between the two non-governmental organizations, the objective requirement is fulfilled in that the dispute concerns trademark rights. The subjective requirement, however, is not satisfied, because neither party is a business entity. Hence, SCC applied the general provision on competence of high courts in intellectual property disputes („a high court shall adjudicate in the first instance in copyright and related rights matters, as well as in matters concerning protection and use of patents, models, patterns, trademarks and geographical indications, if no other court is competent “), instead of the special provision which provides for jurisdiction of commercial courts.
