Status:
Law stated as at 01-Feb-2008
Overview of main IPRs
1.
Please give a brief overview of the main IPRs in your jurisdiction, including how they are protected (whether through registration or otherwise). Consider:
Patents
Inventions are protected through registration. An invention has to be all the following:
New.
Involve an inventive step.
Susceptible to industrial application.
Not considered to be unpatentable under the Patent Act.
The subject of an invention has to be a device, process, material (including biological material), or a combination of these.
Utility models
Utility models are inventions which are new, which involve an inventive step and which are susceptible to industrial application. Devices, processes and materials can be protected as utility models. An invention is granted legal protection on registration.
Trade marks
Protection is granted only to registered trade marks or unregistered well-known trade marks. Other unregistered trade marks are not protected in Estonia. Trade marks can be registered if the sign is capable of being represented graphically and no absolute or relative grounds of refusal exist.
Copyright
Copyright in a work is created with the creation of the work. Registration or other formalities are not required. The work has to be:
Original.
In the literary, artistic or scientific domain.
Expressed in an objective form and capable of being perceived and reproduced in this form, either directly or by means of technical devices.
Design rights
According to the national law protection is obtained through registration. The design has to be new, have an individual character and be used for manufacturing industrial or handicraft products.
An unregistered design is protected in Estonia according to Regulation (EC) No. 6/2002 on Community designs (Community Designs Regulation), if the design is new and has individual character.
Confidential information
Confidential information is only protected if it meets the following requirements:
The information is not publicly known or easily receivable for persons in circles usually dealing with such information.
The information has commercial value because it has been kept secret.
The person holding the information has taken measures to keep it in secret.
Protection of confidential information does not require registration or other formalities.
For further information about the main IPRs, see Main IPRs: Estonia.
Maintaining IPRs
2.
What facilities are available to conduct IP searches and obtain IP information on registered IP rights, for example to search:
IP information can be obtained through searches of the following databases, available on the website of the Patent Office (
www.epa.ee):
3.
What steps must a business take to maintain the registration and status of its main IPRs (for example, registration renewal, using an IPR in a certain time period, and avoiding misuse of the IPR)?
Patents
To keep the patent application or patent valid, a state fee has to be paid each year.
Utility models
To keep the registration valid, the registration has to be renewed first after four years and then after two years (registration is valid for a maximum of ten years).
Trade marks
Trade marks must be renewed every ten years on payment of a fee. In addition, the owner of a trade mark has to use a registered trade mark to designate goods and services in respect of which it is registered. If the trade mark is not used for more than five years, third parties can request termination of the sole right to the trade mark.
The owner has to take steps to avoid the trade mark becoming:
Copyright
No formalities are required to maintain copyright protection.
Design rights
Designs must be renewed every five years on payment of a fee.
Confidential information
Protection of confidential information does not require registration or other formalities. The person holding the confidential information must take measures to keep the information secret.
4.
What steps can a business take to avoid committing an infringement of a main IPR and to monitor whether a competitor is infringing its IPRs?
To avoid infringement of an IPR a business can:
Check existing registrations before using a new logo, trade mark, design or method.
In relation to agreements with advertising agencies, IT companies, and authors, include clauses confirming to the business that the other party has all relevant IPRs and transferring all relevant IPRs to the business. The agreement should also contain a sanction in case the confirmation in the agreement in not correct.
Include necessary clauses to transfer IPRs in employment agreements.
To monitor whether a competitor is infringing a business's IPRs, the business can:
In the case of medicines, check whether competitors have obtained marketing authorisations.
Use IP watch services provided by local companies to avoid infringing registrations.
Use media monitoring and research services.
Exploiting IPRs
5.
What are the main steps in an IP audit in your jurisdiction to determine the content of an IP portfolio?
The main methods are:
Questioning the company about licence agreements and ongoing IP disputes.
Searching public Estonian and EU databases of domain names, trade marks, utility models, patents and industrial designs (see Question 2).
Assignment
6.
How can main IPRs be assigned (for example, in whole or part, with or without goodwill (in the case of trade marks), in relation to future rights, and with jurisdictional restrictions)?
Patents
A patent can be assigned in whole.
Utility models
Utility models can be assigned in whole.
Trade marks
A trade mark can be transferred in relation to all or some of the relevant goods or services.
Copyright
The author can transfer all or some of the economic rights and also define the territory in which they are used. The assignment can also include economic rights that will be added to the list in the Copyright Act, due to new means and ways of using copyright protected works.
Design rights
The design can be assigned in whole. If the registration contains several variants of the industrial design, the owner can divide the registration and then transfer one of the registrations that have been made.
Confidential information
There are no restrictions concerning the transfer of confidential information.
7.
What formalities are required to assign each of the main IPRs (for example, in writing, signed by both parties and registration)?
Patents
Only a person entered in the patent register as an owner can exercise the rights deriving from the patent. To amend the data in the patent register, a request and information certifying payment of the state fee must be filed with the Patent Office. If a request is filed by the transferee, the request must be accompanied by a document certifying the transfer, or an officially certified copy of it. The request must be filed within one year from the date of transfer agreed in the transaction.
Utility models
To amend the data concerning the owner in the register a request and information certifying payment of the state fee must be filed with the Patent Office. If the request is filed by the transferee, the request must be accompanied by a document certifying the transfer, or an officially certified copy of it.
In case of transfer of a utility model encumbered with a security interest registered over movables, the written consent of the pledgee must be appended to the request. The request must be filed within one year from the date of transfer agreed in the transaction.
Trade marks
The transfer of a registered trade mark enters into force on the date of entry of the corresponding amendment to the register. To amend the data in the register a request and information certifying payment of the state fee must be filed with the Patent Office. If a request is filed by the transferee, the request must be accompanied by a document certifying the transfer, or an officially certified copy of it.
Copyright
The assignment agreement must be in writing.
Design rights
Although the rights are considered transferred to another person from the date agreed in the transaction, the transferee can exercise such rights from the date on which the amendment has been published in the official gazette of the Patent Office. To amend the data in the register, a request and information certifying payment of the state fee must be filed with the Patent Office.
If a request is filed by the transferee, the request must be accompanied by a document certifying the transfer or an officially certified copy of it. The request must be filed within one year from the date of transfer agreed in the transaction.
Confidential information
There are no formalities for assignment. A written agreement is recommended to avoid possible misuse of the information or a dispute about the content and extent of assigned confidential information.
8.
What main terms should be included in an assignment of IPRs?
Patents and utility models
Information concerning the following should be included:
Trade marks
Information concerning the following should be included:
Parties.
Trade mark, goods and services.
Fee and payment conditions.
Obligations concerning registering the transfer.
Copyright
Information concerning the following should be included:
Design rights
Information concerning the following should be included:
Confidential information
Information concerning the following should be included:
Licensing
9.
How can each of the main IPRs be licensed (for example, in whole or part, with or without goodwill (in the case of trade marks), and with jurisdictional restrictions)?
Patents and utility models
The owner of a patent or of a utility model can license the patent or utility model in part or in full, that is, all the rights deriving from the registration or only some of them (for example, only the right to import and sell, not to produce).
Trade marks
The owner of a trade mark can license the trade mark in respect of all the relevant goods or services or only in respect of some of the goods and services.
Copyright
The author can license all or some of the economic rights and also define the territory. The licence can also include economic rights that will be added to the list in the Copyright Act, due to new means and ways of using copyright protected works.
Design rights
The owner of an industrial design can license some or all the rights deriving from the design.
Confidential information
There are no restrictions concerning licensing of confidential information.
10.
What are the formalities to license each of the main IPRs (for example, is registration required)?
Patents and utility models
The licence agreement must be in writing. Licences can be registered in the register. An unregistered licence has no legal effect in relation to third parties. If there is a conflict of rights granted by different licences to several licensees, preference is given to the licensee whose licence is registered.
Trade marks
An entry is made in the register concerning a licence if a party to the licence agreement requests this.
Copyright
The agreement must be in writing. The grant of a non-exclusive licence can also be made in a format that can be reproduced in writing. The written format, or format which can be reproduced in writing, is not required for:
A non-exclusive licence concerning contracts for publishing works in periodical publications or reference works.
One-time transmissions of oral works in radio and television, or in cable networks.
Design rights
The licence agreement must be in writing and can be registered in the register. If there is a conflict of rights granted by different licences to several licensees, preference is given to the licensee whose licence is registered. An unregistered licence has no legal force in relation to third parties.
Confidential information
There are no compulsory formalities concerning licensing of confidential information.
11.
What main terms should be included in an IP licence?
Patents and utility models
The main terms that should be included are:
Details of the patent or utility model.
Whether the licence allows the licensee to exercise all or only some of the rights arising from the registration.
Licence type.
Term.
Territorial scope.
Payment of royalties.
Details of the registration of the licence.
Trade marks
The main terms that should be included are:
Details of the trade mark.
Whether the licence allows the licensee to exercise all or only some of the rights arising from the registration.
Type of licence.
Right to grant a sublicense.
Term.
Territorial scope.
Payment of royalties.
Registration of licence.
Copyright
The main terms that should be included are:
Description of the work (for example, format, volume and name of the work).
Rights concerning which authorisation is granted.
Type of licence agreement.
Right to grant a sublicence.
Manner of use of the work.
Territory.
Term.
Term of commencement of use of the work.
Payment of royalties.
Design rights
The main terms that should be included are:
Confidential information
The main terms that should be included are:
Taking security
12.
Is security commonly taken over IPRs? If yes, which types of IPRs are commonly secured? What problem areas commonly arise (for example, problems valuing the secured IPR assets, or when enforcing the security)?
Trade marks are the IPRs most commonly used as security. There are problems with valuing secured IPR assets due to lack of information that can be used for comparison. It can also be problematic to find a buyer for trade marks if it is necessary to realise the secured trade mark.
13.
What are the main security interests taken over IPRs? How are they created (for example, in writing) and how are they perfected (that is, made enforceable against third parties, for example by registration)? Consider:
Patents.
Trade marks.
Copyright.
Design rights.
Any form of IP that has been registered in the relevant public registry can be the subject of a registered security interest. The only security interest taken over such IPRs is a pledge.
Security interests in IPRs are perfected by following the procedures for registering an entry in the appropriate IP register and paying any required fees. For details of fees, see
www.epa.ee/default.asp?id=486#des M&A
14.
What IP-related due diligence is commonly carried out in:
A share sale?
An asset sale?
IP-related due diligence is similar for a share sale and an asset sale and consists of:
Searches of public Estonian databases of domain names, trade marks, utility models, patents, and industrial designs.
Enquiries of the undertaking about licence agreements and ongoing IP disputes.
15.
What IP-related warranties and/or indemnities are commonly given by the seller to the buyer in:
A share sale?
An asset sale?
IP-related warranties and/or indemnities commonly given by the seller to the buyer include that:
IPRs are valid.
IPRs belong to the seller.
IPR are not secured or licensed.
The seller is not aware of any circumstances or third party rights that could be grounds for cancelling the IPRs.
There are no ongoing infringement or registration disputes.
16.
How are the main IPRs transferred in:
A share sale?
An asset sale?
In a share sale, the IPRs are not transferred and ownership remains with the company being sold.
In an asset sale, all IPRs are transferred and relevant changes have to be made in the IP registers.
Joint ventures
17.
Is it common for companies to set up joint ventures in your jurisdiction to develop projects that heavily involve IPRs? If yes, please briefly outline the main IP-related provisions that should be included in the joint venture agreement.
Joint ventures have become more common in Estonia. The joint venture agreement should include:
A list of IP and know-how transferred to the joint venture.
Conditions for use of the outcome of the research work.
Conditions for registration of the IP.
Details of the use and licensing of IP created by the joint venture.
Competition law
18.
Please briefly outline the main provisions of your national competition law that can affect the exploitation of the main IPRs.
An undertaking is deemed to control essential facilities if it owns or possesses an IPR, without access to or the existence of which it is impossible for other persons to operate in the relevant goods market (Chapter 4, Competition Act).
Undertakings in control of essential facilities are also undertakings in a dominant position. Any direct or indirect abuse by an undertaking or several undertakings of the dominant position in the goods market is prohibited, including:
Directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions.
Limiting production, services, goods markets, technical development or investment.
Offering or applying dissimilar conditions to equivalent agreements with other trading parties, thereby placing some of them at a competitive disadvantage.
Making entry into an agreement subject to acceptance by the other parties of supplementary obligations that have no connection with the subject of such agreement.
Forcing an undertaking to concentrate or enter into an agreement which restricts competition, engage in concerted practices or adopt a decision with the undertaking or another undertaking.
Unjustified refusal to sell or buy goods.
The government, a state agency prescribed by law or a local government (where an undertaking in control of essential facilities provides services in the territory of a local government) can:
Designate the prices to be used, taking into account the reasoned costs of the undertaking.
Impose other conditions or obligations on the undertaking, so that the buyers of the undertaking's goods or sellers of goods to the undertaking are not put in a substantially worse situation than they would be if free competition was present in the area of activity.
Unless there are objective reasons to refuse, an undertaking in control of an essential facility must:
Permit other undertakings to gain access to the essential facility under reasonable and non-discriminatory conditions for the purposes of the supply or sale of goods.
Maintain separate records on revenue and expenditure related to each product or service, based on consistently applied and objectively justified principles of calculation, which must be clearly specified in the internal rules of the undertaking. The calculation of revenue and expenses must enable an assessment of whether the price of a product or service is in a reasonable ratio to the value of the product or service.
The Competition Act also prohibits agreements between undertakings which may affect trade in Estonia and which have the object or effect of restricting competition in Estonia or part of it. Such an agreement may still be lawful if it meets certain requirements and therefore is considered not to be anti-competitive (
see Question 20).
19.
Please give brief practical examples of national competition law issues that can arise in the exploitation of the main IPRs (such as problematic licence terms) and briefly outline any possible solutions to manage them.
The Estonian legislation is harmonised with the EC legislation, therefore issues that may rise in the exploitation of the main IPRs are similar to the issues in case of EC regulation. For example, problematic licence terms can include:
Non-competition clauses.
Fixing of resale prices of the licensed products.
Restriction of production.
Territorial exclusivity (restrictions of passive sales).
Tie-in clauses.
Where possible, agreements should be drafted in-line with applicable block exemptions and guidance provided by national and EC authorities.
20.
What exclusions or exemptions are available for national competition law issues involving the exploitation of the main IPRs (for example, are parallel exemptions available)?
The government has granted by regulation block exemptions in the case of:
Vertical agreements including provisions on IP transfer or licensing, on condition that these provisions are not the primary object of the agreement and they are directly related to use, selling or resale of the goods by the buyer or its clients.
Horizontal agreements concerning research and development.
Advertising
21.
Please briefly outline the extent to which advertising laws impact on the use of third party trade marks.
Advertising is considered misleading if it deceives or is likely to deceive the public in any way, including its presentation, or which, for those reasons, injures or may injure a competitor. In determining whether advertising is misleading, account is taken of all its features, in particular any information it contains concerning the manufacturer of the product or service provider and the IPRs related to the product or service.
Comparative advertising cannot:
Create confusion between the compared competitors' trade marks.
Discredit or denigrate the compared trade marks.
Take unfair advantage of the reputation of the trade marks of a competitor.
Employees and consultants
22.
Who owns each of the main IPRs created by an employee in the course of his employment? Is compensation payable in relation to employee IPRs? What main steps can an employer take to ensure it owns each of the main IPRs (for example, by including an assignment of IPRs clause in the employment contract)?
Patents
If an invention is created in the performance of employment duties, the right to apply for a patent and to become the owner of it is vested in the author or other person according to the employment contract, unless otherwise prescribed by the legislation of the country of residence or seat of the applicant.
The employment contract should include an assignment of IPRs clause and an obligation of the author to sign necessary documents for a patent application, if requested by the relevant Patent Office.
An author has the right to receive fair proceeds from the profit received from the patent.
Utility model
If an invention is created in the performance of employment duties, the right to apply for the registration of a utility model and to become the owner of it is vested in the author or another person according to the contract or employment contract, unless otherwise prescribed by the legislation of the country of residence or seat of the applicant.
The employment contract should include an assignment of IPRs clause and an obligation of the author to sign necessary documents for an application, if requested by the relevant Patent Office.
An author has the right to receive fair proceeds from the profit received from the utility model.
Copyright
The author of a work created under an employment contract enjoys copyright in the work but the economic rights of the author to use the work are transferred to the employer, unless otherwise prescribed by contract.
The employment contract should include clauses regulating the exercise of personal rights by the author.
Design rights
The right to apply for the registration and ownership of an industrial design created in the performance of employment duties is vested in the employer or the customer, unless the duties of employment or the contract prescribe otherwise.
23.
Who owns each of the main IPRs created by an external consultant? What main steps can a business take to ensure it owns each of the main IPRs (for example, by negotiating an assignment of IPRs)?
Patents
If an invention is created in the performance of contractual obligations the right to apply for a patent and to become the proprietor of the patent is vested in the author or other person according to the contract, unless otherwise prescribed by the legislation of the country of residence or seat of the applicant (
see Question 22).
Utility model
If an invention is created in the performance of contractual obligations, the right to apply for the registration of a utility model and to become the owner of the utility model is vested in the author or another person according to the contract, unless otherwise prescribed by the legislation of the country of the residence or seat of the applicant (
see Question 22).
Copyright
The author of a work created in the performance of contractual obligations enjoys copyright in the work. The contract should include:
Design rights
The right to apply for the registration and ownership of an industrial design created in the performance of contractual obligations is vested in the customer, unless the contract prescribes otherwise.
Tax
24.
What are the main taxes payable by a licensor on the licensing of the main IPRs (for example, withholding tax on royalty payments)?
Income tax
If the licensor is a resident natural person then the licensee withholds income tax on royalty payments. If the licensor is non-resident, then the licensee only withholds income tax on royalty payments if the licensee is the government, a sub-central government entity, or a resident or a non-resident through or on account of a permanent establishment in Estonia (this rule is subject to exceptions).
Social tax
Social tax is paid if copyright protected work is created by the author at the request of a buyer in the course of a contract for services. Social tax is paid by the licensee.
Value added tax (VAT)
If the licensor is engaged in business and the taxable supply of the transactions exceeds EEK250,000 (about US$24,000) calculated from the beginning of a calendar year, an obligation to register as a taxable person arises. The licensor has to add VAT to the taxable value of the goods transferred or services provided, and pay VAT according to the procedure in the VAT Act.
25.
What are the main taxes payable by a seller on the disposal of the main IPRs?
Income tax
If the seller of an IPR is a resident natural person, the buyer withholds income tax on the payment. If the seller is non-resident, the buyer only withholds income tax on royalty payments if the buyer is the government, a sub-central government entity, or a resident or non-resident through or on account of a permanent establishment in Estonia (this rule is subject to exceptions).
Social tax
Social tax is paid if copyright protected work is created by the author at the request of a buyer in the course of a contract for services. Social tax is paid by the buyer.
VAT
If the seller is engaged in business and the taxable supply of the transactions carried out by the person exceeds EEK250,000 (about US$24,000), as calculated from the beginning of a calendar year, an obligation to register as a taxable person arises. The seller has to add VAT to the taxable value of the goods transferred or services provided and pay VAT according to the procedure in the VAT Act.
Cross-border issues
26.
What international IP treaties is your jurisdiction party to?
Estonia is party to the following:
WIPO Paris Convention for the Protection of Industrial Property 1883.
WIPO Convention Establishing the World Intellectual Property Organization 1967.
Patent Cooperation Treaty 1970.
WIPO Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks 1957.
Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure 1977.
Locarno Agreement Establishing an International Classification for Industrial Designs 1968.
Strasbourg Agreement Concerning the International Patent Classification 1971.
WIPO Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks 1989.
WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994.
European Patent Convention 1973.
WIPO Trademark Law Treaty 1994.
Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs 1999.
WIPO Patent Law Treaty 2000.
WIPO Berne Convention for the Protection of Literary and Artistic Works 1971.
WIPO Convention for the Protection of Producers of Phonograms Against Unauthorised Duplication of Their Phonograms 1971.
WIPO Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations 1961.
Singapore Treaty on the Law of Trademarks 2006.
WIPO Copyright Treaty 1996.
27.
Are foreign IPRs recognised in your jurisdiction? Please briefly outline any relevant recognition or registration procedure for each of the main IPRs.
Due to the territorial nature of IP, in general foreign IPRs are not recognised in Estonia. To ensure protection in Estonia, ordinary procedures of registration have to be followed. However, there are some exceptions:
Copyright
The Copyright Act also applies to works:
First published in Estonia or not published but located in Estonia, regardless of the citizenship or the permanent residence of the creator of the works.
Which must be protected under an international agreement that Estonia is party to.
First made available to the public in a foreign state (or not made available to the public but located in the foreign state), the author of which is a person whose permanent residence or registered office is in the foreign state and the work is not protected under an international agreement Estonia is party to (but only if this state guarantees similar protection for works of Estonian authors and for works first published in Estonia).
Trade marks
Trade marks used in another country are protected against registration in Estonia of identical or confusingly similar trade marks, if the trade mark was also used in another country on the date on which the application was filed in Estonia, and the application is filed in bad faith.
Reform
28.
Please briefly summarise any proposals for reform and state if they are likely to come into force and, if so, when.
By joining the North Atlantic Treaty Organisation (NATO), Estonia became obliged to ratify the NATO agreement for the mutual safeguarding of secrecy on inventions relating to defence and for which applications for patents have been made. According to the agreement, the member states must mutually protect the secrecy of inventions considered important for national defence. According to the Act on State Secrets and Information Classified as Secret that took effect on 1 January 2008, the Minister of Defence can declare inventions considered important for national defence to be a state secret. To keep patent applications filed for inventions important for national defence confidential, the Ministry of Economic Affairs and Communications has drafted an amendment to the Patent Act that has not yet been enforced.
During the past year, reform of the domain name registration system has been discussed, to change the operator of the domain name registry and to abolish several restrictions (for example, only legal persons can register, only one domain name per company is allowed, and only companies registered in Estonia can currently register). Therefore in the near future the domain name registration system will be going through major changes.