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Varadinov & Co.
Legal Bulletin

Varadinov & Co Attorneys at law is recognised in the IFLR1000
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State Gazette, issue 28 /April 5th, 2019
The Trade Seal Protection Act regulates the terms and conditions for protection against unauthorized acquisition, use and disclosure. The legal act is in line with the European Commission’s Strategy for Smart, Sustainable and Inclusive Growth (Europe 2020) adopted by the European Commission, the overall strategy to ensure a properly functioning Internal Market for Intellectual Property Rights, as well as the EU Directive 2016 / 943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and commercial information.
Commercial secrecy is not a new concept of Bulgarian legislation, which contains norms for regulating various aspects of its protection - in the Commercial Law, the Protection of Competition Law, the Commodity Exchanges Act, the Law on Access to Public Information. However, the Business Secrets Act gives a single definition of it as information that meets at the same time three requirements. The first is to constitute a secret in such a way that, in general or in its exact configuration and set of elements, it is not generally known or easily accessible to persons from the environments that normally handle such information. The second requirement is that the information in question has commercial value because of its secret nature and the third person - the person who has control over it - has taken steps to keep it secret.
In current Bulgarian law, there were no special rules for the award of trade secrets damages. Possible options are based on the general provisions relating to damages provided for in the Obligations and Treaties Act and in the State and Municipalities Liability Act. The proposed legal safeguards will minimize the risks of misappropriating development results, know-how and other valuable business secrets that business and research organizations face. Definitions of key concepts - trade secrets, trade secrets, offenders and goods - subject to violation are given.
The difference between the holder and the offender is whether the natural or legal person concerned has acquired it lawfully. The hypotheses on the lawfulness and unlawfulness of the acquisition, use and disclosure, as well as the exceptions in which this is not considered an infringement, are explicitly mentioned. The holder or the person controlling business secrecy may sue any offender by claiming damages for the damage suffered, suspending or prohibiting infringements, prohibiting the manufacture, supply, placing on the market, use or storage of the goods in question. Documents, belongings, materials, substances or electronic documents or parts thereof that contain or bear commercial confidentiality may be required to be surrendered or destroyed.
The injured traders will assert their rights through court proceedings in civil cases by asking the court to impose protective measures against offenders and to award damages for the damages suffered. There are also prescription terms for the realization of the right of action in the civil court. It will be extinguished by the expiration of three years from the opening of the offender, but no later than five years after the violation was committed.
At any time in the case, the parties and any other interested party, including witnesses, may ask the court to identify the information in the case as confidential as it is likely to contain commercial confidentiality. The court may classify certain information as confidential and on its own initiative if it considers that sufficient evidence is provided in the case to justify the conclusion that it contains an alleged commercial secret.
In such cases, the court may, of its own motion or at the request of a party to the proceedings, impose special measures to preserve its confidentiality. This can be done by a total or partial prohibition of access to documents held in the file containing business secrets and restricted access to court hearings, records or minutes. In such cases, the relevant procedural steps will be taken in camera. No disclosure of business secrets against the lodging of a guarantee is allowed, but the plaintiff may lodge a security to impose the requested measures.
If the claim is upheld, the defendant may be ordered to disclose, at his own expense and in an appropriate manner, information about the decision on the case and its publication in part or in whole with deleted commercial information. However, if the court finds that the action is unfounded, compensation may be awarded to the defendant for the damage suffered by him, as well as disclosure of the information on the outcome of the case. In case of non-fulfillment of the measures determined in the court judgment against the convicted party, enforcement may be started, including by imposing consecutive fines of up to BGN 500 for each week of non-fulfillment.
Border control measures are also provided for as a precautionary measure or in execution of a court decision, at the request of the trade secret holder, at his request, the customs authorities will be able to detain goods “violators”. Their refusal to do so will also be subject to judicial review, and they will not be held accountable if they acted in good faith but could not identify the production whose detention is sought.
The protection of business secrets will be limited in some hypotheses. It shall not apply to the right to freedom of expression and information in cases where business secrets are disclosed by its holder if disclosure is in the public interest and if it limits the independence of trade unions and employers’ of collective agreements. The law can not be applied as a reason to limit the movement of employees who can use their experience and skills acquired in good faith in the course of their work.

State Gazette, issue 29 /April 8th, 2019
A general opportunity for magistrates and court clerks to participate in European projects for financial support to judicial reform introduces the Law on the Management of European Structural Funds and Investment Funds. Judges, prosecutors, investigators and court officials in the judiciary may participate in project implementation and / or project management activities with a beneficiary or partner to the Supreme Judicial Council to finance measures related to the implementation of the Updated Reform Strategy the Judiciary and the Strategy for the Introduction of e-Government and e-Justice. Participation is admissible in compliance with the rules for avoiding double financing and eligibility of expenses, whereas prosecutors, investigators and court clerks in the bodies of the judiciary are considered as persons under Art. 49, para. 3 of the Act, and the activities are assigned by the Authorized Project Coordinator or Coordinator.

State Gazette, issue 33 /April 19th, 2019
Subsequent changes to the Bank Insolvency Act aim to facilitate collection of receivables. Claims of temporary insolvency officers, assignees, the Bank Deposit Guarantee Fund, and other creditors against set-off, cancellations and appeals will not be subject to a state fee. The possibilities for representation by authorized attorneys to introduce an explicit requirement that the legal representation of the bank be carried out by the temporary administrator or assignee in bankruptcy is restricted. The amount of remuneration for attorneys appointed as special representatives is also limited. In the cases in which the court appoints a special representative of the plaintiff’s costs incurred by the creditors of the insolvency proceedings, the remuneration of the special representative shall be determined by the order of art. 37 of the Law on Legal Aid.
With regard to the items excluded from the cashing program or pledges on which a pledge has been established, if a law provides for the sale to be performed by the creditor without judicial intervention, unless the insolvency of the pledgee’s claim is refused, it is provided that they can be included in the redemption program additionally. A precondition for this is that the pledgee within three years from the approval of the list of the accepted receivables has not requested the continuation of the execution under Art. 21, para. 4, respectively, by the order of the Special Pledges Act.
Changes exist also in the conditions of sale by auction with open or secret bidding - in cases where the chattel or the right is not sold and on the proposal of the trustee, the chairman of the management board of the guarantee fund allows the appointment of a new auction of the property or the right at reduced price up to 50 percent of the initial valuation, or sale by direct negotiation or through an intermediary. In the last two hypotheses, the permission will be issued when the assets and rights included in the redemption program are not sold after being sold at least three times on a public auction. Sale by direct negotiation or through an intermediary shall be made with an initial sale price of not less than 30 per cent of the valuation shown in the inventory and the price shall be reduced accordingly to the realization of the property or the right as prepared by the trustee on the basis of methodological instructions from the fund rules for making a sale through direct negotiation disclosed on the Bank’s website. An announcement to initiate a direct sales or an intermediary sale procedure must be posted on the insolvency bank’s website.
In the order of receivables of depositors who are physical persons or micro, small and medium enterprises, for the part that exceeds the amount of the guarantee under the Law on Deposit Insurance in the Bank, the claims on deposits of individuals or micro, small and medium-sized enterprises that would be eligible deposits if they were not made in branches outside the European Union of the Bank in bankruptcy. Added totally new lines of receivables are: 11. receivables arising from debt instruments that meet the following conditions: (a) the original contractual maturity of the debt instruments is at least one year; (b) debt instruments do not contain embedded derivatives and are themselves not derivatives; (c) in the relevant contractual documentation and, where applicable, in the prospectus relating to the issue, the lower order of this point is expressly mentioned; 12. receivables arising from subordinated instruments or subordinated loans that are not part of the additional Tier 1 or Tier 2 capital; 13. receivables arising from Tier 2 instruments in accordance with their rights; 14. receivables arising from instruments of additional Tier 1 capital in accordance with their rights; 15. receivables arising from Common Equity Tier 1 instruments in accordance with their rights. Variable interest debt instruments, determined on the basis of a widely used reference rate, and debt instruments that are not denominated in the issuer’s local currency provided that the principal, repayments and interest are denominated in the same currency are not considered debt instruments containing embedded derivatives solely because of these characteristics.