Intellectual property rights as foreign direct investments: Current state of affairs in Serbia

This paper deals with the issue of whether intellectual property (IP) rights may be qualified as investments in terms of Serbian laws on investments, bilateral investment treaties (BIT) currently in force, and the ICSID Convention. The author first analyses the provisions of the Law on Investments with a special focus on the provisions defining an investment. By comparing these provisions with the corresponding norms of the previous law, as well as the relevant laws of the countries in the region, the enhanced solutions are highlighted, while the space for further improvement is identified. Subsequently, the author turns his attention to the applicable BITs and the ICSID Convention to examine whether IP rights may represent an investment under their terms. In the case of qualification of IP rights as investments, the right holders could be entitled to rely on the additional standards of legal protection and a new form of dispute settlement mechanism known as investment arbitration, while the host state could be exposed to a greater risk of being declared liable for breaches of legal standards and ordered to pay compensation to the investors. Upon analysing the main practical consequences of the qualification of IP rights, the author critically addresses major principles of the Serbian investment policy, which are identified through a detailed scrutiny of the relevant legal norms.