IP Enforcement In Kazakhstan. How It Really Works

This article contains general information about IP enforcement practice in Kazakhstan and our recommendations on the best ways for trademark owners to protect their rights.

1. PROTECTION OF TRADEMARK OWNERS' RIGHTS UNDER KAZAKH LAW

   In Kazakhstan, trademarks are subject to the Law "On Trademarks, Service Marks and Appellations of Origin of Goods" (1999) (the "Trademark Law").

   A trademark is granted protection if it is registered in the State Trademark Register of Kazakhstan as prescribed by the Trademark Law. According to that law, registration of a trademark is evidenced by a trademark registration certificate issued by the Committee for Intellectual Property Rights under the Ministry of Justice of the Republic of Kazakhstan (the "CIPR"). Trademarks are registered in relation to specific classes of goods or services under the NICE Classification; and protection is granted only in respect of goods and services listed in the registration certificate and strictly to the extent of the relevant class. The right to a trademark may also be protected without registration in Kazakhstan under applicable international treaties to which Kazakhstan is a party. The owner of a trademark has the exclusive right to use and dispose of the trademark and to prohibit any unauthorized use thereof by third parties.

   The Trademark Law prohibits unauthorized use of confusingly similar trademarks or designations of homogeneous goods used in economic transactions in the Republic of Kazakhstan, including their use:

   on goods, labels, or packages that were produced, offered for sale, sold, demonstrated at exhibitions and fairs, or otherwise used in economic transactions, including their storage and transportation for the aforementioned purposes, or on the goods brought into the Republic of Kazakhstan for resale; in respect of execution of works and provision of services; in documentation; in offers of goods; and on the Internet. Characterization of counterfeit goods and parallel imports from the perspective of violation of trademark rights.

   According to the established interpretation of the relevant Kazakh laws, bringing into, and selling in, Kazakhstan counterfeit goods1 is a violation of trademark rights.

   As regards parallel imports, we note that the applicable Kazakh laws do not regulate the principle of exhaustion of rights to trademarks at all. Moreover, until January 2012, Kazakh government and judicial authorities interpreted the gap in the applicable laws regarding the principle of exhaustion of rights to trademarks as non-prohibition of parallel imports.

   In January 2012, Russia, Belarus, and Kazakhstan entered into the Agreement on Common Principles of Regulation in Safeguarding and Protection of Intellectual Property Rights in the Customs Union (Moscow, December 09, 2010) (the "Agreement").

   The Agreement, in particular, provides that there is no violation of rights to a trademark if the relevant item of goods was legitimately made part of civil transactions in the Customs Union member states personally by the trademark owner or other persons with the owner's consent. Hence, a regional principle of exhaustion of rights to exclusive rights to trademarks was introduced in Kazakhstan in 2012 by the relevant laws. According to the principle, using a trademark in respect of the goods that were legitimately made part of civil transactions in the Customs Union does not constitute violation of the exclusive right to that trademark.

   However, despite the provisions of the Agreement, the current situation demonstrates that there is no established clear-cut interpretation of the relevant Kazakh laws treating parallel imports as a violation of trademark owners' rights.

   Moreover, Professor T.E. Kaudyrov, an expert in intellectual property rights, believes that parallel imports do not violate trademark owners' rights. According to him, the rights to a trademark may be considered "exhausted" after the relevant item of goods was first sold (made part of economic transactions) abroad. Therefore, since the item of goods was legitimately sold to the importer abroad before being brought into Kazakhstan, the rights of the trademark owner were "exhausted" as a result of the sale and cannot be violated by bringing the goods to Kazakhstan. Regretfully, this "international exhaustion of rights" approach was used when adjudicating certain cases (the 2010 Chivas Regal case).

   The databases of court decisions that are open to general public (which, we note, contain only a limited number of court decisions made) include (in addition to the Chivas Regal case) several cases trying to ascertain whether or not parallel imports violate trademark owners' rights. The conclusions made by the judges are not quite consistent.

   At the same time, note should be made that both cases dealt with non-standard situations. Namely, in the case prohibiting parallel imports all of the goods were damaged and their import obviously undermined the reputation of the trademark owner (the 2005 Hyundai case).

   In the other case, the court based its decision not to allow the claimant to destroy the 'parallel import' goods on, among other things, the fact that the claimant groundlessly demanded that the goods were destroyed as counterfeit goods. The court also found that the claimant did not enter into a license agreement with the trademark owner and that the claimant was not even entitled to file the claim. The court, however, held that since the importer did not import or offer the trademark "as a designation" but imported the goods that were original and were legitimately acquired by the importer aboard, the claimant's rights to the trademark were not violated (the 2009 Hennessy case).

   In the 2008 Martini case and the 2009 BAYLEYS case, both seeking prohibition of illegal importation by the defenders of goods under the aforementioned trademarks into Kazakhstan, the Specialized Interdistrict Economic Court also dismissed the claims.

   All in all, according to the information available to us, most of the civil (economic) courts hold the view that parallel imports do not violate trademark rights.

   Finally, we note that illegal use of trademarks may also be regarded from the unlawful competition viewpoint. Namely, the Law of the Republic of Kazakhstan "On Competition", qualifies a sale of goods that involves illegal use of registered trademarks of a legal entity or illegal use of a designation similar to such trademarks as unfair competition. At the same time, there is no established practice in Kazakhstan for resolving issues related to preventing the dissemination of counterfeit goods or parallel imports in the context of antitrust violations.

2. MECHANISM TO DETECT TRADEMARK CONTAINING GOODS IMPORTED INTO KAZAKHSTAN

   The major role in notifying the trademark owner containing goods imported into Kazakhstan play the customs authorities.

   In particular, the customs authorities maintain a register of persons who hold rights to using the trademarks registered in Kazakhstan or in the Customs Union and take measures to prevent violation of trademark rights.

   Therefore, for the purpose of protecting the trademark rights they should also be included in the customs register of intellectual property items maintained by the customs authorities (articles 436, 438, and 439 of the Customs Code of the Republic of Kazakhstan) (the "Customs Register of Intellectual Property Items").

   As regards the measures protecting the trademark owners' rights, the customs authorities may, as...