Kazakhstan, bordering with China on the South and with Russia on the North and being the Central Asian leader in natural resources and industry, for many companies is a gateway for business in other Central Asian Republics, such as Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. Kazakhstan roughly equal in size to five states of France is a valuable potential key player in world oil and gas markets, it is a major world source of coal, copper, iron ore, chromium, magnesium, lead, zinc, silver, and uranium and has notable reserves of gold, molybdenum, titanium, and others.
In various cases intellectual property ("IP") is one of the most important areas for initial entering the market of the region, and registration of trademarks and patents and other IP rights is a big step towards the market and wise care of company' assets even without a physical presence of the company.
Furthermore, registration of trademarks and patents is a must in these countries if your company cares about its trade name, image and IP value of its assets, as without such a registration no protection can be gained or IP rights enforced, which is often necessary in this region.
Kazakhstan is a member of Paris Convention, Madrid Agreement, PCT, and others. It has developed a system of IP rights protection, including the Patent Law, Law on Trademarks; Administrative Code and Criminal Code provide administrative and criminal liability for infringement of the IP rights. It is currently facing its domestic market abound with counterfeit goods, thus intellectual property rights require effective protection. Law enforcement bodies frequently encounter relatively good copies of the goods containing IP belonging to others, however rough fakes also exist. In this case not only IP are violated, but also the rights of consumers who purchased goods of poor quality, which may endanger their health or even life. Other frequent violations in Kazakhstan are piracy of trademarks and copyrights. While Kazakhstan legislation provides broad protection to IP, particular areas remain underdeveloped and enforcement generally remains a problem.
IP under Kazakhstani legislation, is (1) an exclusive right of an individual/company to results of intellectual creative activities and (2) means of individualization of a company, production of an individual/company, works performed or services rendered thereby (trade name, trademark, service mark, and appellation of goods origin).
An exclusive right to the result of intellectual property activity or means of individualization is a property right of its owner to use the IP object by all means and at his/her discretion. Other persons would be allowed to use exclusive rights objects only subject to the owner's consent.
Our practice in Kazakhstan and other CIS countries has shown that western companies pay very little attention to the preventive protection of their rights on the new markets, ignoring to register inventions, and more often trademarks, well in advance.
In order to protect a trademark or patent from the infringements, first of all the owner of such IP objects needs to ensure their appropriate registration. Absence of the registration can easily permit violation of the IP right.Foreign individuals or companies may apply for registration of IP objects only through a registered patent attorney (patent agent).
Owner's consent is granted by way of either a license agreement or an assignment agreement.
Pursuant to a license agreement an owner of an exclusive right to results of intellectual creative activity or means of individualization (licensor) grants to the other party (licensee) a right to temporarily use the relevant object of intellectual property.
The Intellectual Property Rights Committee of the Ministry of Justice of the Republic of Kazakhstan (the "IPR Committee" or "Kazpatent") is an authorized state agency for intellectual property matters. The IPR Committee is responsible for registration of IP objects and implementation of the state policy in relation to protection of copyrights, inventions, utility models, industrial designs and other intellectual property items; issuing copyright, patent and trademarks certificates, and recognition of marks as well-known.National Institute of Intellectual Property ("NIIP") accepts applications for issue of pa tents for inventions, utility models, industrial designs, as well as for registration of trademarks and carries out their expertise, maintains State IP Registers and arranges official publications. In Kazakhstan and some other CIS countries IP rights also enjoy protection of customs authorities, which maintain a register of goods containing IP objects. Such goods are included into such register upon applications of IP owners. Given that the customs authorities may only suspend the release of goods contained in the register and that the procedure of inclusion of the goods into the register is complicated, we note that protection of IP rights by the customs authorities is considered somewhat ineffective. However, in several cases we managed to prevent importation of counterfeit products in Kazakhstan. The term "violation of intellectual property rights" was clarified and is now defined as illegal use of copyrights, inventions, utility models, industrial designs, trademarks or appellations of origin, appropriation of copyright, etc. Violators of IP rights are subject to civil, administrative or criminal liability, depending on gravity and consequences of violation.Particularly, criminal liability is incurred for illegal use of trademark with the severest sanction being correctional labor for up to two years. Further, illegal use of inventions, utility models, industrial designs, selection achievements or topologies of integrated circuits may incur punishment with up to five-year imprisonment with confiscation of property.Similar legislation have other Central Asian Republics of the CIS. Trademarks When entering the CIS market and registering trademarks the companies need to take into account the following peculiarities. All of the CIS countries are rather "first to file", than "first to use" countries. It means that even in the case of a widely known but unregistered mark, the mark (1i) may be used by any person, and, what's more, (2) be registered by any person in his name. "Unregistered" means "unprotected". We strongly recommend registering marks in advance in any CIS country where the said marks are expected to be used or where there is a possibility of using it by any third person. It should be kept in mind that sometimes the registration procedure may last as long as two years. It should be noted that unlike in the USA and some other countries, which are a party to the Madrid Protocol, Kazakhstan and Tajikistan are parties only to the Madrid Agreement, and accordingly, American companies may only directly apply for registration of their trademarks in Kazakhstan's and Tajikistan's Patent Offices and only through the Kazakh and Tajik patent attorneys. Normally such registration of trademarks takes about 18 months. Once registered the trademark needs to be used primarily on goods and in rendering services. If a registered trademark remains unused for more than three years its registration can be cancelled, while the trademark can be taken by any interested person. Well-Known Marks The other way of protecting marks in the CIS is to have them recognized as famous and well- known. This strengthens protection and increases the value of marks, requires no their prior registration, as trademarks but is more time consuming and costly. List of well-known trademarks in Kazakhstan includes such trademarks as Coca-Cola, Fanta, Sprite and Contour Bottle belonging to the Coca-Cola Company, and several other brands of non-US companies. Trademark's recognition as well-known in Kazakhstan grants the following advantages:
- well-known mark has the same level of protection as a regular registered trademark, but for the full range of goods and services, irrespective of its initial registration or use,
- it is unnecessary to register a trademark before it's recognition as well-known,
- it is possible to prevent or terminate registration of a trademark that is identical or confusingly similar to a well-known mark with respect to any goods or services within five years of its registration,
- the owner of a well-known mark has the right to take actions against infringers, including Internet infringers, with regard to any goods and services, and
- in case of accounting trademarks in the balance sheet or its contribution into the charter capital, a well-known mark has significantly bigger value, which also allows its higher depreciation rate.
- so-called "innovative" patent which is issued for the maximal five years term from the application date and issued after formal examination of the application materials and examination of the invention for its local (Kazakhstan) novelty, and
- patent valid for 20 years from the date of application for the patent (here - "Full Patent").
- The registered and deposited object is indeed a copyright or related rights object.
- The IPR Committee has received it on the date shown in the certificate (an authorized state agency establishes a kind of priority that is a date no later which the object was created).
- The object stated in the certificate is stored at the IPR Committee and can be compared with an opposed object.
- The individuals stated in the certificate have claimed a right to the registered and deposited copyright or related rights object.
- Copyright or related rights objects can be used as collateral for the initial and subsequent public offering of securities.
- Property rights to copyright or related rights objects can be used as contribution to the charter capital of a company as intangible assets that make it possible to considerably increase the size of the charter capital. Also, copyright or related rights objects can be put in the books of a company with subsequent depreciation.
- Intellectual property objects, including copyright or related rights objects, can be used as pledge for loans.
Yuri Bolotov -The Russia/Eurasia Executive Guide, July 2008