Kazakhstan - Recently the State has been taking significant steps to attract foreign investment into the country, including through changes in the legislation. Interested NGOs, representatives of foreign investors in Kazakhstan—the European Business Association of Kazakhstan (EUROBAK) and the American Chamber of Commerce (AmCham)—and patent attorneys repeatedly have brought up the point that legislative acts of the Republic of Kazakhstan need to be amended to reduce the amount of time it takes to register a trademark; to simplify the procedure for transferring the rights to IP; and to make the regulation in general more “user-friendly” for titleholders. As a result, the Law on Amendments to Some Legislative Acts of the Republic of Kazakhstan on the Issues of Legal Regulation in the Area of Intellectual Property (the “Law”) was signed by the President of the Republic of Kazakhstan on 7 April 2015.  The Law came into effect on 20 April 2015. Below are the most significant amendments introduced by the Law regarding trademarks.

Exhaustion of rights and parallel import

The Trademark Law now establishes a regional principle of exhaustion of trademark rights.  This change is related to the harmonization of the national legislation with the provisions of the Agreement on the Eurasian Economic Union (EAEU).  The regional principle of exhaustion of rights means that a number of actions in respect of a product, which has been lawfully introduced into civil circulation in the territory of the member states of EAEU by the holder of the title to a trademark or upon its consent, is not an infringement of the exclusive right to that trademark.  Prior to the adoption of the amendments, the Trademark Law provided for the national principle of exhaustion of rights, which was contrary to the obligations of the Republic of Kazakhstan in the framework of the EAEU Agreement.  The regional (as well as the national) principle of exhaustion of rights means that parallel import into the territory of the EAEU is impossible, but it deprives the holder of the title to the trademark of the right to further control the distribution of the product in its territory.

Please note that on 11 March 2015, at the meeting of the Working Group of the Eurasian Economic Commission on the issue of exhaustion of rights, it was proposed to develop exceptions from the regional principle of exhaustion of trademark rights for certain categories of goods in the territory of the EAEU.  In case of the adoption of the said amendments, in exceptional cases the international principle of exhaustion of rights will be in effect and parallel import of goods into the territory of the EAEU will be allowed.  According to some media, parallel import will be allowed in respect of pharmaceuticals, medical products and automotive parts.

Simplified registration of assignment and licensing agreements

The Singapore Treaty on the Laws on Trademarks 2006 came into force for the Republic of Kazakhstan on 5 September 2012.  The Singapore Treaty allows for simplified procedures for amending trademark registrations, registering trademarks, licensing agreements and assignment agreements as well as for trademark renewal and some other procedures.  In practice, however, there have been difficulties in the application of the Singapore Treaty thus far: the expert organization referred to the fact that the rules of the Singapore Treaty had not yet been implemented into the national legislation.

Currently the Trademark Law provides that expert examination and registration of agreements on transfer of trademark rights (assignment and licensing agreements) must be carried out in accordance with the provisions of the Singapore Treaty, if one of the parties to the agreement is an individual or a legal entity of a foreign state party to the Singapore Treaty.  We note that if both parties to the agreement on the transfer of rights to a trademark are Kazakhstan persons, the rules of the Singapore Treaty do not apply.

The Singapore Treaty rules prohibit requesting provision of the assignment/ licensing agreement itself or its translation and specification of the financial terms of the agreement.  Therefore registration of license agreements must now be carried out on the basis of an application with the specification of the parties to the license agreement, the scope of the transferred rights and other information.  However, the expert organization may require provision of evidence in respect of any specification contained in the application.  Such documents are:

  1. an extract of the license contract indicating the parties and the rights being licensed, certified by a notary public or any other competent public authority as being a true extract of the contract; or
  2. an uncertified statement of license, the content of which corresponds to the statement of license form, provided for in the Regulations, and signed by both the holder and the licensee.

The Law does not address the issue of the possibility of direct application of other provisions of the Singapore Treaty, which do not relate to the registration of the assignment and licensing agreements. 

As a whole, the introduced amendments regarding the application of the Singapore Treaty are progressive and consider the interests of titleholders with respect to reducing and simplifying various registration procedures with the State authorities.  However, it is too soon to assert that these comfortable conditions have been created for business.  The Singapore Treaty provides some freedom to patent agencies in determining a list of documents which may be requested from titleholders during registration.  Only the practice of the expert organization and the authorized body will show to what extent the interests of titleholders are respected.

Abolishment of issue of certificates of registration of a trademark

After the entry of the Law into force, registration certificates will no longer be issued to trademark owners, and the exclusive right to a trademark will be recorded by an entry of the registration in the State Register of Trademarks of the Republic of Kazakhstan and will be confirmed by an extract from such Register.

Simplification of the procedure for transfer of the right for obtaining a trademark

From the date the Law enters into force, applicants will have the right to apply for assignment of a trademark application without executing and registering an assignment agreement.  Instead, they will be able to apply to the expert organization.  Previously, in order to assign a trademark application, it was necessary to execute and register an assignment agreement. 

Reduction of the timing of the trademarks registration

The Law establishes the timeframes for all stages of the examination of the application for registration of a trademark, details the timing of the approval of preliminary and final expert opinions by the Ministry of Justice of the Republic of Kazakhstan, the timing of the delivery of such opinions to the applicants.  This amendment is significant and will contribute to the reduction of the period of registration of trademarks.

Change in the list of absolute grounds for refusal in trademark registration

Once again the list of absolute grounds for refusal in trademark registration has been changed.  The registration formerly would have been refused if a trademark consisted exclusively of designations which are non-distinctive and constitute international unpatentable names of pharmaceuticals (e.g., amoxicillin, ampicillin).  Such basis as direct associative connection with the goods or services for the designation of which the trademark is used has been excluded from the list of absolute grounds.  Previously, the existence of those absolute grounds precluded the registration of practically any trademarks that, to some extent, could be associated with the applied goods and/ or services.

Mandatory registration of a franchising agreement

The Civil Code establishes a rule for the mandatory State registration of a franchising agreement.  It specifically states that franchising agreements are subject to registration in the part of the intellectual property items, the exclusive right to which arises from the moment of their registration (inventions, utility models, industrial designs, selection achievements, trademarks and integrated circuit topographies, if they were registered).  Earlier, the Franchising Law established that an agreement must be executed in a simple written form.  The provisions on the registration of a licensing agreement will apply to the procedure for the registration of franchising agreements.