In modern conditions, cases of illegal use of the trademark by distributors without the consent of the copyright holder are common. Consent to the promotion of goods under the brand of a foreign rightholder, under the distribution agreement, is not considered to be the consent of the rightholder for filing of the application for registration of a trademark in the name of the distributor.
Thus, it is possible to promote and sell goods under a foreign brand, but only the rightholder can register a trademark.
Currently, there is a proliferation of offenses of these norms, which prohibit distributors from registering a trademark, the norms are written in the following regulatory provisions:
- The Law of the Republic of Kazakhstan "On Trademarks, Service Marks, Geographical Indications and Appellations of Origin of Goods" in subparagraphs1 of paragraph 1 of Article 7 "Designations are not subject to registration as trademarks if they are identical or confusingly similar: 1) with trademarks registered in the Republic of Kazakhstan and protected by virtue of international treaties with an earlier priority in the name of another person in respect of similar goods or services or with identical trademarks of the same person in respect of the same goods or services, with the exception of trademarks, registration of which is held invalid or terminated in accordance with Chapter 6 ofthis Law";
- 6-septies of the Paris Convention, "if an agent or a representative of the proprietor of a mark in one of the countries of the Paris Union applies for the registration of that mark in his own name in one or more such countries without the permission of the proprietor, the proprietor shall have the right to demand its cancellation."
There are two main categories of violators: bona fide, which assume that, having a distribution agreement, they have the right to register a trademark in the territory of Kazakhstan, while not delving into the laws of the Republic of Kazakhstan, and mala fide distributors who still register trademarks for products imported into Kazakhstan, knowing that the right to register belongs only to the rightholder.
This problem was aggravated due to the implemented new requirements of the largest marketplaces operating in the territory of the Republic of Kazakhstan, which from December last year imposed restrictions on sellers, according to which marketplaces obliged sellers to register trademarks and confirm the authenticity of their products. In this regard, the registration of trademarks by distributors has become an urgent problem in the market of Kazakhstan.
With the above rule, which prohibits such actions, distributors, being aware of the offenses, continue to register trademarks, since the National Institute of Intellectual Property is not able to check and calculate the actual and official trademark owners due to the lack of a single database.
How can the rightholder contest the decision of NIIP?
The rightholder has the right to defend its rights and legitimate interests infringed by the unlawful registration of a trademark by filing an objection with the Board of Appeal and within the framework of judicial regulation.
- Filing an objection: according to paragraph 4 of Article 23 of the Law "On Trademarks, Service Marks, Geographical Indications and Appellations of Origin of Goods", an objection to the registration of a trademark must be considered by the Board of Appeal within six months from the date of its receipt. The person who filed the objection as well as the owner (rightholder) of the trademark, have the right to participate in the consideration of the dispute.
Consideration of the objection: the Board of Appeal shall consider the objection and collects evidence from both parties – the rightholder and the distributor. In the process of consideration, hearings and interviews of witnesses can be held as well as the evidence submitted by the parties can be examined.
Determination of the legality of registration: the Board of Appeal shall decide on the legality or illegality of a trademark registration by the distributor. This decision can be appealed in accordance with the procedure established by the law.
- Judicial proceedings: According to paragraph 9 of Article 41-2 of this Law, the decision taken by the Boad of Appeal may be appealed to the court.
- Results and possible consequences: as a result of contesting the illegal registration of trademarks, a decision may be made to invalidate the registration, deprive the distributor of the rights to use the trademark or other measures provided for by the laws of the Republic of Kazakhstan. The rightholder may also claim compensation for losses incurred as a result of illegal registration.
How can a trademark be used without violating the laws of the Republic of Kazakhstan?
The only legal way to use a trademark in accordance with the laws of the Republic of Kazakhstan without violating the rights of the rightholder is to conclude a license agreement with the rightholder.
The license agreement for the use of the trademark is subject to mandatory registration with the Ministry of Justice of the Republic of Kazakhstan, otherwise such an agreement will be invalid.
Actions to be taken by the parties for the purpose of lawful use or transfer of means of individualization.
- To begin with, it is necessary to make sure that the trademark is actually registered in the territory of Kazakhstan or protected here by virtue of international treaties and belongs to the rightholder with whom the party intends to conclude a license agreement.
- The owner of the trademark (licensor) and the interested person (licensee) shall conclude a license agreement.
The license agreement for the use of the trademark must contain a mandatory condition that the quality of the goods or services will not be lower than the quality of the goods and services of the licensor, and that the licensor has the right to monitor the fulfillment of this condition.
In order to determine the correct taxation, it will be more appropriate to indicate that the license agreement is reimbursable, that is the licensee shall pay the licensor a fee for the use of its trademark, for example, in the form of royalties.
The license agreement shall enter into force from the date of its registration with the authorized body, so payment of royalties can be made only from that date.
Materials for registration of the license agreement must be submitted to the Office no later than six months from the date of the agreement execution.
Other conditions for use of the licensor's trademarks by the licensee sare optional, although there are still some mandatory requirements for drawing up of documents.
The standard simple license agreement for the use of a trademark can be found on the website of the Patent and Trademark Office kazpatent.kz. In conclusion, under modern conditions there is a proliferation of illegal use and registration of trademarks by distributors without the consent of rightholders. The distribution agreement and consent to the promotion of products under a foreign brand are not grounds for registration of a trademark in the name of the distributor. However, many distributors do not comply with the prohibitions established by the laws of the Republic of Kazakhstan, which leads to illegal registration of trademarks. This problem is complicated by the requirements of large marketplaces, which oblige sellers to register trademarks and prove the authenticity of products. Due to the lack of a database capable of verifying the original trademark owners, it becomes difficult for rightholders to contest the decisions of the National Institute of Intellectual Property (NIIP).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
