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 KAZAKHSTAN International Business Magazine №3, 2006
 Intellectual Property: What You Need to Know
Intellectual Property: What You Need to Know
Aizhan Yessergepova, Lawyer, GRATA Law Firm
Quite often we see on TV or follow radio reports on infringements of lawful intellectual property holders’ rights. At the same time, specializing in the sphere of intellectual property (IP) protection you often face situations where inventors, authors of creative products or the owners of popular brands do not fully understand their rights and what profit they could make if they register their rights in accordance with the law. Therefore in this article we would like to provide information on what every IP owner should know.
Firstly, an author’s right to the created product arises by virtue of the fact of its creation. Certainly the product should be documented elsewhere as well: on paper, on disc, etc. Secondly, the registration of an IP object (copyright) is not imperative. However, in our opinion when creating a product with the purpose of further commercial profit, it is better to take advantage of the rights provided by law to register such a copyright object. As a result, you will have a document confirming your right, which may become the object of various transactions and contracts. It is also important to note that the fact of creating a product or document confirming the right for an intellectual property object will be valid not only in the Republic of Kazakhstan, but also in countries participating in the Bern Convention of July 24, 1971. Although the Bern Convention does not stipulate any confirming document for a copyright, an applicant willing to receive documentary acknowledgement of his rights may register the product in any separate state which is a party to the Convention.
The technical decision of an inventor (invention, utility model or industrial design) can be protected by a patent or in certain cases by a preliminary patent and then a patent. Depending on the type of industrial property of your product, the law provides various terms of validity for such security documents. Preliminary patents for invention or an industrial design are issued by the competent authority – the Committee for Intellectual Property Rights of the Ministry of Justice of the Republic of Kazakhstan – for the period of five years without carrying out a substantial examination. Patents for an invention and industrial design are issued after carrying out a substantial examination. The patent is issued with a renewal right and is valid for an invention - 20 years, for an industrial design – 10 years and utility model – 5 years. At the same time the patent for a utility model is issued as a consequence of formal examination, without carrying out a substantial examination. There are special requirements for inventions: in order to obtain a patent for a certain object, the object should meet the requirements of novelty, industrial applicability and inventive level. It means that the object of the industrial property subject to protection should not be known from the data of technical level and also may be used in industry, agriculture or other fields of activity. In other words, the main requirement of the invention is inventive level and to the industrial design – originality of the technical decision. These characteristics are the most complicated as they must answer the question: "to what extent does this invention or industrial design advance a technical idea in this area of techniques or design?"
The most widespread and actively registered IP objects are the trademark and the service mark. The difference between these two   is that the trademark is used with goods and service mark is used for services. With the development of market relations as well as competition, entrepreneurs have realized the necessity of investing in "promoting" their designations. Sometimes the term "brand" is used, and in most cases this term coincides with the term "trademark". However it is necessary to remember that the term “brand” can also mean a legally unprotected trademark. Therefore one should register a label as a trademark in order to keep it secure and to make stable profit from such a "promoted" label used on goods or services. Despite the drawn-out process procedure of trademark registration (12 months according to the law), the result is worth it. A Trademark Certificate is issued for a term of 10 years with the right to renewal it for another 10 years. An exclusive right for a trademark may be legally used de jure - from the moment of entering trademark information into a State Register of Trademarks, de facto - from the moment of issuing a trademark certificate.
All IP objects can be the subject of agreements/contracts on rights transfer on an onerous basis. There are three ways of transferring IP objects rights: assignment agreement, license agreement and its special form – franchising.
A licence agreement is an agreement of temporary transfer of rights to a third party. Under this agreement, the licensee (the receiving party) is given an exclusive or non-exclusive licence but the quality of products produced by the licensee should not be lower than the quality of the licensor.
An agreement on assignment of rights, in contrast to a licence agreement, stipulates the full transfer of a set of exclusive rights to use the object transferred.
Under a franchise agreement, the receiving party (franchisee) receives a complex entrepreneur’s license, which includes not only the IP objects but also the entire structure of the business itself. A franchising agreement (franchise) is less widespread in Kazakhstan than the other two types of IP rights transfer. However, nowadays it is increasing popularity among Kazakh entrepreneurs.
It is necessary to note that the obligatory condition for validity of a licence agreement and assignment agreement is their registration with the competent authority. As for a franchise agreement – there is no provision provided by the law to register it. Therefore we consider that there should be a legal provision to obligatory registration of a franchise agreement in the Committee on Intellectual Property Rights. This is linked to the fact that part of franchising is based on a set of exclusive rights and registration would prevent deception of the consumers about the producer of a product. In other words, this role is played by such IP objects as firm name and trademark.
In conclusion we would like to add that irrespective of the type of IP object, a security document issued by the Competent Authority confirms the exclusive rights of its holder and guarantees a monopoly to use and dispose of a created product.
*The English text of the article was provided by the author.

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