As it is known, labeling products with designations, which demonstrate naturalness of products and origin thereof, is a marketing tool that is widely used both by manufacturing companies and distributor organizations, and even sometimes by companies, which specialize in the service industry.

One of the most widespread designations being used for these purposes are word elements "BIO ", "ECO" and "ORGANIC" that is confirmed by the large range of products in distribution networks and by a plurality of registered trademarks in the Republic of Kazakhstan, which were registered according to the national and international procedure.

However, since January 2017, due to amendments to a law-enforcement practice of the RK Law No. 423-V "On Manufacture of Organic Products" as of November 27, 2015 at a departmental level, registration order of the trademark applications, which contain the above-stated designations, experienced essential changes. Moreover, current approach for interpretation of legislative rules in this field causes not only changes in approaches for trademark registration, but also potential risks, including, for example, a possibility of invalidation of existing trademarks, which were registered by owners before using the new approach by state authorities, particularly, by Ministry of Justice of the RK, and by the RSE "NIIP" subordinated thereto.

Until recently, registration of the trademarks, which contain the word elements "BIO", "ECO" and "ORGANIC", has been carried out in the following way: a trademark that comprises the word elements "BIO", "ECO" or "ORGANIC" has been generally granted a legal protection, but excluding the said word elements from the protection (i.e., “disclaimer”). It is caused by the fact that these word elements were under a statutory ground that excludes registration of a trademark in Kazakhstan, specifically, as designations, which indicate type, quality, quantity, property, purpose, value of goods, as well as a place and time of production or sale thereof, that is provided by Art. 6 of the Law of the RK "On Trademarks, Service Marks and Geographical Indications".

However, recently the situation changed, and now in order to register a trademark comprising the word elements "BIO", "ECO" or "ORGANIC" the applicant should have an approval from an authorized state authority that products labeled with such trademark is indeed "ecological", "biological" or "organic".

The subject of the present article is not a critical analysis of the current approaches in trademarks examination procedure, however it should not go unnoticed that in some cases the above-mentioned situation can put applicants/right owners of trademarks in a difficult position, because in some cases at the time of filing the application/registration of the trademark, concerned parties may not yet have samples of finished product to be labeled by the registered trademark that results in impossibility of provding of a document confirming organic nature of a product, the document being issued by the authorized body (Ministry of Agriculture of the RK). Moreover, acquisition of exclusive trademark rights does not cause and imply that the owner has an obligation to use this trademark on goods and products, for which it has been registered. For example, the owner can include the trademark to charter capital (fund) of a commercial organization (limited liability partnership, etc.), assign the right of using the trademark to a third party being a direct manufacturer of products by execution of a license agreement or just to star to produce or sale goods under a particular trademark only upon several years after trademark registration.

However, the current situation requires applicants and their representatives, including patent attorneys, to take corresponding pro-active measures to collect necessary documents preceding filing a trademark application in Kazakhstan.

Order of forwarding the decisions of the expert organization (RSE "NIIP") comprising a disclaimer of certain word elements to the applicant has been also changed. While earlier such preliminary decision being already approved by the authorized body (Ministry of Justice of the RK) has been forwarded to the applicant, nowadays the authorized body approves only a final decision on the basis of receiving consent with such disclaimer from the applicant.
In view of this, during obtaining a decision of the expert organization, which comprises a disclaimer of the word elements “BIO”, “ECO” and “ORGANIC” and in case of agreement therewith, it is necessary to forward a corresponding request and to wait for a final decision approved by the authorized body. Only thereafter it would be possible to make payment of registration fees.

Abidance of the above-mentioned order of actions is extremely important, since there occurred some cases when after making payment of fees the registration fees on the basis of a decision of the expert organization on the registration of a trademark with a disclaimer of any word element ("BIO", "ECO" and "ORGANIC"), the authorized body, instead of issuing a final positive decision on the registration of the trademark with a disclaimer of separate elements thereof, has completely refused for the registration thereof. At the same time, the applicant completely loses the right to appeal such decision by forwarding an objection to the expert organization, and has to carry out restoration of his right, i.e. to appeal the decision by applying to the Board of Appeal of the Ministry of Justice of the RK that, of course, time consuming and burdensome.

Considering importance of the changes mentioned in this article for representatives of a business community, we (Legalmax Law Firm) has initiated a corresponding legal action addressed to Minister of Justice of the RK, with a request to provide a clarification about an official position and to comment their approach to the issues touched upon in the article. The present article has been prepared on basis of analysis and compilation of the response information.

Of course, in spite of all the above-stated, the current situation raises many questions, in particular:
- what should expect the owners of the trademarks comprising the word elements "bio", "eco" or "organic", which are already registered in Kazakhstan?
- does the new order for notifying the applicant with regard to a decision with a disclaimer refer to all designations or only to the designations containing "bio", "eco" and "organic" word elements?
- could the applicant appeal similar refusals in the RSE "NIIP" by forwarding an opposition?

We believe that we may clarify answers and form a new practice in the nearest future. However, even nowadays, we recommend right holders of trademarks containing the word elements "BIO", "ECO" and "ORGANIC" to take the whole complex of necessary measures for obtaining corresponding documents associated with the agreement of the Ministry of Agriculture of the RK with regard to referral of their products/goods to "organic" category. Lack of the latter may be an essential ground for invalidation of the trademarks according to the terms of items 1 and 2 of Article 23 of the RK Law "On Trademarks, Service Marks and Geographical Indications".

Zhanna Abylkhanova
Senior Associate, Patent Attorney of the RK
Legalmax Law Firm

Kazakhstan

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