Invention Patents: Understanding Subject Matter and Patentability



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Inventions and technical solutions related to products, methods, and operations that exhibit a sufficient level of inventiveness and are applicable to production are recognized as inventions. These innovations can be protected by patents, granting inventors exclusive rights to their creations.

What Makes an Invention “New”?

A technical solution is considered “new” if it is not part of the prior art. The prior art encompasses all publicly available knowledge and disclosures relevant to the invention. Specifically, prior art includes:

  1. Published Solutions or Knowledge: Information that has been published, used, or disclosed—whether orally, in writing, or in any other form—in Mongolia or abroad before the filing date or priority date of the invention.
  2. Previously Filed Inventions: Inventions or utility models filed in Mongolia by other parties before the filing or priority date, provided these were subsequently published in official periodicals and patented.

Exceptions to “Newness” Criteria

An invention will not lose its status as “new” if, within 12 months before the filing date, the inventor or someone who directly or indirectly obtained the information made it public without the applicant’s consent. In such cases, the burden of proof rests on the applicant to demonstrate the circumstances of the disclosure.

Inventive Step

An invention is deemed to involve an inventive step if it provides a clear and significant advancement beyond the prior art. A person skilled in the field should recognize the innovation’s distinct advantages compared to previously known solutions. When assessing the inventive step, the provisions of Article 5.3 of the relevant law do not apply to prior art evaluation.

Industrial Applicability

An invention is considered industrially applicable if it can be produced or utilized in any industry. This ensures that the innovation has practical value and can contribute to economic or technological development.

Conclusion

Understanding the criteria for invention patents is crucial for innovators seeking legal protection for their ideas. By meeting the requirements of novelty, inventive step, and industrial applicability, inventors can secure patents that safeguard their contributions and promote technological progress.

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Understanding the Examination Process for Trademark Applications



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Navigating the trademark application process can feel daunting, but understanding each step can make it smoother. Here’s a breakdown of the procedure, as outlined by the State Administrative Authority in accordance with the Law on Trademarks and Geographical Indications.

The process begins with the examination of the completeness of your application. The authority checks if all required documents are in order and establishes the initial filing date. Therefore, the State Administrative Authority examines the completeness of the trademark application and establishes the initial filing date in accordance with the Law on Trademarks and Geographical Indications. Afterward, the authority evaluates whether the trademark meets the legal requirements and provides a conclusion.

The State Administrative Authority conducts this examination within nine months of the initial filing date. If deemed necessary, this period may be extended by up to six months.

If the trademark is found to meet the legal requirements, the State Administrative Authority issues a conclusion to that effect and, based on it, decides to register the trademark in the state registry.

If the trademark is found not to meet the legal requirements, the authority issues a conclusion to that effect and makes a preliminary decision to refuse the registration, notifying the applicant accordingly in written.

If the applicant disagrees with the preliminary decision to refuse registration, they must submit a reasoned response to the State Administrative Authority within three months of receiving the decision. If the applicant has valid reasons, they may request an extension of up to three months, subject to payment of service fees.

The State Administrative Authority makes a final decision on whether to register the trademark within three months of receiving the applicant’s response.

If the applicant fails to provide a response within the prescribed period, the administrative authority makes a final decision to refuse the registration and notifies the applicant in written.

During the examination, the applicant may introduce changes to the application, except for altering the trademark itself. If adding new goods or services to the classification, a new application must be submitted.

The applicant may also separate an application covering multiple classes of goods or services into individual applications during the examination process.

Interested parties may file an opposition to the trademark application within three months of its initial publication, in accordance with the Law on Trademarks and Geographical Indications. This period may be extended by up to two months upon request, subject to payment of service fees.

The applicant may submit responses or counterarguments to the State Administrative Authority directly or through an intellectual property representative specified in the Article 16.2 of the Law on Intellectual Property.

The State Administrative Authority delivers notifications to the applicant either in paper form or electronically.

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Understanding the Right to Obtain a Patent



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When it comes to protecting intellectual property, obtaining a patent is a crucial step. But who has the right to claim this protection? Here’s a breakdown of key points regarding patent rights, as well as the process for filing a patent application.

Who Has the Right to a Patent?

The inventor of an invention or utility model—or the individuals or legal entities to whom the inventor transfers their rights—is entitled to obtain a patent. However, the specifics can vary depending on the circumstances:

  1. Workplace Creations:
    If an invention or utility model is created in the wrokplace, the right to obtain the patent belongs to the employer.
  2. Agreements and Contracts:
    In cases where inventions or utility models are developed under specific agreements, the rights to the patent are typically granted to the subscriber or financer, unless stated otherwise in the contract.
  3. Joint Creations:
    When an invention or utility model is created collaboratively, the right to the patent is shared jointly among the creators. However, those who merely provided technical, organizational, or financial support—or assisted in the patent application process—are not considered co-creators.
  4. Independent, Identical Inventions:
    If two individuals independently create identical inventions or utility models, the right to the patent is awarded to the person who submits their application first.

How to File a Patent Application

The process for filing a patent application involves several important steps:

  • Submission of Application:
    The inventor—or the individual or entity that has obtained the inventor’s rights—must submit a patent application to the intellectual property organization. This can be done either in paper or electronic form.
  • Representation Through an Agent:
    Applicants may choose to work with an intellectual property agent to assist in filing their application. For foreign citizens, stateless individuals, or foreign entities that are not permanently based in Mongolia, representation through an intellectual property agent is mandatory.
  • Separate Applications:
    A separate application must be filed for each invention or utility model. However, if two or more inventions or utility models serve a single purpose and are used together as a unit, they may be included in a single application.

Understanding your rights and responsibilities when it comes to patents is essential for protecting your innovations. Whether you’re an individual inventor, a company, or a collaborative team, ensuring proper filing and adherence to legal requirements will help safeguard your intellectual property effectively.

Have questions about the patent application process or your rights? Our law firm’s certified intellectual property representatives will provide you professional advice and guidance.

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Record of Changes in the State registration of Trademark



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In accordance with the Law on Trademarks and Geographical Indications, several changes can be made to the state registration of a trademark at the request of the trademark owner. These changes are important for ensuring that the trademark records are up to date and reflect any changes in ownership, validity, or other details.

Types of Changes to the Trademark Registration:

  1. Renewal of the Registration Validity Period
    Trademark owners can request a renewal of the registration validity period to extend the protection of their trademark.
  2. Change of Trademark Owner’s Name and Address
    If there is a change in the trademark owner’s name or address, the new details must be updated in the trademark register.
  3. Transfer of Trademark Ownership Rights
    If the ownership of the trademark is transferred, the new owner’s details must be recorded in the state register.
  4. Removal of Items from the Goods and Services List
    The trademark owner may request to remove certain goods or services from the registered list of goods and services associated with the trademark.

Process for Requesting Changes

  • Renewal of Registration Validity
    A request for renewal must be submitted to the relevant government authority either during the last year of the registration’s validity or within six months after the registration expires, during the grace period. Please note that renewing the registration validity will not involve changes to the trademark itself or the addition of new items to the goods and services list.
  • Notification of Changes in Owner Details or Rights
    If the trademark owner changes their name or address, or if there is a transfer of ownership, the trademark owner must notify the relevant government authority in writing or electronically. This notification must occur within six months of the change. Once the notification is received, the change will be recorded in the state trademark register.
  • Public Announcement
    After the changes are made to the trademark register, the government authority will publicly announce these changes through official periodic publications.
  • Service Fees
    There will be a service fee associated with requests for an extension of the registration validity period, changes to the trademark owner’s name or address, or the transfer of trademark rights. These fees are required to process the changes in the state register.

Conclusion

Keeping the state trademark register up to date is essential for trademark owners to maintain the legal protection of their marks. By understanding the procedures for renewing registration, changing ownership details, transferring rights, and updating the goods and services list, trademark owners can ensure their intellectual property rights remain valid and protected.

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Digital Origin Certificates for Exports from Mongolia to Japan



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The Economic Partnership Agreement (EPA) between Mongolia and Japan came into effect in 2016, with implementation starting on June 7, 2016. This agreement aims to boost trade, investment, and industrial sector exports, while also increasing foreign currency earnings between the two nations. The EPA focuses on reducing tariff and non-tariff barriers, facilitating trade, and simplifying customs procedures for smoother transactions.

Under the agreement, both countries negotiated a reduction in import customs tariffs for a wide range of goods. Mongolia will benefit from a reduction on 59% of the imported goods, which includes around 3,429 types of products across 97 categories. On the other hand, Japan has agreed to lower tariffs on 86% of the goods imported from Mongolia, covering approximately 8,000 types of goods. These tariff reductions came into effect as soon as the agreement was implemented.

To further streamline the export process, Mongolia will now digitize the origin certificates for goods being exported to Japan. According to the Mongolian National Chamber of Commerce and Industry (MNCCI), starting from May 7, 2025, exporters will receive their origin certificates electronically in PDF format. This move is part of an ongoing effort to improve the efficiency and convenience of trade between the two nations.

With this transition to digital certificates, Mongolia and Japan continue to strengthen their economic relationship, creating new opportunities for businesses in both countries.

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Tax Incentives for Businesses Operating in Free Zones in Mongolia: What You Need to Know



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Are you considering investing in a free zone? The benefits can go beyond logistical advantages—there are tax incentives you might be eligible for, depending on the nature of your business and your investment scale. Let’s explore the opportunities outlined in the Corporate Income Tax Law and how they can work for you.

What Are Free Zones?

Free zones are designated areas where businesses can operate under special regulations designed to encourage investment, innovation, and trade. To support economic development, many governments offer tax reliefs to incentivize investments in infrastructure and key facilities within these zones.

Tax Relief: How It Works

Under Article 22.5 of the Corporate Income Tax Law, businesses operating in free zones can enjoy significant tax breaks if they meet one of the following conditions:

1. Investing in Free Zone Infrastructure

If your business has invested $500,000 USD or more in critical infrastructure, such as:

  • Energy and heating systems
  • Pipelines and clean water supply
  • Sewage systems
  • Roads, railways, or airports
  • Communication networkss

Then, 50% of the income you earn from the free zone—equal to the amount of your investment—will be exempt from corporate income tax.

2. Investing in Specific Free Zone Facilities

If your investment focuses on constructing or developing:

  • Warehouses
  • Loading and unloading terminals
  • Hotels or tourism complexes
  • Factories producing export-oriented or import-substituting products

And your investment totals $300,000 USD or more, you’re also eligible for a tax break. Similar to infrastructure investments, 50% of your income from the free zone—up to the value of your investment—is exempt from corporate income tax.

Beyond the tax incentives, free zones offer:

  • Easier access to global markets
  • Streamlined customs procedures
  • Modern infrastructure tailored for business operations
  • Networking opportunities with like-minded entrepreneurs

These advantages make free zones a hotspot for businesses aiming to expand regionally or globally while optimizing costs.

Amendments to the Corporate Income Tax (CIT) Law: Social Responsibility Tax Relief Explained



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As part of its ongoing efforts to encourage corporate social responsibility (CSR), the Mongolian government has introduced significant amendments to the Corporate Income Tax (CIT) Law. Effective from August 30, 2024, these provisions allow businesses to claim tax relief for specific activities that benefit society, the environment, and public welfare. Here’s a breakdown of the new tax relief opportunities available under section 22.9 of the law.

Key Highlights of the Tax Relief Provisions

Under these amendments, businesses can deduct certain expenses from their taxable income as part of their social responsibility initiatives. These expenses must align with the law’s stipulations and are subject to the following conditions:

  • The expenses must be unrelated to the taxpayer’s income-generating operations.
  • Deductions include investments in depreciable fixed assets, financial support for unrelated entities, and charitable contributions.
  • The total deduction is capped at 1% of the taxable income for the relevant tax year.

Activities Eligible for Tax Relief

To qualify for this tax benefit, businesses must invest in one or more of the following activities:

  1. Environmental Conservation
    • Initiatives aimed at reducing pollution, restoring ecosystems, and protecting natural resources.
  2. Care for Vulnerable Groups
    • Supporting senior citizens, individuals with disabilities, and children through care facilities and programs.
  3. Cultural Heritage and the Arts
    • Projects that protect and restore cultural sites, or provide support to museums, libraries, and artistic endeavors.
  4. Public Infrastructure Development
    • Funding and maintaining essential infrastructure such as parks, roads, and public transportation systems.
  5. Sports Development
    • Building and maintaining sports facilities or supporting athletes participating in Olympic-level competitions.
  6. Education and Scholarships
    • Providing scholarships for students and funding educational institutions to enhance learning opportunities.
  7. Research and Development
    • Supporting innovation through grants to universities and scientific organizations.

To ensure transparency and alignment with the law, businesses must adhere to reporting standards set by relevant government ministries. These ministries will also establish guidelines to verify compliance with the eligibility criteria for tax relief.

The amendments are applicable from August 30, 2024, and will remain in effect until January 1, 2035. Businesses planning to take advantage of this tax relief must carefully document and report eligible expenses to qualify.

Conclusion

The revised CIT law provides a dual benefit—encouraging businesses to engage in socially responsible activities while easing their tax burden. By aligning corporate operations with these initiatives, companies can contribute to the broader development of society, culture, and the environment.

If you’re a business owner or finance professional, now is the time to explore how your organization can benefit from these provisions while making a positive impact.

Importance of Conducting a Preliminary Trademark Search



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The process of securing intellectual property rights for a brand name or logo often takes more time than anticipated. Receiving a preliminary decision to reject your trademark registration 6-9 months after filing is not the outcome you desire. Such a situation can lead to complications, including having to change your product or service’s brand name, logo, packaging, or advertising content.

Why are trademark applications rejected?

If you intend to register your trademark with the Intellectual Property Office to secure exclusive rights, it’s important to comply with not only international agreements and conventions but also the requirements outlined in Article 5 of the Law on Trademarks and Geographical Indications.

What are the requirements?

A trademark may be rejected if it:

· Directly describes the goods or services;

· Indicates the characteristics of the goods or services;

· Specifies the origin or place of manufacture of the goods or services;

· Is identical or similar to a previously filed or registered trademark.

Therefore,

Before filing your brand name or logo, the face of your business, with the Intellectual Property Office, it is advisable to conduct a preliminary search to ensure it complies with legal requirements and does not closely resemble existing trademarks.

Important note!

If your brand name is expressed in a foreign language, it is necessary to conduct searches not only using the primary word but also translations, transliterations, and phonetically similar variations. Additionally, check whether translations might inadvertently include inappropriate or offensive term.

Benefits of a preliminary search

· Prevents receiving a preliminary decision to reject your trademark application due to the reasons mentioned above.

· Avoids the risk of unintentionally infringing someone else’s exclusive rights, thereby protecting you from unforeseen legal liabilities and costs.

By conducting a preliminary trademark search, you can mitigate risks and ensure compliance with regulations. Our law firm, with experienced intellectual property lawyers, is ready to assist you in carrying out professional trademark searches tailored to your needs.

The Essential Guide to Legal Entity Liquidation in Mongolia: What Every Business Owner Should Know



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Liquidation is an inevitable process for businesses winding down operations, and understanding how it works in Mongolia is crucial for any business owner. The country’s legal framework is designed to ensure that liquidation is transparent, orderly, and fair for all stakeholders involved. In this blog post, we will delve into the key aspects of legal entity liquidation in Mongolia, including the types of liquidation and the necessary steps in the process.

Types of Liquidation

In Mongolia, liquidation is primarily categorized into two types:

  1. Voluntary Liquidation: This occurs when the owners or shareholders decide to close the business. Reasons for voluntary liquidation may include financial difficulties, shifts in market conditions, or a strategic pivot to other ventures.
  2. Involuntary Liquidation: Initiated by creditors or the court, this type occurs when a company cannot pay its debts. This often arises from bankruptcy, where the company’s liabilities exceed its assets.

The Liquidation Process

The liquidation process in Mongolia generally follows these key steps:

  1. Decision to Liquidate: For voluntary liquidation, the shareholders must formally resolve to liquidate the company, documenting this decision in the meeting minutes.
  2. Appointment of Liquidators: Qualified liquidators are appointed to oversee the process, including settling debts, selling assets, and distributing remaining funds to shareholders.
  3. Notification: The company must notify relevant authorities, such as the State Registration Office and tax authorities, ensuring compliance with legal obligations and informing creditors of the impending liquidation.
  4. Asset Valuation and Sale: Liquidators assess and determine the market value of the company’s assets, which are then sold to pay off creditors. Maximizing asset value is critical during this step.
  5. Settling Debts: Liquidators prioritize debt settlement according to legal obligations, usually paying secured creditors first, followed by unsecured creditors. If funds are insufficient, creditors receive a pro-rata share based on amounts owed.
  6. Final Distribution: After all debts are settled, any remaining funds are distributed among shareholders according to their ownership interests in the company.
  7. Deregistration: The final step involves deregistering the company from the State Registration Office, officially marking the end of the company’s existence in Mongolia.

Understanding these processes is vital for business owners contemplating liquidation. With the right knowledge and guidance, you can navigate the complexities of legal entity liquidation effectively.

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“How to Account for Free Inventory Under IAS 2: A Step-by-Step Guide”



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When it comes to receiving free inventory, the accounting treatment can be tricky. Whether you’re receiving assets from a government body, suppliers, or shareholders, understanding the correct International Accounting Standard (IAS) to apply is crucial. This guide will explain how to record free inventory, particularly under IAS 2, and how other IAS rules, such as IAS 20 for government grants, may apply.

Free Inventory: Different Sources, Different Accounting

  1. Free Assets from the Government: If your company receives assets as part of a government grant, these are accounted for under IAS 20 (Government Grants and Government Assistance), not IAS 2. This applies to grants from any governmental entity, whether local, national, or international bodies like the IMF, World Bank, or UN. The assets received must be disclosed according to the specific conditions of the grant, and the valuation process must adhere to IAS 20’s rules.
  2. Free Assets from a Supplier: When free assets are received from a supplier, such as spare parts in a purchase contract, they are considered a form of discount under IAS 16 (Property, Plant, and Equipment). The fair value of the free assets must be deducted from the total purchase price, effectively lowering the cost of the purchased inventory.
  3. Free Assets from Shareholders: Shareholders may transfer assets like machinery or land to the company for free. In this case, IAS 2 and IAS 16 require that these assets be recognized at fair value. However, these contributions should not be recorded as income. Instead, they are reflected as capital contributions under the equity section of the balance sheet.

Practical Application

  • Government Grants: Recorded under IAS 20, and recognized as either deferred income or deducted from the carrying amount of the related asset.
  • Supplier Discounts: Recorded as part of the purchase cost reduction, adhering to IAS 2 or IAS 16.
  • Shareholder Contributions: Recognized as capital contributions, not income, and added to the fixed asset account at fair value.

Key Journal Entries for Free Inventory

  • Debit: Fixed assets (Fair value of the asset)
  • Credit: Equity/Other income (Capital contribution)

This ensures the correct accounting treatment, aligning with IAS standards and providing accurate financial reporting.

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