Tag Archives: Intellectual Property

Procedures for Investigating Trademark Infringement



Posted by ,

The procedures for addressing trademark infringement in Mongolia are regulated by the Law on Infringement Procedure and by the Criminal Code of Mongolia. Detailed information on the legal measures to be taken in cases of infringement, their related dates and the practical challenges will be further addressed in the next article.

As mentioned in our previous blog, the penalty for infringement of a trademark is set out in the Law of Infringement or Criminal Code of Mongolia depending on the amount of the damage and loss actually caused. It is critical in any trademark infringement action to take steps to prove that the damage caused by the trademark violation exceeds 300,000 MNT (~$115), in order to initiate a criminal investigation by the police.

With today’s article, we will briefly introduce the Law on Infringement Procedure of Mongolia (the Law). The Law sets out rules and procedures for potential infringement investigation and penalty, starting from the initial inquiry of a potential infringement case. The Law also sets rules for the prosecutor’s supervision of the investigation process and results and procedures for dispute settlement at the court.

Pursuant to the Article 6.14 of the Law, the state officer for intellectual property shall be responsible for matters related to the intellectual property, in particular trademark infringement. The authorized inspector shall carry out the inquiry into the alleged the infringement case upon the receipt of the complaint and information about the trademark infringement. Upon receiving a complaint, the inspector shall decide whether to initiate the infringement case. based on the claims and evidence provided. After the investigation is complete, the authorized official shall make the decision on whether to terminate the case without penalty, or to impose penalties

Prosecutor has an oversight role and may invalidate the decision to terminate the infringement case in instances where it is determined that the infringement case has an element of a crime or it is obvious that infringement has occurred. If the prosecutor decides that the matter has an element of crime, he/she shall prosecute the infringer as defendant.

Where infringement of a trademark is found, the infringer shall execute the imposed penalties within 15 days after the receipt of the decision. Should the infringer disagree with the decision and imposed penalties, there is an opportunity for appeal. 

Even though the violation of the intellectual property in Mongolia is a common practice, most violations are investigated as trademark “infringement” under the Law, and not as a crime. As the penalties for such infringement violations are relatively low and the investigation procedure is not reliable, the occurrence of such violations is not effectively deterred. Such persistent infringement causes challenge and burden both to the intellectual property owners and the respective authorities.

We will take a look at criminal investigation procedure next week.

Penalty for Trademark Infringement



Posted by ,

This article aims to give an overview concerning the trademark infringement in Mongolia and the difference between the infringement and the crime. Pursuant to Article 12.3 of the Law on Trademarks and Geographical Indications of Mongolia, a trademark owner is entitled to exclusive ownership, usage rights, and legal right to demand cessation of unauthorized use, along with monetary damages in compensation for infringing use.

In Mongolia, the violation of trademark ownership rights is addressed in both the Law of Infringement and the Criminal Code of Mongolia, meaning trademark infringement may carry both civil and criminal penalties. As described below, the sanctions set out in these laws differ and the infringement of the trademark owner rights is relatively low compared to the crime:

According to the Law on Infringement, violation of a trademark owners legal rights may result in seizure of property and profits related to the infringement, closure of the infringing operations, and compensation of damages to the trademark owner. Individual’s involved in the infringement may be fined up to 300,000 MNT (USD ~$115) while companies may be fined up to 3,000,000 MNT (~$1150)

If damages caused by infringement are found to be greater than $300,000 MNT (~$115) the matter may be investigated as a crime. Where infringement may be considered a crime, the penalty may include imprisonment for up to 1 year, mobility restrictions, community service requirements, or fines up to 5,400,000 MNT (~$2070). These penalties may be increased if it is found the infringement was coordinated by an “organized criminal group”.

The amount of the loss/damages for the breach of industrial property rights may be proven by means of following common methods:

  1. On the basis of the possible revenue amount that the eligible industrial property right owner could have made
  2. On the basis of the amount of the licensing contract, in case the trademark owner would have used the trademark upon the conclusion of a licensing contract with the trademark owner.

The procedure on addressing the trademark infringement in Mongolia is a subject of regulation by the Law on Infringement procedure and the Criminal Code of Mongolia. The detailed information on the legal measures to be taken, their related dates and the practical challenges will be further addressed in the next article.

Trademarks vs Trade Names: Key Distinctions



Posted by , ,

In our previous article we mentioned that although trade names and trademarks sound similar, they have completely different legal implications. In this article we will discuss about legal implications of registering a trademark.

A trademark is a more significant step identified with establishing brand recognition in the marketplace. A trademark can be associated with, or part of, your trade name, and can be used to provide legal protection for the use of names, logos, symbols, words, phrases, slogans, or other designs that help customers identify your company.

A trademark requires separate registration from a trade name. You must register your trademark with the state authority in charge of intellectual property matters. The registration of a trademark guarantees a business the exclusive use of the trademark, establishes legally that the trademark was not already being used by any other business entity or person prior to your registration of it and provides official government protection from any other business subsequently infringing on your registered trademark. In other words, when you register your trademark, you hold several legal rights. You are the only one allowed to use, copy, profit from, distribute the registered trademark, and no other company or person can use that trademark. This process also establishes your ownership of the trademark as a unique and protected element of your business. Your trade name might also be included in the trademark that now has that legal protection. If any other person or company tries to use something similar, you have the right to take legal action. It also provides legal liability protection against someone subsequently claiming that you are infringing on a previously registered trademark.

In registering a trademark, you or your business can directly register the trademark, or you can choose to have a licensed intellectual property agent (IP agent) do it for you. Having an IP agent handle the registration provides an extra layer of insurance that the registration is done properly and completely, and that a thorough investigation has been conducted verifying that the trademark has not been previously registered by any other person or company.

Trademarks vs Trade Names: Differences You Should Know



Posted by , ,

When starting a business, there is often some confusion about the registration of business name, in particular confusion between trade names and trademarks. The terms “trade name” and “trademark” sound similar, but it is important for business owners – especially those just starting businesses – to know the difference. Selecting and registering trade names and trademarks is an important part of establishing a brand presence and recognition in the marketplace for a company and its products, so it’s a process that should be considered carefully.

A trade name is your company’s official name under which it does business. A trademark protects the intellectual property of a business. Trademark may include logos, symbols, words, phrases, slogans, or other designs that help customers identify your company. Trademark can also be associated with your trade name. When consumers look for products and services, they often rely on the trademarks to find the items they want. An important reason to distinguish between trade names and trademarks is that if a business starts to use its trade name to identify products and services, it could be perceived that the trade name is now functioning as a trademark, which could potentially infringe on existing trademarks.

Trade name

Registering your company’s trade name is much simpler than registering for a trademark but doesn’t offer the same legal protection. It only serves as the official name of your company. You need to register your company’s trade name with the state registration authority as soon as you decide to incorporate a company. When you do so, your company will gain recognition as a legal entity. The registration process also makes it legal for your company to enter into contracts and participate in other legal forms of business. The practical function of registering a trade name is primarily for administrative and accounting purposes, such as filing taxes, issuing pay to employees, setting up websites and other online presences, advertising, and product packaging, etc. Registration requirements for trade names are really geared more toward making the tax authorities aware of your business than they are toward providing any substantial brand name protection. However, even though registering a trade name does not provide legal protection in the way that registering a trademark does, selecting a trade name should still be done thoughtfully, as it is the initial step in establishing an identity for your company in the marketplace.

Revised Rules of Dispute Resolution Committee of the Intellectual Property Office of Mongolia Comes into Force (Part 2)



Posted by ,

In continuation of our previous article we will continue to highlight and discuss about new regulations provided for in revised Rules of Dispute Resolution Committee (Committee).

Pursuant to new Rules chairman of the Committee shall preside hearings. In his absence a member of the Committee, who was appointed by chairman of the Committee to temporarily perform his duties, shall preside the hearings. Hearings shall be valid upon participation by majority of members of the Committee. Chairman, secretary and members of the Committee shall participate in hearings with the right to make and carry out decisions, and Head of IPOM may participate in hearings with the right to advise. In such case members of the Committee must hear out and take into consideration suggestions and comments of Head of IPOM regarding the case. Under new Rules Secretary of the Committee has new additional duties, such as coordinating internal affairs of the Committee, taking preparation measures for hearings, and keeping records of hearings.

Pursuant to old Rules the Committee issued two types of decisions: conclusion and resolution. Under new Rules the Committee shall issue only resolution. Issued resolution shall be delivered to Head of IPOM within 7 days from date of issuance, and Head of IPOM shall approve the resolution with his/her order within 3 days. If Head of IPOM deems that there are no grounds to approve the resolution, he/she will send an explanation to the Committee in writing. The Committee shall discuss such explanation at hearing and carry out one of following decisions: if agrees with such explanation – shall revise/amend the resolution, if disagrees with such explanation – shall re-deliver the resolution as is to Head of IPOM for approval. The resolution shall come into force when chairman of the Committee reads it out at hearing.

New Rules include new regulations, such as competence and rights of the Committee, rights and duties of participants of dispute resolution case, grounds to challenge a member(s) of the Committee from dispute resolution case. In case if a member(s) of the Committee is challenged and due to this the hearing becomes invalid, Head of IPOM shall appoint new members of Committee to resolve such specific case.

Revised Rules of Dispute Resolution Committee of the Intellectual Property Office of Mongolia come into force (part 1)



Posted by , ,

In 2018 the Government of Mongolia has adopted a new revised structure of government agencies, pursuant to which General Authority for Intellectual property and State registration has divided into two separate agencies, General Authority for State registration and Intellectual Property Office of Mongolia, with their own separate functions. Due to this division Intellectual Property Office of Mongolia (IPOM) has started to renew its internal structure and some rules and regulations, in particular Rules of Dispute Resolution Committee. In connection with this, activities of Dispute Resolution Committee of IPOM have been suspended sine die.

On February 13th, 2019 by the order of the Minister of Justice and Home affairs No. A/26 a revised Rules of Dispute Resolution Committee (Committee) of IPOM was adopted and new members of the Committee were appointed. In this article we will highlight main differences between old and new Rules of the Committee and new additions to the Rules.

Pursuant to old Rules chairman and secretary of the Committee were appointed by the Head of IPOM, and members of the Committee were appointed every time when a decision to initiate a dispute resolution case was carried out. And number of members to be appointed were not specified. Pursuant to new Rules the Committee is a non-permanent division and will consist of 11 regular members. By the order of the Minister of Justice and Home affairs No. A/26 dated February 13th, 2019 regular members of the Committee were appointed, and the Committee consists of chairman, secretary and 9 members. The Committee is distinctive because it now includes not only IPOM specialists and inspectors, but also specialist from Ministry of Justice and Home affairs, law school professor and IPOM researcher.

Under new Rules the Committee shall not accept and resolve disputes regarding claims for incurred damages and claims of compensation (payment) for using protected invention as specified in paragraph 28.1 of Article 28 of Law on Patents. Whereas under old Rules the Committee did not resolve requests to recognize the trademark is a well-known trademark, as specified in paragraph 32.1.4 of Article 32 of Law on Trademarks and Geographical indications, now under new Rules it is possible to submit such requests to the Committee.

Under old Rules requests and complaints were submitted in writing to the Committee, and chairman of the Committee carried out a decision whether to initiate a dispute resolution case or not within 14 days from date of submission. Pursuant to new Rules requests and complaints are submitted in writing to chairman of the Committee. Chairman of the Committee shall transfer requests and complaints to one of the members of the Committee for review within 5 business days from date of submission. The member of the Committee shall review and present his/her suggestions and comments to chairman of the Committee within 10 business days from date of receipt. Chairman of the Committee based on suggestions and comments of the member of the Committee shall carry out a decision whether to initiate a dispute resolution case or not.

Before, dispute resolution cases were resolved within 6 months as specified in Law on Patents and Law on Trademarks and Geographical indications, whereas now this period has significantly shortened. New Rules provide for that dispute resolution cases must be resolved within 30 days from date of decision to initiate a case is carried out, and if additional procedures and measures are necessary then this period may be extended once for up to 30 days by chairman of the Committee.

Mongolia is Introducing E-Filing System for Intellectual Property



Posted by ,

The Mongolian Government’s Action Plan for 2016-2020 aims that the state functions have been introduced the online system for establishing reliable, accessible and express public services based on paperless services. The most ultimate source is that the article 8 of Patent law sets forth the filing an electronic application for invention, industrial design or innovation.

 

In April 26, 2018 as the World Intellectual Property Day, IPOM publish (Online Data system) and E-Filing (Online Filing System) were introduced for developing the use of the intellectual property database and facilitating the filing process for IP rights.

 

Above-mentioned systems allow to register the invention electronically and obtain electronic information on patents and trademarks.

 

In today’s highly developed IT platform, the filing electronic application for IP rights and the obtaining of patent information for the research work are an important part of saving time and paper. Furthermore, the researchers, inventors and producers are able to find the similar researches with their research work in online Intellectual Property database. It will definitely helpful to develop more competitive way of creating the inventions as well as avoiding any risks in the future.

Issues with Effective IP Enforcement Actions in Mongolia



Posted by , , ,

Several clients in recent months have contacted the firm requesting assistance in tracking down and stopping intellectual property infringers in Mongolia. After working closely on many of these cases, our Mongolian Attorneys and licensed Intellectual Property specialists are among the forefront of the Mongolian IP enforcement practice in Mongolia. Our team has a few key insights that those doing business in Mongolia should be aware of.

In Mongolia, the systems for investigation and resolution of IP infringement issues is relatively unsophisticated. IP infringement cases often are not able to be resolved or punished effectively due to a lack in the number of state inspectors and the resulting workload for those inspectors who are on the job. Only a few State Inspectors handle IP issues, and such inspectors are obliged to inspect shops or markets selling infringing goods throughout Ulaanbaatar in accordance with the specific demands of each case. It is often very difficult for the state inspectors to identify possible infringers. State inspectors will normally punish known infringers identified during an IP enforcement action by warnings, confiscation of infringing goods, and fines for repeat offenses. General lack of education in Mongolia account IP and the limited effectiveness of such examinations result in infringing products for which sales have been shut down at a particular market showing up again for sale elsewhere at a different shop or different market.

Another problem is that the estimation of intangible asset related damages caused by IP infringement is not clear and is not well defined or regulated under law. Though the law says such damages will be settled under applicable regulations and administrative acts, regulation applicable to estimation of intangible asset related damages caused by IP infringement is unclear in Mongolia. The complaint regarding intangible asset associated damages cannot be resolved properly under such procedure. In fact, it is very few cases which filed complaint concerning the said infringement with IP office and there is no good practice on this issue.

The Mongolian government needs to pay attention on eliminating violations of intellectual property rights and properly compensating damages caused by IP infringement.  Those seeking effective IP enforcement in Mongolia need to come prepared with a large amount of investigation preformed and research compiled ready to be presented in a complaint to the IP Office, and should have a clearly documented and easily calculatable claim for damages caused due to the alleged infringement.

 

New Law Needed to Protect Internet Domain Names as Intellectual Property



Posted by ,

Many companies wish to utilize a national top level domain in their online “URL” to indicate that the company, and products or services offered are local to a specific country. For example, a Mongolian company may utilize “.mn” to indicate to the world it is based in Mongolia, while an international company may establish a separate “.mn” website to target the Mongolia market.

Datacom LLC, a Mongolian company, holds the right to issue “.mn” domain name and has been doing so since 1996. Also, Erdemnet issues “edu.mn” domain name for educational organizations and National Data Center issues “gov.mn” domain name for government organizations.

Currently, there is a domain name registration system operated by the the National Data Center. However, there are many violations of the domain registration process because there is no legislation regarding registration and use of domain names in Mongolia. Many in the Mongolia IT sector have advocated for such a law as it is required to establish the legal basis for registering, possessing and using domain names. Having such law is also critical to avoid and mitigate potential for intellectual property rights infringement.

Illegal circulation of intellectual property in the internet or electronic environment is widespread. In particular, copyright ingringement, namely the music and film are widely copied illegally and available online.

Both the General Authority for Intellectual Property and the State Registration and Communications Regulatory Commission of Mongolia fight againt the copyright’s infringement in the internet and have authority to shut down the domain names which are found to use or make available intellectual property without constant of the owners. However, there is a continous cycle in which a site which finds it’s domain name shut-down quickly re-openeds and posts copyrighted contend under a new domain name. A formal domain name law would help to stop this process.

The Mongolian Parliament adopted the Resolution /No.11/, “List of Laws and Regulations need to be updated by 2020” on 12 January, 2017. According to the resolution, Law on Domain Names is scheduled to be enacted in the near future.

Franchising in Mongolia: Licensing your IP



Posted by , ,

This is the third part of our look at the uses of intellectual property in Mongolian franchises. You can find the first part here, and the second part here. We will discuss the use of licensing agreements as part of franchise IP management.

While in general, franchisors do own their intellectual property, this is not always strictly the case. In many franchise businesses, trademarks and other intellectual property elements may instead be owned by a parent company or even an affiliated company. In such cases, intellectual property is usually licensed from the legal entity that owns it to the franchisor, which then has the right to sell franchises and sub-license the use of intellectual property to the franchisees.

If the franchise agreement has been properly drafted, then this licensing/sub-licensing relationship between parent company or affiliated entity and the franchisor will be reflected in the wording of the agreement. There are quite a few places in a franchise agreement where special care must be given to properly set out who actually owns trademarks and other intellectual property if the franchisor itself is not their owner.

Pursuant to the Law on Trademarks and Geographical Indications, any licensing agreement is subject to state registration with intellectual property authority, otherwise such licensing agreement is deemed invalid.

Whenever someone uses, without permission, a trademark (sometimes even a trade dress) that is the same as or confusingly similar to that of a franchise system, that is a case of trademark infringement. It is becoming increasingly common to find the look, feel and design of one franchise business being copied elsewhere. In some of these cases, there is clearly an intent to pass off the copycat operation as a franchise.

A strong franchise system depends on a strong brand and must therefore protect its trademarks, copyrights, trade secrets and trade dress. For these reasons, franchisors need to spend a lot of time, attention and money to maintain, improve and protect their intellectual property. Their franchisees, in turn, will benefit from a strong protection strategy, as it ensures the rights for which they have paid, over the stated term.