Tag Archives: Intellectual Property

Trademarks vs Trade Names: Differences You Should Know



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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)



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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)



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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



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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



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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



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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



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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.

Franchising in Mongolia: Intellectual Property is More than Trademarks



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In the first part of this series we have discussed about trademarks as part of franchise system. In this part we will discuss about other elements of intellectual property that may be utilized in franchise system.

Other critical element of intellectual property in franchise systems are copyrights. Pursuant to law copyright protects the fixation of the expression of an idea in a tangible form, whether written, verbal, graphical or other objective forms. Copyright exists in a variety of items commonly used by a franchise: training videos, marketing material, ads, websites, music, logos and software. There is significant value to the copyright-protected materials incorporated into a franchise system and, like trademarks, these elements are licensed by the franchisor to the franchisee for use in the franchised business. And, unlike trademarks, copyrights do not have to be registered in order to be protected.

Trade dress is what makes a franchise system unique and distinctive from others, including the overall visual look, feel and impression of a location. Some part of trade dress may be protected by copyrights.

Not all franchises involve trade secrets (i.e. confidential information), but it is typical to see franchise systems maintaining some aspects of their operations as strictly confidential and maintained as trade secrets. In Mongolia there is no law that regulates specifically trade secrets or business aspects of trade secrets. However pursuant to Law on Corporate secret, any corporate information, document, research, method, solution, project and etc. which holds economic value may be considered confidential corporate secret (trade secret) and may be protected from divulgence. In the context of the franchise arrangement, the need and desire to share information with franchisees competes with the legal necessity of limiting the distribution of true trade secret material. Reasonable steps to ensure the identification and protectability of trade secrets include: confidentiality or non-disclosure agreements and clauses; marking of claimed trade secret material, limiting the distribution to “need to know”, password protected computer systems and databases, and locks on cabinets and doors. In some cases, a franchisor’s trade secrets are not even divulged to the franchisee, such as the specific recipes or bulk ingredients required to create a quick-service restaurant chain’s signature sauces.

Patents are usually not included in franchise systems, but they can be. Patent registrations are intended to protect an inventor’s rights to specific inventions, such as a newly engineered product, medical device, drug or other innovation. Unless a franchise system has specifically developed its own equipment, it generally will not include any patents within its intellectual property.

It is very important for franchisor, as well as franchisee, to take the time to fully analyze and review any franchise agreement, disclosure document and respective attachments before signing them. While the above information serves as a general overview, as always, one should seek their own legal advice when reviewing a franchise agreement. Only then it is possible to obtain specific information and recommendations relevant to particular circumstances.

Establishing a Mongolian Franchise Business: Protect Your Intellectual Property



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In a recent blog post we discussed the franchise business model and it’s rapid growth in Mongolia. In a new three-part article series, we will dive deeper into franchise agreements in Mongolia and look at intellectual property, which is one of the most important aspects of a franchise system, and its importance.

Intellectual property law and business law have many areas that overlap. Franchising, in particular, is a unique business model, with the franchisor’s intellectual property at its core.

As such, intellectual property is one of the most important elements of any franchise. Within the franchise agreement, one of the core assets and rights that franchisor will be granting to franchisees will be a license permitting a franchisee to utilize their intellectual property and, in turn, franchisor is declaring to a franchisee that franchisor owns the intellectual property and will protect and defend it. So, it is important for franchisor to make sure that they actually own and can protect intellectual property that they are purportedly licensing to franchisees. Especially, when entering into a franchise agreement with franchisee, who will operate in another country.

These days most people are familiar with the term “intellectual property”, but not everyone understands the differences between various types of it. Intellectual property may include trademarks, copyrights, trade secrets, trade dress (i.e. the look, feel and distinctive elements of a franchise system, such as the interior design, layout and other visual aspects of a franchise location) and sometimes patents under which franchise businesses operate.

Trademarks are perhaps the most commonly recognized and well-known element of intellectual property. The Mongolia Law on Trademarks and Geographical Indications defines trademarks as expressions with distinction, which are used by legal entity or individual in order to distinguish their products or services from that of others. Trademarks can include business names, taglines, service names, logo designs and specific color or color combinations, etc. They are among the visual components of a franchise business.

Just because franchisor has used their trademark for many years it does not mean that trademark is legally protectable nor that they own it. First, franchisor needs to properly register their trademark with intellectual property authority. Secondly, if franchisor is entering into franchise agreement with franchisee, who will operate in another country, franchisor needs to register their trademark in the country where franchisee will operate as well. This way franchisor asserts their ownership of trademark and ensures protection of their trademark from other infringers (such as copycats and confusingly similar marks).

Using Customs Seizure to Stop Import of Infringing Products to Mongolia



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Our firm’s Mongolian intellectual property lawyers have seen a lot of inquires in recent months from clients seeking assistance regarding counterfeit products which were being sold in Mongolia.

There are several mechanisms our Mongolian lawyers recommend to deal with counterfeit products in Mongolia.  One of the most important of these is utilizing Customs to restrict entry of counterfeit products or goods infringing registered trademarks from entering Mongolia.

This works by seizing infringing goods at Customs upon attempted entry into Mongolia. Before this may be done, the authentic goods bearing a validly registered Mongolian Trademark must be registered with Customs.

This registration process is relatively easy, requiring documentation of the registered trademarks, basic information regarding the trademark owner, a description of the products, and a list of items requested to be reviewed and protected by Customs. Our Mongolian lawyers will walk you through the process. The review procedure will talk approximately 30 days from the date of submission of the application, after which, the registered information will be forwarded to Customs entry points around Mongolia.

A written request for seizure of infringing goods, must be submitted along with a small cash deposit or bank guarantee. The customs office prefers having the deposit to avoid incurring any damages to importer before starting examination of infringing goods based on the original goods with customs registration.

Our Mongolian lawyers and clients have found such Customs seizures to be effective at blocking incoming shipments of infringing products. However it is important to note the applicant seeking to block the shipments must have a valid, registered Mongolian trademark in order to support such action by Customs.