5 Aug
2019

Seven counterfeit hotspots that you must be aware of in Kazakhstan

In the next edition of our series highlighting the physical marketplaces that reportedly engage in the trade of counterfeit goods, we turn our attention to the locations in Kazakhstan that brand owners should have on their policing radar.

As a Central Asian country with a population of 18 million, Kazakstan is an important global trading hub. It’s also a nation that’s been transforming its IP ecosystem to address the problem of fake goods. Last year, the country’s new trademark law introduced a number of significant changes. One was that the concept of ‘counterfeit goods’, which was previously absent from the legislation, was expressly introduced into law. On top of that, it clarified that such goods should be “subject to removal from the market and destruction”.

These changes follow significant issues with fakes in the country. In 2018, Kazakh authorities reportedly seized over 260,000 units of counterfeit goods – and the modified law could see that number rise further.  With that in mind, we reached out to the IP investigations and anti-counterfeiting team at BMF Research and Bolotov and Partners to enquire about the counterfeit considerations and physical marketplaces in Kazakhstan that brand owners should be aware of.

In a nutshell, what should rights holders know about enforcing against counterfeit goods in Kazakhstan?

First of all, it is worth knowing that if you are not registered, that means you are not protected (with two main exceptions: know-how and copyrights). From a trademark perspective, these facts are also worth remembering:

  • Kazakhstan is a ‘first to file’, not a ‘first to use’, jurisdiction;
  • All transactions with registered IP items in Kazakhstan are subject to registration; for example, assignment of rights, licenses, pledges;
  • Trademarks should be used, otherwise they will be vulnerable for deregistration;

When it comes to enforcing against fakes, then, there are other key considerations worth noting:

  • In Kazakhstan, it is a requirement to obtain as many details as possible about an infringer; with the minimum being: name, full and exact address, and business identification number (tax number);
  • It is advisable to have a comparison table describing the difference between a counterfeit and a genuine product;
  • The rights holder shall issue a power of attorney which must be notarised and apostilled;
  • A customs register exists in Kazakhstan, and brand owners are advised to include their trademarks into it;
  • Customs are required to prove that trademark rights have been already infringed somewhere in the territory of Eurasian Economic Union, and for that purpose they request a court decision from a relevant country;
  • There are civil, administrative and criminal liabilities for infringement of IP rights, and various types of sanctions apply to infringers;
  • The approximate minimum cost to conduct an administrative action is $1,700, and that includes a check of an infringer by an independent investigator, arrangement for a raid action together with state officers, and seizure of the goods;
  • In practice, the most effective in enforcing IP rights in Kazakhstan are civil courts (for civil cases), Justice Departments (for administrative cases), and customs (for administrative cases connected with customs detentions). On the other hand, financial police (criminal case), police (criminal cases on copyright and related rights), and the antimonopoly agency (administrative cases on unfair competition) are not considered effective.

Does landlord liability exist in Kazakhstan?

Normally no, but some are ready to cooperate and assist in actions against infringers located in properties owned by them. The same is the case with the publishers of advertisements. In practice, though, it is very difficult to enlist cooperation from landlords with infringers and most often it is not possible at all.

Are there any local dedicated anti-counterfeiting associations or organizations in Kazakhstan?

To the best of our knowledge, there are two such associations in Kazakhstan: the Association of Trademark Holders and KazBrand. However, both of them have been dormant for several years, so we can say that – in practical terms – there are none. However, for that reason our company is developing a project (Report KONTRAFAKT) to address this gap (‘kontrafakt’ is the word for counterfeit in Russian but written in Latin letters).

Counterfeit hotspots you should know in the Kazakhstan:

There are a number of counterfeit threat areas in Kazakhstan, spread across the entire country.

Aqbulaq

Location: An open-air market located in the country’s largest metropolis area, Almaty (map link)

Counterfeit risk factor: Very high

Fakes know to be sold there: Mostly fashion fakes, including clothes (including brands Louis Vuitton, Chanel, Dior, Prada, Gucci, D&G), footwear (Louis Vuitton, Chanel, Dior, Prada, Gucci, Hermes, Adidas, Puma, Reebok) and bags (eg, Louis Vuitton, Chanel, Dior, Prada, MIU MIU, Gucci, Hermes, Michael Kors, Yves Saint Laurent, Fendi, Philipp Plein, Chloe, D&G, Victoria’s Secret).

Photos from this marketplace: View images from inside the Aqbulaq building, bags, and accessories.

Recommendations to brand owners: We recommend more raids are carried out.

 

Yalan

Location: An open-air market and trade center in Almaty (map link)

Risk factor: Very high

Fakes know to be sold there: Both fashion and technology fakes, including bags (eg, Louis Vuitton, Chanel, Dior, Prada, MIU MIU, Gucci, Hermes, Michael Kors, Yves Saint Laurent, Fendi, Philipp Plein, Chloe, D&G, Victoria’s Secret), perfume (eg, Chanel, D&G, Gucci, Carolina Herrera), accessories (eg, Chanel, Pandora, Swarovski, Tiffany & Co) and charging devices (eg, HP, Asus, Apple, Lenovo)

Photos from this marketplace: Image of bags sold at Yalan market.

Recommendations: Again, more raids are needed.

 

Barys

Location: An open-air market in Almary (map link)

Risk factor: Very high

Fakes know to be sold there: Household chemicals, personal care products, and alcohol products.

Challenges: Administration of the market assists the infringers and tries to cover their business.

Recommendations: Make a set of rather big test purchases in order to get into contact with the infringers and obtain their details, which are required for enforcement actions.

 

Adem

Location: A trade center in Almaty (map link).

Risk factor: High

Fakes know to be sold there: Mostly fashion fakes are sold here, including clothing (eg, Louis Vuitton, Chanel, Dior, Prada, Gucci, D&G), footwear (eg, Louis Vuitton, Chanel, Dior, Prada, Gucci, Hermes, Adidas, Puma, Reebok), bags (eg, Louis Vuitton, Chanel, Dior, Prada, MIU MIU, Gucci, Hermes, Michael Kors, Yves Saint Laurent, Fendi, Philipp Plein, Chloe, D&G, Victoria’s Secret) and accessories (eg, Chanel, Pandora, Swarovski, Tiffany & Co).

Photos from this marketplace: Images of bags, shoes, and one Adem store.

Recommendations: More raid actions.

 

Passage

Location: A trade center in Almaty (map link).

Risk factor: High

Fakes know to be sold there: Fashion brands are most affected, including those that sell clothes (eg, Louis Vuitton, Chanel, Dior, Prada, Gucci, D&G), shoes (eg, Louis Vuitton, Chanel, Dior, Prada, Gucci, Hermes, Adidas, Puma, Reebok) and bags (eg, Louis Vuitton, Chanel, Dior, Prada, MIU MIU, Gucci, Hermes, Michael Kors, Yves Saint Laurent, Fendi, Philipp Plein, Chloe, D&G, Victoria’s Secret).

Photos from this marketplace: Image from outside the marketplace and inside one store.

Recommendations: More raids need to be conducted.

 

Car City

Location: A trade center in Almary (map link).

Risk factor: High

Fakes know to be sold there: Unsurprisingly from the name, mostly fake car parts, including auto parts (including from such brands as Toyota and Lexus), engine oil (eg, Mobil) and car alarms (eg, StarLine).

Recommendations: More raid actions.

 

Student Cellular Center

Location: Near Atakent Mall in Almaty (map link).

Risk factor: High

Fakes know to be sold there: Most are related to phones, including fake mobile phones, electronics and accessories.

Recommendations to brand owners: As with other marketplaces we have identified, more raids are required.

 

Read the previous articles from this series below:

Tim Lince

Senior reporter | World Trademark Review

[email protected]

London