IP infringement is no longer unfair competition in Uzbekistan
Uzbek government published a new version of the law “On Competition” in 03.07.2023, which has been a reason for numerous discussions among experts involved in the IP protection. The new version of the law comes into force on October 4th, 2023.
On the one hand, the new law introduces a number of new concepts, such as digital platform, antitrust compliance, natural monopoly, etc., but, on the other hand, it completely excludes the prohibition of unfair competition related to the illegal use of the results of intellectual activity, which is a key aspect for discussion.
Until now, antitrust authorities had a certain legal advantage in the form of an exclusive authority to consider disputes arising from the violation of intellectual property rights in relation to unregistered objects of intellectual property. This category of dispute often arose between competing entities due to unauthorized use of (i) similar / identical names of goods / services, (ii) similar packaging of goods, as well as (iii) any elements individualizing the product of a competitor.
The Law of the Republic of Uzbekistan “On Competition”, in particular the first part of Article 13 of this law, qualified the above actions as unfair competition, in respect of which antitrust authorities had the right to issue appropriate orders to stop unfair competition. The significant advantage of this norm was that the legislation of the Republic of Uzbekistan protected the interests of persons whose results of intellectual activity were illegally used by unfair competitors.
The removal of this norm causes some concern for any manufacturer whose products are offered for sale in Uzbekistan, since the enforcement of IP rights against imitation cases is no longer possible due to the absence of substantive law.
On the other hand, the law “On Competition”, in particular the second part of Article 13, prohibited the acquisition of exclusive rights to means of individualization (trademark, appellation of origin and company name), as well as the registration of a trademark, goods under which were previously introduced into civil circulation by a competitor. In other words, the registration of a trademark was considered as unfair competition if this trademark was already used by other persons in the same market segment. Thus, right holders could rely on certain guarantees provided by law, protecting their rights from trademark hijacking.
However, this norm was also excluded from the new version of the law “On Competition”. The removal of this norm means that the legal protection of the results of intellectual activity, in particular, the protection of a trademark is possible exclusively with trademark registration.
Often, the appearance on the market of certain names of goods precedes the state registration of such names as a trademark. In the meantime, some unscrupulous market players evaluate such cases as an opportunity for trademark hijacking. By registering a trademark, an unfair competitor acquires the exclusive right to dispose of this sign, which creates a corridor for lengthy judicial and pre-trial proceedings with the true owner. This category of disputes includes both little-known brands and widely recognizable trademarks.
The restriction of unfair competition is also one of the main requirements of the Paris Convention for the Protection of Industrial Property (1979). The Republic of Uzbekistan is a contracting party to the Paris Convention, this convention entered into force for the Republic of Uzbekistan on December 25th, 1991.
Participants in this international convention, including the Republic of Uzbekistan, are obliged to ensure effective protection against unfair competition. The Paris Convention prohibits all actions that can in any way cause confusion in relation to an enterprise, products or industrial or commercial activity of a competitor. Being a party to the Paris Convention, the Uzbek government is obliged to ensure the possibility for implementing legal instruments to suppress unfair competition.
In the new version of the Law of the Republic of Uzbekistan “On Competition”, there is still a separate article prohibiting unfair competition, however, this law contains a limitation on the application of this law in relation to cases related to exclusive rights of IP objects.
From a legal point of view, the law proposed for enforcement from October 4th, 2023 provides for a “first-to-file” regime. This regime is often used in European countries and implies the priority right of the applicant who registered the trademark, regardless of whether the trademark was used for commercial purposes by other persons.
This regime will create certain risks for manufacturers and service providers, at least at the initial stages of adapting the new version of the law. It should be separately emphasized that the introduction of the “first-to-file” regime should be accompanied by measures aimed at increasing legal awareness, primarily of the business community, as well as relevant specialists who are directly involved in promoting products about the features of brand protection.