IP in AIFC (Kazakhstan) comes under new legal regime in January 2025

January 24, 2025

Until this year, the hub had no special regulation of intellectual property rights-AIFC participants and bodies had to refer to the national legislation of Kazakhstan. On 15 November 2024, the AIFC approved the Intellectual Property (IP) Regulations, which came into effect on 1 January 2025.

Importantly, these Regulations do not establish a separate register for IP rights. Instead, IP rights registered in Kazakhstan under national law are recognized as valid and enforceable within the AIFC.

The Regulations cover key IP areas such as patents, copyrights, trademarks, trade names and trade secrets. While they largely align with Kazakhstan's national laws, the AIFC Regulations also introduce important distinctions, many of which are inspired by English-law legal practices. Below are some of the key distinctions.

Patents:

• The AIFC considers as acts of infringement: inducing another person to infringe a patent in or from the AIFC (even if the inducer is located outside the AIFC) and cooperating with another party to an act of infringement of a patent in or from the AIFC (even if the other party is located outside the AIFC).
• National law requires compensation in cases of use of patents during natural disasters or accidents, while the AIFC regulation does not.
• AIFC introduces the concept of "reversal of burden of proof" in patent infringement cases: If the patent involves a manufacturing process, and the owner cannot determine if the process was used, the burden of proof shifts to the alleged infringer to prove that the patented process was not used.

Copyright: Inspired by English-law legal practices, the AIFC Regulations distinguish between joint authorship and co-authorship.

Trademarks: Well-known trademarks under national law are required to be registered, whereas in the AIFC, registration is not a requirement for recognition.

Trade secrets: AIFC Regulations provide clearer and more detailed protections for trade secrets compared to national laws. The Regulations outline the owner's rights, such as licensing or transferring control. They define misappropriation, such as acquiring secrets through improper means, and clarify what does not count as misappropriation (for example, reverse engineering). This creates a more detailed framework for protecting confidential information.

Commissioner of Intellectual Property: The new Regulations introduced the position of Commissioner for Intellectual Property. The Commissioner is responsible for enforcing the Regulations, resolving disputes, drafting rules and standards, and making recommendations to the AIFC Board of Directors. The Commissioner is funded by the AIFC but may also charge a fee for services. If the Commissioner determines a person has violated the Regulations, it may take the following actions:

1. Order the violator to cease the violation and comply with the Regulations
2. Request the AIFC Registrar of Companies to suspend the violator's activity temporarily
3. Confiscate and dispose of materials related to the violation at the violator's expense
4. Impose a fine between US$5,000 and US$50,000

Any party injured by a violation of these Regulations has the right to approach the AIFC Court for injunctions and damages. Actions must be brought no more than 6 years after the misappropriation is discovered or reasonably have been discovered by the incurred party. This is a significant increase compared to Kazakhstan's three-year period.

Fines: The AIFC imposes fines in US dollars. For example, unlawfully using a trademark that is confusingly similar to a registered trademark with the intent to or effect of causing confusion and misleading the public can result in a fine of up to US$25,000.

Conclusion: The Regulations establish a comprehensive framework for protection and enforcement of IP rights under AIFC jurisdiction. By aligning with the national laws of Kazakhstan while introducing specific provisions from English-law legal practice, these Regulations provide clarity and security for businesses, innovators and creators operating within the AIFC.