Trademark Owner Liability Insurance

1. About the insurance
2. Which risks are taken into account
3. What to check
4. What to do when a claim is made

Features of the insurance protection

Insurance of intellectual property objects. Insurance of goods included in the Customs Register of Intellectual Property Objects (CRIPO). Insurance for customs authorities. Arranging a civil liability insurance contract.

Civil liability insurance of the owner of an intellectual property object
Protection of intellectual property rights by the customs authorities is very important, because it prevents goods that infringe exclusive rights from being released into civil circulation, the subsequent seizure of which entails significant costs for the state and for the rights holder.
CRIPO – this abbreviation stands for the customs register of intellectual property objects, which includes copyright objects, related-rights objects, trademarks, service marks and appellations of origin of goods.

Accordingly, in addition to an application for the protection of rights to intellectual property objects, the following is required to include goods containing intellectual property objects in the Customs Register of Kazakhstan:
- information on the intellectual property objects (with notarized documents confirming the intellectual property right or the right to use the intellectual property objects attached, for example a licence agreement);
- a description of the goods (enabling the customs authorities to identify goods that infringe intellectual property rights);
- the applicant's undertaking to compensate the declarant and other persons, as well as the customs authorities, for harm that may arise in connection with the suspension of the release of goods that are alleged to infringe intellectual property rights;
- a civil liability insurance contract of the applicant covering harm caused to other persons, with a sum insured of not less than 1,000 times the monthly calculation index;
- samples of the original goods (provided where possible).

Please note that goods are entered in the Customs Register of Kazakhstan for a period of no more than two years, but not longer than the term of protection of the intellectual property object or the term of the civil liability insurance contract. In Kazakhstan, insurers that provide liability insurance for intellectual property rights holders conclude contracts for one year only; consequently, goods are included in the Customs Register of Kazakhstan for one year only, with unlimited subsequent renewal (taking into account only the term of protection of the intellectual property object).

The suspension of the release of goods suspected of infringing intellectual property rights, where such goods are not entered in the Customs Register, works as follows. Having suspended the goods, the customs authorities attempt, within 24 hours, to locate the rights holder. If the customs authorities cannot find the rights holder within this period, the decision to suspend the goods must be cancelled. After receiving the notification, the owner of the intellectual property objects must, within three working days from the date the goods were suspended, submit a written reply on the measures being taken against the declarant, as well as a written application to extend the suspension of the release of the goods to 10 working days. Within those 10 working days, the rights holder must provide the customs authorities with the following documents:
- a judge's ruling initiating a civil case on a claim for infringement of rights to intellectual property objects;
- an undertaking to compensate the declarant and other persons, as well as the costs of the customs authorities, that may arise in connection with the suspension of the release of goods containing intellectual property objects
- in cases where the court decides that the goods are not goods infringing intellectual property rights;
- written evidence confirming that the rights holder applied to the customs authorities to have the goods containing the intellectual property objects included in the Customs Register.

If these documents are provided, the customs authorities suspend the release of the goods until the court decision enters into legal force. Otherwise, the customs authority cancels the decision to suspend the release of the goods and carries out customs declaration of the goods. In that case, the costs associated with suspending the release of the goods for up to ten working days are borne by the owner of the intellectual property objects.

Risks that are important to agree on

• third-party claims alleging infringement of exclusive rights;
• agreed legal defence costs;
• losses caused by employee errors within the terms of the contract;
• costs of expert examination and of establishing the circumstances of the claim;
• the territory of cover and whether the policy applies to foreign claims.

What to check before concluding the contract

1. which trademarks and territories are named in the policy;
2. whether claims that arose before the insurance start date are covered;
3. whether court and out-of-court costs are included;
4. what the limit per claim and the aggregate limit are;
5. what deductible applies;
6. how and within what period the insurer must be notified.

What to do when you receive a claim

Record the date the demand was received, keep the documents and correspondence, notify the insurer, and do not admit liability without agreement if the contract so provides. Prepare the trademark certificates, licence agreements, evidence of how the designation is used and documents on the alleged damage.

This material is provided for information purposes. Insurance cover is determined by the individual contract and the rules of the insurer.