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Unauthorized use of a trademark in the absence of misleading consumers does not constitute unfair competition and does not constitute an offense.
By the Resolution of the Deputy Head of the Department No. 94 dated December 30, 2016, the limited liability company "K" (hereinafter referred to as the Partnership) was subject to an administrative penalty in the form of an administrative fine in the amount of 1,500 monthly calculation indices (hereinafter referred to as MCI), which amounts to 3,181,500 tenge for committing an administrative offense under part 2 of Article 163 of the Administrative Code which resulted in unfair competition in terms of the misuse of means of individualization of goods, works, services, as well as objects of copyright. By the resolution of the Specialized Administrative Court of Astana dated January 26, 2017, the resolution of the authorized body was left unchanged. Having heard the explanations of the representative of the Partnership who supported the protest, representatives of the authorized body who objected to the satisfaction of the protest, the prosecutor's conclusion in support of the protest, having examined the case materials, the board considers the protest to be satisfied on the following grounds. By virtue of Article 840 of the Administrative Code, the inconsistency of the judge's conclusions about the factual circumstances of the case set out in the decision on an administrative offense with the evidence examined during the examination of the protest is the basis for the cancellation or amendment of the decision on an administrative offense and the issuance of a decision. According to the decree of the Department dated December 30, 2016, in the period from November 19 to December 28, 2015, the Partnership held the Mobile Salary campaign (subsequently, the campaign was extended from January 15 to May 31, 2016), where the Partnership's subscribers received cash bonuses when receiving incoming calls from subscribers of other mobile operators. to the main balance. The text was posted on the Partnership's website: "Accept incoming calls from subscribers of Kcell, Activ, Altel, Tele2 and receive bonuses in the form of funds to the main balance." According to the Department, these actions of the Partnership, in particular the use of the word "Tele2" in the promotion, as well as the use of the trademark "Tele2" owned by M LLP, are unfair competition expressed in the misuse of means of individualization of goods, works, services, as well as objects of copyright. In accordance with part 2 of Article 163 of the Administrative Code, unfair competition entails a fine for large business entities in the amount of one thousand five hundred monthly calculation indices.
Unfair competition, according to part 1 of Article 177 of the Entrepreneurial Code of the Republic of Kazakhstan (hereinafter referred to as the PC), is any action in competition aimed at achieving or providing undue advantages. By virtue of subparagraph 1) of part 1 of Article 177 of the Criminal Code, unfair competition includes the misuse of means of individualization of goods, works, services, as well as objects of copyright. According to Article 178 of the Criminal Code, the unlawful use of means of individualization of goods, works, services, as well as objects of copyright is the illegal use of someone else's trademark, service mark, trade name, appellation of origin or similar designations for similar goods or the use without the permission of the copyright holder or an authorized person of the names of literary, artistic works, periodicals, or the use of packaging in a manner that may mislead the consumer about the nature of, the method and place of production, consumer properties, quality and quantity of the product or in relation to its manufacturers. According to subparagraph 8) of Article 1 of the Law of the Republic of Kazakhstan dated July 26, 1999 "On Trademarks, Service Marks and Appellations of Origin" (hereinafter referred to as the Law), a trademark, service mark (hereinafter referred to as trademark) is a designation registered in accordance with this Law or protected without registration by virtue of international treaties in which the Republic of Kazakhstan participates, which serves to distinguish the goods (services) of some legal entities or individuals from similar goods (services) of other legal entities or individuals. According to paragraph 4 of Article 4 of the Law, the trademark owner has the exclusive right to use and dispose of the trademark belonging to him in respect of the goods and services indicated in the certificate. No one may use a trademark protected in the Republic of Kazakhstan without the consent of the owner. In accordance with paragraph 1 of Article 43 of the Law, the unauthorized introduction of a trademark or an appellation of origin or designations confusingly similar to them into civil circulation in respect of similar goods and services is considered a violation of the exclusive right of the trademark owner or the right to use an appellation of origin. any goods and services. Unauthorized use of a trademark or an appellation of origin in publicly accessible telecommunication networks (the Internet and others) is also recognized as a violation of the exclusive right of the trademark owner or the right to use the appellation of origin.
Also, according to part 1 of Article 1024 of the Civil Code of the Republic of Kazakhstan (Special Part) (hereinafter referred to as the Civil Code), a trademark (service mark) is a verbal, pictorial, three–dimensional or other designation registered or protected without registration by virtue of an international agreement, which serves to distinguish goods or services of one person from similar goods and services of other persons. The use of a trademark, in accordance with Part 2 of Article 1025 of the Civil Code, is considered any of its introduction into circulation: manufacture, application, import, storage, offer for sale, sale of a trademark or product marked with this mark, use in signage, advertising, printed products or other business documentation. In accordance with Article 2 of the Law, the legislation of the Republic of Kazakhstan on trademarks, service marks and appellations of origin consists of the Civil Code, this Law and other regulatory legal acts of the Republic of Kazakhstan. If an international treaty ratified by the Republic of Kazakhstan establishes rules other than those contained in this Law, the rules of the international treaty shall apply. According to article 10.bis of the Paris Convention for the Protection of Industrial Property of March 20, 1883, any act of competition that contradicts honest customs in industrial and commercial matters is considered an act of unfair competition. In particular, they are subject to a ban: 1) all actions capable of causing confusion in any way in relation to the enterprise, products or industrial or commercial activities of a competitor; 2) false statements in the course of commercial activities capable of discrediting the enterprise, products or industrial or commercial activities of a competitor; 3) indications or statements, the use of which in carrying out commercial activities may mislead the public about the nature, method of manufacture, properties, suitability for use or quantity of goods. Thus, an analysis of the above-mentioned provisions of laws and an international convention in their entirety leads to the conclusion that in order to determine unfair competition, a mandatory sign of misleading the consumer of goods, works, and services regarding the nature, method, and place of production, consumer properties, quality, and quantity of goods, or in relation to their manufacturers, is necessary.
No such circumstances have been established in the case. By using the names of other mobile operators, the Partnership did not mislead the consumer that the service it offered was of the quality or origin of another mobile operator. Even taking into account that as a result of receiving calls from the Tele2 operator, the Partnership, by virtue of the existing contract, received a certain fee from the latter for every minute of the interconnect, the Partnership simultaneously stimulated consumer demand for the corresponding cellular service of its competitor. A different understanding of the illegality of using a trademark leads to the illegality of the actions of any persons providing balance replenishment services to Beeline, Tele2, Altel, Kcell, Activ subscribers, or, for example, car repair services from certain automakers, which is unacceptable from a competitive perspective. In addition, the board takes into account the protest arguments that the Partnership in its advertising campaign "Mobile Salary" did not use the trademark belonging to Mobile Telecom-Service LLP, but its verbal designation in the transcription "Tele2". Thus, the board comes to the conclusion that the actions of the Partnership do not constitute unfair competition, which means that there is no corpus delicti. In addition, on June 23, 2016, M LLP sent a letter to the Department to terminate the investigation into their previously submitted application regarding the Partnership. Considering that disputes concerning the infringement of the exclusive right of the trademark owner are subject to consideration in the civil procedure provided for in subparagraph 2) According to paragraph 1 of Article 42 of the Law, the dispute between the Partnership and LLP "M" during the investigation regarding the use of the verbal designation of the trademark by the Partnership has already been settled.
Therefore, the board does not see in the actions of the Partnership the composition of an administrative offense provided for in Article 158 of the Administrative Code "Illegal use of someone else's trademark, service mark, appellation of origin or brand name." In accordance with subparagraph 2) In part 1 of Article 741 of the Administrative Code, proceedings on an administrative offense may not be initiated, and those initiated are subject to termination in the absence of an administrative offense. According to subparagraph 1) of part 3 of Article 843 of the Administrative Code, the decision is subject to cancellation in any case if, on the grounds provided for in Articles 741 and 742 of the Administrative Code, the proceedings have not been terminated. In accordance with part 4 of Article 843 of the Administrative Code, having established that a violation of the procedural rules specified in subparagraph 1) of Part 3 of this Article was committed during the consideration of an administrative offense case, the judge cancels the decision and terminates the proceedings. Due to the above, the specialized judicial board of the Supreme Court overturned the decision of the deputy head of the republican state institution "Department of the Committee for Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Astana" and the decision of the court of first instance to terminate proceedings on an administrative offense against limited liability company "K" under part 2 of Article 163 of the Administrative Code for the absence of an administrative offense. The protest of the Deputy Prosecutor General of the Republic of Kazakhstan is satisfied.
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