SETTLE attorneys advise pharmaceutical, telecommunication, wines & spirits and FMCG sector clients across a broad spectrum of intellectual property and corporate law issues.
Jamshid Agzamkhadjaev, managing partner and attorney at-law and Sherzod Utkirkhujaev, partner, attorney at-law discuss SETTLE’s ability to deliver predictable and efficient solutions, while providing clients with a clear vision of what lies ahead.
Bridges: Should foreign companies intending to enter the Uzbek market worry about intellectual property protection?
Agzamkhadjaev: Both residents and non-residents should have equal rights and obligations in terms of intellectual property protection. IP protection is important for ensuring competitiveness between market participants, since strong protection of intellectual rights will create a fair competitive environment.
It is worth noting that IP legislation of the Republic of Uzbekistan provides proper protection of the rights and interests of right-holders, especially from piracy, copycat, lookalike issues etc. The principles set out in the Paris Convention for the Protection of Industrial Property, as well as other international treaties on intellectual property, are reflected in the national legislation of the Republic of Uzbekistan.
However, there are still some significant issues that require improvement, for example, patent fees in Uzbekistan for non-residents (excluding some of CIS countries) are much more expensive than for residents. Perhaps, it can be justified with objective circumstances.
On the other hand, right-holders enjoy several legal options against violation of IP rights. It is important to specify the role of the Agency for Intellectual Property under the Ministry of Justice of the Republic of Uzbekistan, which is actively working to combat counterfeit goods.
Describe the key aspects that have been introduced by the government in the field of intellectual property
First of all, it is necessary to note the legislative change on the use of trademarks. In every country, where intellectual property rights are protected, there is a grace period granted to trademark owners during which the right holder has the right not to use the trademark, and after that the trademark becomes vulnerable to cancellation due to non-use. In Uzbekistan, the grace period has been reduced from 5 to 3 years. Reducing the term will ultimately have a positive effect, since this change contributes to the rapid displacement of passive market participants who do not use trademarks properly.
Moreover, one of the important and newly adopted acts is the establishment of a fixed amount of compensation to be collected for copyright infringement. In general, Uzbek law has an imperfect approach to compensation for damages, since right holders often face problems in obtaining compensation for infringement of their intellectual rights. In the new edition of the law “On copyright and related rights”, the legislator provided for compensation for damages (up to 25 thousand US dollars) as one of the methods to protect rights.
Currently, other regulatory projects are being developed to encourage intellectual property owners with new legal opportunities that will positively affect the business of foreign companies in Uzbekistan.
What is the judicial practice in Uzbekistan in terms of protection of rights?
Litigation in the category of intellectual property lies within the competence of the court of law. The court consists of three judicial instances:
- first instance
- appellate instance
- cassation instance
The decision enters into force after the consideration of the case in the appellate instance (or after the expiration of the period for appealing the decision to the appellate instance), while the cassation instance is considered as the last instance, the judicial board of which checks the legitimacy and correctness of the decision of the previous instances.
There is no obligatory pre-trial procedure for intellectual property disputes, however, in practice, right holders are often interested in resolving the issue amicably in pre-trial order. Although, the number of court cases in the category of intellectual property has increased significantly in recent years (2019-2021).
Over the past couple of years, enormous judicial reforms have been implemented in Uzbekistan, including organizational changes. Judicial reforms are mainly aimed at simplifying several procedures, improving the quality of work and creating convenience for applicants. Moreover, the courts have improved procedural codes and eliminated a number of procedures that prevent the smooth representation of the interests of companies.
Bridges: How would you describe the Uzbek economy in 2022?
Utkirkhujaev: With 6.2 % raise in 2021 – significantly higher than the 4.3% predicted a year ago – and expected 5.6 % raise in 2022, Uzbekistan’s economy is reporetedly second fastest growing in the region CIS.
The country has achieved substantial progress in transforming its economy and society since 2017, when the president Shavkat Mirziyoyev came to power after 25 years of ruling of the then president Islam Karimov. The Government is now moving on to the next stage of economic reforms to address structural constraints, such as the absence of factor markets and the state’s economic dominance in the economy.
Despite the COVID-19 pandemic, thanks in part to reforms to liberalize prices and remove barriers to domestic and international trade, the country’s economy was one of the few in the Europe and Central Asia region to avoid negative growth in 2020.
With 35 million population from which more than 19 million is able-bodied – which exceeds the number of able-bodied population of Central Asian countries combined – Uzbekistan is a big market to invest whose population is at the peak of producing and consuming the most.
How important will Japanese and Asian investors be to Uzbekistan’s economy?
It is noteworthy that in 2019 Uzbekistan entered the top 20 countries in the world that achieved the greatest results in improving the business environment. In the 2020 ranking, the country achieved the best results in protecting minority investors, paying taxes, enforcing contracts and international trade. In fact, the republic moved up from 76th to 69th place in “Doing Business 2020” ranking among 190 countries.
In 2020 trade between Uzbekistan and Japan has reportedly reached 141 million USD. Several dozen enterprises with Japanese companies as JOGMEC, Mitsubishi, Itochu, Sumitomo, Marubeni, Isuzu and others operate in Uzbekistan. Leading Japanese Representative offices of 15 Japanese companies were accredited.
In 2019 a solid package of agreements concluded between Uzbek and Japanese business circles in the amount of 6.5 billion USD for the implementation of a number of joint projects in the field of energy, industrial and agricultural modernization, infrastructure, ecology, healthcare and other industries. From 1993 to 2019 JICA provided concessional loans totaling $ 2.52 billion. Japan regards Uzbekistan as a key state in the Central Asian region in terms of geographic location and economic potential. This is evidenced by the fact that about 57% of the total amount of Japanese aid allocated to the region falls on Uzbekistan.
It can be noted with confidence that Japan has been and remains a strategic and reliable partner for Uzbekistan, which consistently supports the process of radical reform and deep modernization of the economy and social sphere of the state. In general, friendly and trustful relations between the two countries create a solid and favorable basis for the development of mutually beneficial and progressive cooperation in the economic, trade, investment, scientific and technological, cultural and humanitarian spheres.
How will SETTLE position itself as a firm to win new business?
SETTLE is a boutique law firm that focuses on provision of a high-quality legal services in corporate and intellectual property laws. Thanks to our 15+ years of joint experience in the sphere, we are ready to support our clients from the very beginning of their facility Uzbekistan.
Our team of lawyers consists of professionals who choose the best solutions for clients’ legal issues. The Uzbekistan market is growing fast, there are many changes, so we are always dealing with the world and development to always exceed business expectations.
SETTLE has handled a number of litigations in recent years by representing the interests of the world’s largest giants in the fields of pharmaceuticals, FMCG, construction, etc. SETTLE has also been involved in advising world leading companies in the field of IT and technology.