WIPO TRAINING OF TRAINERS PROGRAM

Wednesday 22 December 2010

Joycia Young, Partner

Intellectual Property - the Gulf perspective

The Gulf Region

Regional aspects of IP laws

Regional aspects of IP laws

Official language is Arabic, all trade mark documents, court proceedings must be in Arabic

Laws emanate from the French civil codes

No (common law) of passing off

No official English translation of IP laws

No system of Court precedent

First to file jurisdiction

Impact of legal and non-legal aspects

Limited availability of injunctions

In the UAE, IP laws are Federal and cover trade marks, copyright, patents and industrial designs. The laws are enforced at Emirate level.

International IP conventionsInternational IP conventions

TRIPS Paris Berne PCT

UAE Yes Yes Yes Yes

Bahrain Yes Yes Yes Yes

Qatar Yes Yes Yes No

Kuwait Yes No No No

KSA Yes Yes Yes No

Oman Yes Yes Yes Yes

Trade marks

IP as valuable assetsIP as valuable assets

In 2008-09 The Coca Cola Company Limited's balance sheet highlighted the immense value of IP assets:

trade marks with indefinite lives were valued at USD$6.042m

goodwill was valued at USD$3.988m

combined value of these two assets represented 23% of the company’s total asset base.

How are a company's valuable IP assets:

identified?

protected?

valued?

commercialised?

Where does the value lie?Where does the value lie?

On the balance sheet

Through licensing or sale and transfer

Used as security to obtain debt finance

Increasing reliance on IP assets as a source of competitive advantage

Investors and lenders are interested in well manage

IP portfolios, a single, strong patent may present a number of financing sources

What is a trade mark?What is a trade mark? In broad terms, a “trade mark” is any sign capable of being represented

graphically which distinguishes one entity’s goods or services from those of its competitors.

The US Supreme Court has declared that a trade mark can be "almost anything at all that is capable of carrying meaning".

A trade mark may consist of:

- Words

- GUCCI

- Letters or numbers

- 501, 007, 747

- Designs/logos

- The shape of goods or their packaging

- Sound

- Colour

- Smell

- Motion

In the UAE, Article 2 of Law No. 37 of 1992 incorporating Law No. 8 of 2002 defines a trade mark as:

“anything which takes a distinct form comprising names, words, signatures, letters, numbers, designs, symbols, titles, stamps, seals, portraits, engravings, advertisements, packages or any other mark, or any compilation of these, if this is used or intended to be used either to distinguish goods, products or services, whatever their origin, or to indicate that the goods or products are attributable to the owner of the mark by reason of their manufacturer, selection or trade in them, or to indicate the provision of a certain service”

Some interesting marks

Some interesting marks

IntelIntel Trademark: The mark consists of a five tone audio progression of the notes D FLAT, D FLAT, G, D FLAT and A FLAT.

Reg. No. 2315261, 16 November 1999

Status: Registered

Goods and Services: Computer hardware and computer operating software, microprocessors, integrated circuits and semiconductor devices

Registrant: Intel Corporation.

Design Phrase: The mark consists of a five tone audio progression of the notes

D FLAT, D FLAT, G, D FLAT and A FLAT.

Twentieth Century Fox Film Fanfare

Twentieth Century Fox Film Fanfare

Trademark: The mark consists of nine bars of primarily musical chords in the

key of B flat; the chords consisting of four, eighth and sixteenth notes.

Reg. No.: 2000732, 17 September 1996.

Status: Registered

Goods and Services: Entertainment services in the nature of motion picture films.

Registrant: Twentieth Century Fox Film Corporation

Design Phrase: The mark consists of nine bars of primarily musical chords in the

key of B flat; the chords consisting of four, eighth and sixteenth notes.

UPS brownUPS brown

Trademark: Design Only (Color)

Reg. No.: 2901090, 09 Nov 2004

Status: Registered

Goods and Services: Transportation and delivery of personal property by air and motor vehicle (1920)

Registrant: United Parcel Service of America, Inc.

Design Phrase: The drawing is lined for the color brown. The mark consists of the color chocolate brown, which is the approximate equivalent of pantone matching system 462c, as applied to the entire surface of vehicles and uniforms. The mark consists of the color brown alone. The broken lines indicate the position of the mark and do not form part of the mark.

Tiffany blueTiffany blue

Trademark: Design Only (Color)

Reg. No.: 2359351, 20 Jun 2000

Goods and Services: Jewelry, precious metals (1939)

Leather products (1939)

Registrant: Tiffany and Company

Design Phrase: The mark consists of a shade of blue often referred to as robin’s-egg blue which is used on boxes. The matter shown in broken lines represents boxes of various sizes and serves to show positioning of the mark. No claim is made to shape of the boxes.

Moving MarkMoving Mark

Trademark: Moving Mark

Reg. No.: UK no. 2280003

Goods and Services: Chocolate

Registrant: Kraft Foods UK Ltd

Design Phrase: The mark consists of the three-dimensional shape breaking apart, as shown in the sequence of still pictures.

Copyright

Copyright – The basicsCopyright – The basics

What is copyright?

There is no copyright in an idea

Copyright protects the expression of an idea / facts / news

Copyright is an automatic right

There is no need to apply to register

- although recordal is possible in many countries in the Gulf

Requirements:

Recorded (written or electronic form)

A work must be “original” (i.e. not copied)

Copyright – Subject matterCopyright – Subject matter

What does copyright protect?

Copyright subsists in:

literary works (books, report, poems)

artistic works (paintings, drawings)

musical and dramatic works

photographs, sound recordings

films, software, typographical layout

Ownership of copyrightOwnership of copyright

Starting point:

author is the first owner of copyright

Ownership in most countries outside of the region:

works owned by employer as a result of:

- statutory provisions; and/or

- assignment provisions in contracts of employment

express (or implied) assignment of commissioned work

Ownership of copyright Ownership of copyright

Nuances of regional law

author is owner of work

no automatic ownership by employer

- no statutory provision

- no assignment of copyright in (“5 or more or all”) future works

assignment must comply with law

- in writing

- specify subject of work …

Retrospective assignments necessary to transfer ownership from employees / agencies (after work created)

Copyright – Practical tipsCopyright – Practical tips

Diligent use of copyright notices

© 2010 Joycia Young

“This work is protected by copyright and may not be used or reproduced in any form without the prior consent of the copyright owner”

Copyright recordals

Ministry of Economy

A claim of ownership

Copyright – PhotographsCopyright – Photographs “Anyone who takes a photographs of another has

no right to publish or distribute without permission of the subject”

Except where the photograph:

was taken at public event; or

is of a renowned public or official figure. Releases should be signed where person being

filmed and/or photographed

“The person in the photograph may permit the publication of it in newspapers or other publication media, even without the photographer’s permission, unless agreed otherwise”

Franchising

Current business trendsCurrent business trends

The IMF predicts solid economic growth of about 5.5 % expected across MENA region

Decreasing dependence on oil dependence and the need to diversify economies

Move from a focus on physical asset base to an intangible asset base

By 2020, GCC population is forecast to grow by about one third to about 53 million, vast majority will be under 25

Optimism prevails: US franchisors are still increasingly looking to the Gulf region for franchising and growth opportunities

Applicable LawsApplicable Laws

Agency laws Commercial codes Companies law Civil Codes Judicial Procedural Code Trade marks law Trade secrets/unfair competition law Employment law Other laws which regulate import of goods, labelling

Local ownership requirements

Local ownership requirements

Maximum percentages of ownership in the share capital of a corporate franchisee by GCC nationals and foreigners in each country:

KSA UAE Oman Bahrain Qatar Kuwait

% of GCC Ownership of Franchisee

0 100% 100% 100% 100% 100%

% of Foreign Ownership of Franchisee

0 49% 49% 100% 49% 49%

ExemptionsExemptions Oman: 100% foreign ownership of an entity is

permitted if the paid up share capital is no less than Omani Rials 500,000 (US$ 1,300,000) and the objects of the company aim to develop the national economy.

Qatar (subject to government approval): 100% foreign ownership of entities is permitted

for certain activities including agriculture, marketing, advertisement, technology, education, tourism, healthcare, industrial, or manufacturing projects.

KSA: Proposals to allow GCC nationals to own 100%

require enactment by implementing regulations Proposal to allow foreigners to own 75% are

subject to final approval by Saudi Arabia General Investment Authority (SAGIA)

Agency laws in the GCCAgency laws in the GCC

Agency laws cover any arrangement in which a foreign company is exclusively represented by an agent to ‘distribute, sell, offer, or provide goods or services within geographically defined limits for a commission or profit’.

Franchise, supply and distribution agreements are often construed as a commercial agency. Except for in KSA, failure to register a franchise or supply agreement, is not an offence and it is preferable for the franchisor if the franchise or supply agreement is not registered.

Failure to register the agreements in GCC countries may affect their enforceability against third parties but not the contracting parties. However, in KSA, failure to register the franchise agreement is considered an offence and local Courts will refuse to hear a dispute in relation to an unregistered agreement.

Registration of store franchise & supply agreements

Registration of store franchise & supply agreements

In order for a store franchise or supply agreement to be registered under the agency laws of GCC countries, the following conditions need to be fulfilled:

• the commercial agent must be a National or a company wholly owned by Nationals of the GCC country in which the agreement is to be registered;

• the commercial agent must be licensed by the concerned authorities in the GCC country to engage in commercial agency activities; and

• the agreement must be notarised, legalised and legally translated to Arabic.

Implications of registrationImplications of registration

Registration grants certain statutory rights to commercial agents which cannot be waived or excluded by contract:

the agent's right to territorial exclusivity;

the agent's presumptive right to compensation in the event of termination even if the term has been limited by agreement;

the agent's right to receive commissions on sales of the products in their designated territory irrespective of whether such sales are made by or through the agent;

the agent may prevent the import of products into the GCC country where the agent is not the consignee; and

effective inability to appoint another agent or for the franchisor to supply directly until the dispute is resolved and the existing agency deregistered.

Governing law and dispute resolution

Governing law and dispute resolution

As a general principle, parties are free to choose governing law.

Courts will apply that law unless inconsistent with Islamic/Shari’ah law, public order, morals, or, in KSA, local law.

In KSA, parties are free to choose foreign laws in relation to agreements that are not subject to registration (e.g. master franchise/ development agreements). Store franchise, IP licence and supply agreements that need to be registered will be subject to KSA law.

Dubai International Financial Centre arbitration using LCIA rules.

Enforcement of Foreign Arbitral Awards

Enforcement of Foreign Arbitral Awards

Enforcement of foreign arbitral awards under New York Convention:

All GCC countries are party to the New York Convention on foreign arbitral awards.

However, the enforcement of foreign arbitral awards has not been tested in relation to franchise disputes.

Courts will enforce a foreign award only if the award does not conflict with public order, morals (including Shari'ah) and in KSA, local laws.

Countries that are party to the New York Convention

Countries that are party to the New York Convention

Country Accession Entry into force

Bahrain 6 April 1988 5 July 1988

Egypt 9 March1959 7 June 1959

Jordan 15 November 1979 13 February 1980

Kuwait 28 April 1978 27 July 1978

Lebanon 11 August 1998 9 November 1998

Oman 25 February 1999 26 May 1999

Qatar 30 December 2002 30 March 2003

Saudi Arabia 19 April 1994 18 July 1994

Syria 9 March 1959 7 June 1959

United Arab Emirates

21 August 2006 19 November 2006

Registration of Trade Mark Licences

Registration of Trade Mark Licences

Except for in KSA, the registration of a trade mark licence is not necessary for the agreement to be enforceable between the parties.

The primary purpose of registration is so that the licence may be enforced against third parties e.g. in the event of infringement by a third party or a cancellation action based on non-use, registration will enable the franchisor to rely on the franchisee's licensed use.

To register a trade mark licence in GCC countries, the agreement must be signed by both parties, translated to Arabic and legalised. Duration of the licence cannot exceed the validity period of the registered trade mark.

Trade and corporate names

Trade and corporate names

Trade names are corporate, or business names registered by entities often as a legal prerequisite to carrying on business.

In any given jurisdiction, the ownership and registration of identical trade marks and trade names may vest in different parties. Companies need to protect both.

In the UAE, the trade marks register is maintained at a Federal level while trade names may be registered with authorities within each of the seven Emirates. In Dubai, separate, unconnected trade name registers are maintained by DED, JAFZA and DAFZA.

Trade marks registered in service classes (eg retail services) are often used to challenge opportunistic trade name registrations

Domain names

Domain namesDomain names Domain names are trade marks/trade names in cyberspace

Arabic domain names launched in October 2010

in Egypt [egypt in English.] مصر

in Jordan [jordon in English.] االردن

in Qatar [qatar in English.] قطر

in [alsaudiah in English.] السعوديةSaudi Arabia

in Syria [syria in English.] سورية

in Tunisia [tunis in English.] تونس

in the [emarat in English.] اماراتUAE

Domain name recovery actions

UDRP / .aeDRP – arbitration

Complainant must demonstrate that:

the disputed DN is identical or confusingly similar to its TM;

the respondent does not have a right or legitimate interest in the DN; and

the respondent registered and used the domain name in bad faith.

Interesting decisionsInteresting decisions

'ebay.ae' - WIPO held that the use of DN was an attempt, for commercial gain, to attract Internet users by creating a likelihood of confusion with established TM.

'sonyericsson.ae‘ - WIPO held that the Registrant, who had not used the DN, registered it primarily for the purpose of selling it to the Complainants for more than the out-of-pocket costs.

Thanks for participating.

Any questions?