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The New DIFC Intellectual Property Law

The Prime Minister of UAE His Royal Highness Shaikh Mohamed Bin Rashid Al-Maktoum issued law number 4/2019 for Dubai International Financial Center (DIFC) on November 21, 2019, “DIFC IP LAW”.

With the help of this new law, we believe the UAE, and Dubai in particular, has advanced one step more in progressing its regional position as a hub host for e-commerce, e-governance services, knowledge-based economy and strengthen innovation environment. Dubai has been the center point in the Middle East to launch many entities that has later becomes international reputation in e-commerce, mobile applications and online web services providers. The very good examples of “Souq.com” marketplace, acquired by Amazon, and “Maktoob” acquired by Yahoo Inc, “Careem” in process of acquisition by Uber, were all established in the UAE. Because of this unique position, Dubai was the ideal place to hold many routine IP events and meetings for international organisations to promote, discuss and advocate for protection of IP rights and discuss key challenges in this domain within our region.

Dubai International Financial Center (DIFC), or unofficially known as the Wall street of Middle East, was established to be the first district that follows common law system in a civil law country. This area continues to be among the most favorable locations to set up entities of foreign investments, international firms, financial institutes and other western companies that seek presence in the Middle East. As Intellectual property (IP) is one of the key areas of law that is evolving rapidly in UAE, both government and private sectors have begun, in the last few years, paying more attention to applicable laws and regulations that assist them to create, protect, own and enforce their exclusivity on intangible assets.

The majority of IP rights in UAE are regulated by Federal laws that were enacted between 1992 and 2002 and were followed by several amendments. To enhance the protection of IP rights within DIFC and keep the speed with international standards of IP laws, the new DIFC IP law introduces clarity on ambiguous or keys issues that are deregulated in the UAE. In fact, calls were made by professional experts in IP during the past few years to pass a special, developed and enhanced IP piece of regulation in the DIFC that can set out the best practice rules, provide guidance and advanced protection and clarity on IP related inquiries. Hence, this new law does not come as a surprise to those who have been following the advancement of local regulations in the UAE, rather, it reads as a promising step to expand in the protection of IP rights in the region and sets out a good precedent for legislators to regulate, or amend existing laws, on a wider level.

The new DIFC IP law introduces a new era in IP rights protection within our region. It establishes a well-regarded reference to head for a more internationally satisfying IP legal landscape. Whilst we should wait and see the enforcement of this new law before local courts, we anticipate key interesting provisions to be introduced to regulate classical IP rights models, i.e. patents, trade secrets, industrial designs, trademarks, copyrights and trade names. For instance, this law should read in harmony with existing federal laws that are applicable in the UAE and does not determine any new and/or alternative registration systems. The law does not establish or introduce any registration systems for IP rights within DIFC nor will replace or overlap with existing registrations acquired from relevant offices at the UAE Ministry of Economy. On the other hand, it brings an explicit recognition of some new doctrines and principles in the IP field, such as fair use of trademarks and patents, work for hire, parody, classification of economic rights associated with copyrights, factors and advanced measures to determine “well known” trademarks, trade secrets violations and reverse engineering.

Collection Societies is a very interesting topic to see regulated for the first time in an internal law and the new DIFC IP law provides an excellent opportunity for Collection Societies entities to plan and establish its presence in the DIFC. This will help to start the process of enforcement of those delegated copyrights to Collection Societies, bringing this area to a real presence within the UAE. To those who followed this topic, it has been subject to serious debates, discussions and advocacy efforts in the past 10 years, without any material progress. In light of this new law, the Collection Societies are invited to expand their presence and come to the DIFC to use this new legislative platform for its activities in the region. Article 41 of the new law sets out some clarity on performance of Collection Societies and restrictions of some activities, such as applying discriminatory licensing or exploitation to copyrighted work of art. Nevertheless, Collection Societies should know that the DIFC court orders are enforceable within the UAE mainland and, in theory, can be expanded to reach other GCC and/or Arab states, based on applicable treaties and conventions.

Sanctions and penalties in this law are also an important chapter, noting promising ranges of fines that are to be imposed, which seem to be more effective in assisting enforcement actions. With introducing a new Commissioner of IP role, we believe this mechanism will be an indication to see how this new DIFC IP law will be enforced.

A more detailed review for this new law will be released by IP practitioners which will help to add further clarity and explanation to stakeholders, i.e. Intellectual Property rights owners and counsels.

UAE Ministry of Economy update fees for Trademark Enforcement

To ensure efficiency and streamlining with international best practice, namely in trademark prosecution and the enforcement of registered rights, the UAE Ministry of Economy has issued an administrative order to decrease and waive some of the core official fees associated with their trademark registration and enforcement services.

Following an increase to such fees in 2015, the UAE Trademark Office was urged by trademark owners to consider a reform of this decision. Whilst the number of filed and examined marks has somewhat declined since 2015, this decrease can in part be attributed to the reduction of illegitimate marks filed in bad faith and those filed with intention to benefit from pre-existing rights.

The UAE Ministry of Economy has decreased and waived more than 100 nominal fees across different departments and sections, such as commercial agencies, the Trademark Office and Copyright Office. Notably, the Trademark Office has reduced its registration fees by 33%. This follows the introduction of steps to ensure the complete protection of trademark rights with the full integration of an online system for all trademark prosecution services and e-filings. This full electronic integration, operational since January 2019, has reduced the volume of administrative work for officials and has enhanced examination efficiency. On average, it now takes less than 6 months to complete the entire process of filing, examination, publication and registration of new trademarks. In the past, this time frame was considerably longer, taking approximately 12 months or more, to complete the process.

Prior to the reduction in fees for trademark registration, the applicable fees in the UAE were considered among the highest, if not the highest, in the world. As a result, officials received substantial requests to reconsider such rates and bring the cost in line with international standards. Eventually, in July 2019, decision makers at the UAE Ministry of Economy decided to adopt and publish a list of service fees to be reduced and waived relating to trademark registration, renewal inspection in enforcement of trademarks and parallel import complaints. The new nominal fee for trademark registration was reduced by 33%, decreasing the official fee for registration from AED 10,000 to AED 6,700. This move is expected to encourage brand owners to increase their protection in the UAE to cover various elements such as shapes, slogans, terms, colours and other core components of brand integrity.

Additionally, grievances or appeals before the Trademark Appeal Committee from provisional refusal or office action by examiner is now available free of charge. This used to be subject to a fee of AED 5,000.

In addition to the above, officials at UAE Ministry of Economy recognise the necessity to offer an accessible and proactive enforcement system. Therefore, a decision was made to waive the official fees associated with any request or application made by trademark owners to officials at the Trademark Office to investigate incidents of trademark infringement. Registered commercial agents in the UAE also benefited from the wavier of certain fees as they are no longer required to a pay fee to seek protection from parallel import by virtue of issuing administrative circulars to notify registered commercial agencies rights to border authorities, i.e. UAE Customs. These fees were previously mandatory following administrative enforcement action taken before the Ministry of Economy in anti counterfeiting and infringement cases and the enforcement of commercial agencies rights against grey market/parallel import shipments.

BSA is keen to see brand owners benefit from these new arrangements and urges all professionals in the IP field to partake in continuous dialogue with UAE Ministry of Economy to encourage enhanced protection which is both affordable and aligned with international standards.

For any enquiry or additional assistance in trademark prosecution, enforcement of IP rights, commercial agencies or general IP legal services in the UAE and the wider Middle East region, contact Head of Intellectual Property, Munir Suboh.