Intellectual Property — the Gulf perspective Joycia Young

Intellectual Property - the Gulf perspective Joycia Young, Partner WIPO TRAINING OF TRAINERS PROGRAM Wednesday 22 December 2010

The Gulf Region

Regional aspects of IP laws l Official language is Arabic, all trade mark documents, court proceedings must be in Arabic l Laws emanate from the French civil codes l No (common law) of passing off l No official English translation of IP laws l No system of Court precedent l First to file jurisdiction l Impact of legal and non-legal aspects l Limited availability of injunctions l 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 conventions TRIPS Paris Berne PCT Yes Yes Bahrain Yes Yes Qatar Yes No Kuwait Yes No No No KSA Yes Yes No Oman Yes Yes UAE Yes

Trade marks

IP as valuable assets l 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. 042 m goodwill was valued at USD$3. 988 m combined value of these two assets represented 23% of the company’s total asset base. l How are a company's valuable IP assets: identified? protected? valued? commercialised?

On the balance Where does the l sheet value lie? l Through licensing or sale and transfer l Used as security to obtain debt finance l Increasing reliance on IP assets as a source of competitive advantage l 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? l 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. l 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

l 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

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

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 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 462 c, 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 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 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 basics l What is copyright? l There is no copyright in an idea Copyright protects the expression of an idea / facts / news l Copyright is an automatic right There is no need to apply to register - although recordal is possible in many countries in the Gulf l Requirements: Recorded (written or electronic form) A work must be “original” (i. e. not copied)

Copyright – Subject matter l What does copyright protect? l 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 copyright l Starting point: author is the first owner of copyright l 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 l 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 … l Retrospective assignments necessary to transfer ownership from employees / agencies (after work created)

Copyright – Practical tips l 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” l Copyright recordals Ministry of Economy A claim of ownership

Copyright – Photographs “Anyone who takes a photographs of another has no right to publish or distribute without permission of the subject” l Except where the photograph: was taken at public event; or is of a renowned public or official figure. l 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 trends l The IMF predicts solid economic growth of about 5. 5 % expected across MENA region l Decreasing dependence on oil dependence and the need to diversify economies l Move from a focus on physical asset base to an intangible asset base l By 2020, GCC population is forecast to grow by about one third to about 53 million, vast majority will be under 25 l Optimism prevails: US franchisors are still increasingly looking to the Gulf region for franchising and growth opportunities

Applicable Laws l l l l l 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 l 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% % of Foreign Ownership of Franchisee 0 49% 100% 49%

Exemptions l Oman: l 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. l Qatar (subject to government approval): l 100% foreign ownership of entities is permitted for certain activities including agriculture, marketing, advertisement, technology, education, tourism, healthcare, industrial, or manufacturing projects. l KSA: l Proposals to allow GCC nationals to own 100% require enactment by implementing regulations l Proposal to allow foreigners to own 75% are subject to final approval by Saudi Arabia General Investment Authority (SAGIA)

Agency laws in the GCC l 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’. l 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. l 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 l 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 registration l 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 l As a general principle, parties are free to choose governing law. l Courts will apply that law unless inconsistent with Islamic/Shari’ah law, public order, morals, or, in KSA, local law. l 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. l Dubai International Financial Centre arbitration using LCIA rules.

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 Country Accession Entry into force Bahrain 6 April 1988 5 July 1988 Egypt 9 March 1959 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 l Except for in KSA, the registration of a trade mark licence is not necessary for the agreement to be enforceable between the parties. l 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. l 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 l Trade names are corporate, or business names registered by entities often as a legal prerequisite to carrying on business. l 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. l 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. l Trade marks registered in service classes (eg retail services) are often used to challenge opportunistic trade name registrations

Domain names

Domain names l Domain names are trade marks/trade names in cyberspace l Arabic domain names launched in October 2010 l . [ ﻣﺼﺮ egypt in English] in Egypt l . [ ﺍﻻﺭﺩﻥ jordon in English] in Jordan l . [ﻗﻄﺮ qatar in English] in Qatar l . [ﺍﻟﺴﻌﻮﺩﻳﺔ alsaudiah in English] in Saudi Arabia l . [ﺳﻮﺭﻳﺔ syria in English] in Syria l . [ﺗﻮﻧﺲ tunis in English] in Tunisia l . [ ﺍﻣﺎﺭﺍﺕ emarat in English] in the UAE

l Domain name recovery actions l UDRP /. ae. DRP – arbitration l 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 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?