February 14 2022 New Trademark Law for United Arab Emirates Bird & Bird LLP | Intellectual Property - United Arab Emirates Intellectual Property IntroductionMulti-class filingsNon-traditional trademarks, geographical indications, collective marks and certificationWell-known trademarksCancellation actionsAcknowledgement of prior use and bad faithTrademark licencesProcedural changesPenaltiesCustomsIsrael boycottClarification neededMissed opportunities?IntroductionThe United Arab Emirates issued a new Trademark Law (Federal Decree Law No. 36/2021 on Trademarks), which came into effect on 2 January 2022, ushering in some much-needed change. It is worth pointing out that while the United Arab Emirates is part of the Gulf Cooperation Council (GCC), it never implemented the GCC Trademark Law, and so this is the first significant update since the 1992 law was amended in 2002.A summary of the most important changes is set out in this article; however, the implementing regulations have yet to issue and further updates will follow in due course.Multi-class filingsIn what will be music to the ears of many brand owners, perhaps the biggest news is that the United Arab Emirates has become a multi-class filing system. There is no clarification as to the impact this will have on the official fees, but a departure from the single-class system brings the United Arab Emirates further in line with international practice. This move is also consequential to the United Arab Emirates' accession to the Madrid Protocol back in December 2021.The new law also makes it clear that just because competing marks share the same class, it does not equate to a finding of similarity; and just because they are in different classes, it does not equate to a finding of dissimilarity. This is an important inclusion as UAE examiners previously only focused on the class at issue and not the specific goods and services within it. It is hoped that this will lead to an increase in the standard of examination.Non-traditional trademarks, geographical indications, collective marks and certification The definition of a "trademark" has been expanded to include sound and smell trademarks. There are also specific provisions for geographical indications. This is contrary to the amended 1992 law. In addition, the law on certification and collective marks has been expanded.Well-known trademarksThe new law more accurately defines the test for a well-known trademark, bringing it in line with international practice.Appeals against refusalsA new Grievance Committee has been formed, which will be chaired by a specialist judge and two other IP specialists, all chosen by the Minister of Justice. Having knowledgeable specialists on board is key to maintaining the United Arab Emirates' reputation as a jurisdiction that protects intellectual property, a subject that requires deep understanding. Interestingly, appeals against the Grievance Committee's decision will now go directly to the Court of Appeal, rather than to the Court of First Instance. It is thought that this is the result of the specialist knowledge expected at the lower level; however, brand owners will need to be mindful of the reduced number of appeals now available and how this may impact their strategies.Cancellation actionsHistorically, cancellation actions in the United Arab Emirates were filed before the court, making cancellation a very costly and drawn-out process akin to full litigation proceedings. The new law stipulates that cancellation actions will now be filed before the Grievance Committee in the first instance, effectively making it an administrative process. As a result, an uptake in such proceedings is expected, making it easier for brand owners to tackle squatters that take advantage of the first-to-file system.Acknowledgement of prior use and bad faithThe United Arab Emirates was always a first-to-file country, but the new law provides for recognition of prior use, specifically in grounds for cancellation. Similarly, bad faith was never a concept included in the old law but has now been specifically added as a ground for cancellation, again bringing the law in line with international practice.With the exclusion of owners of well-known rights, it is not clear whether potential opponents can rely on prior use and bad faith in opposition proceedings.Trademark licencesIn a welcome change for brand owners, it is no longer a requirement to record a licence agreement with the Ministry of Economy to have effect against third parties. The option to do so, of course, still remains and the procedures around how to do this are yet to be clarified in the implementing regulations.Procedural changesSome time frames have also changed. For example, the Trademark Office now has 90 days to examine applications, which is an increase from the previous 30-day time limit. Now that a second- level appeal against a refusal jumps straight to the Court of Appeal, brand owners must be mindful of the new deadline being 30 days. Previously, it was 60 days before such an appeal went to the Court of First Instance.PenaltiesAnother change that will be looked upon favourably by brand owners is in relation to the penalties for infringements. Depending on the type of infringement, the minimum fines now start at either 50,000 Emirati dirham or 100,000 Emirati dirham, a significant increase from 5,000 Emirati dirham in the old law. The ceiling has been increased to either 200,000 Emirati dirham or 1 million Emirati dirham, a large jump from the old maximum of 10,000 Emirati dirham. The increases were needed as the figures applicable 20 years ago no longer carry the same value in the current economy. The newly assigned values should also act as a stronger deterrent to would-be infringers, or at least make pursuit of an action more attractive to a brand owner who knows that the courts will be less lenient.CustomsThe new law includes a customs provision that did not exist in the old law, although this section is not as detailed as the corresponding provision in the GCC Trademark Law. It remains to be seen whether further clarifications are contained in the implementing regulations.Israel boycottAs a result of the Abraham Accords Peace Agreement that was signed by the United Arab Emirates and Israel on 15 September 2020, the new law does not contain the previously included boycott provisions that had prevented Israeli nationals and companies from owning trademarks in the United Arab Emirates.Clarification neededThere are still a number of areas that need to be clarified. Further clarification is expected when the implementing regulations are published. For example, it is not clear:whether certified copies will still be required for priority claims;whether publication procedures will still require publication in two local newspapers;whether there will still be a grace period for renewals;what the extent of the information available on the new public database will be; andmost importantly, whether there will be any reduction in fees now that the United Arab Emirates is a multi-class system.Missed opportunities?For the most part, the new law is a welcome change and moves the United Arab Emirates towards modern practice and international standards. However, brand owners and practitioners will unfortunately still need to contend with the three-year reregistration rule, which can be very problematic. The concept is quite unique to the Middle East and is often viewed with frustration among clients, particularly as court orders to have the rule overturned are few and far between. The new law arguably extends the rule as it specifically states that it also applies to similar goods and services, which was not the case before, at least in terms of the formal wording. Regretfully, this is likely to be problematic for years to come and it is hoped that the next amendment will remove this provision once and for all.For further information on this topic please contact Renee Nugent at Bird & Bird by telephone (+44 20 7415 6000) or email ([email protected]). The Bird & Bird website can be accessed at www.twobirds.com.