Impact on rights holders


Action points

With progress being made towards easing sanctions against Iran, many businesses are looking to expand their operations into the country. This update considers what this means for rights holders – in particular, the extent to which rights holders are permitted under the existing EU and US sanction regimes to protect and enforce their IP rights in Iran.


Iran has an estimated population of around 80 million and an economy valued at $420 billion. Accordingly, the lifting of sanctions offers a significant opportunity for both foreign and domestic businesses.

Progress continues to be made through negotiations between Iran and the group of nations known as 'P5+1' (the United Kingdom, the United States, France, Russia, China and Germany). If an agreement is confirmed within the next few weeks, sanctions may be eased in exchange for a more transparent nuclear programme, potentially opening up Iran for business to the rest of the world.

Impact on rights holders

The continued progress in negotiations between the P5+1 and Iran has prompted international businesses to consider what they should be doing to prepare for potential opportunities in the country. For rights holders, this raises the question of what steps can be taken to ensure that they have appropriate protection in place for their IP rights in Iran.

Contrary to the belief of many businesses, Iran is not out of bounds when it comes to the protection and enforcement of IP rights. Existing EU and US sanctions permit rights holders to protect and enforce their IP rights in Iran, as long as they do not deal with any individuals or entities which have been blacklisted as designated persons.

Therefore, it is possible (subject to these caveats) to register IP rights in Iran. It is also possible to conduct 'clean-up' campaigns by identifying IP infringements in Iran and taking appropriate enforcement action.

However, difficulties do remain, particularly when it comes to the commercialisation of IP rights. Businesses must ensure that they do not conduct business with any company or individual (eg, licensees, distributors, customers and professional advisers) that is listed on the designated persons registers maintained by national governments in the European Union and United States.


Rights holders with a presence in the European Union or the United States, or with employees who are EU or US nationals, must comply with all applicable sanctions. Therefore, businesses with interests in Iran must continue to comply with the EU and US sanctions to avoid serious penalties.

EU sanctions against Iran

The European Union has implemented economic and trade sanctions against Iran and specific entities and individuals in Iran.

The EU sanctions apply to:

  • any person in the European Union;
  • entities which are incorporated in the European Union;
  • EU nationals; and
  • any business carried out within the European Union.

The EU sanctions restrict certain activities in relation to Iran under EU Regulation 267/2012, as amended.

There are two key restrictions under the EU regulations: identity-based restrictions and activity-based restrictions.

Identity-based restrictions

These restrictions prohibit persons who are subject to the EU regulations from engaging in any economic activity with certain designated persons. The relevant factor is the identity of the individual or entity with whom the person is trading (as opposed to the activity which is being undertaken).

Persons subject to the EU regulations must freeze the funds and economic resources of designated persons and are restricted from dealing with them, whether directly or indirectly through a third party.

Accordingly, it is important to check the lists of designated persons (which are maintained and updated by national governments in the European Union), to ensure that business partners and customers do not appear on these lists.

Activity-based restrictions

The EU regulations also prohibit certain defined activities from being carried out in Iran by persons subject to the EU regulations.

The activities targeted in the EU regulations are principally those connected with the oil and gas and shipping industries (in particular, the export of certain key equipment and technology), insurance, banking and finance.

Accordingly, persons subject to the EU regulations must identify precisely what activity is being carried out in relation to Iran in order to ascertain whether the activity is prohibited. Unless an activity is expressly prohibited by the EU regulations, it is permitted.

The protection and enforcement of IP rights is not restricted in the regulations.

Accordingly, rights holders are not prohibited from protecting and enforcing their IP rights in Iran. However, they must ensure that they avoid any dealings which would breach the identity-based restrictions by carrying out due diligence on existing and future licensees, distributors and customers in Iran to ensure that they are not designated persons.

Breach of the EU regulations may result in the imposition of penalties on companies and individuals, including imprisonment and fines.

US sanctions against Iran

The Office of Foreign Assets Control (OFAC) at the US Department of Treasury administers the US sanctions regime.

The United States has imposed financial and trade sanctions which generally prohibit US persons from trading with sanctioned countries, including Iran. OFAC maintains and publishes a list of specific individuals and companies which are considered specially designated nationals.

The US sanctions apply to 'US persons', which is widely defined to include:

  • any person in the United States;
  • entities incorporated in the country (and their foreign branches);
  • US subsidiaries (under the Iran sanctions) or branches of foreign companies; and
  • US citizens and permanent residents.

Scope of restrictions

US persons must comply with the Iranian Transactions and Sanctions Regulations (31 CFR Part 560) and other relevant laws, subject to certain exceptions.

The US sanctions generally prohibit US persons from engaging in transactions concerning Iran. Failure to comply can result in the imposition of severe penalties, including civil and criminal fines and imprisonment.

Exceptions for rights holders

Rights holders can rely on exceptions relating to the protection and enforcement of IP rights under the US sanctions. In particular, the following transactions are permitted in Iran:

  • the filing and prosecution of any application to obtain a patent, trademark, copyright or other form of IP protection;
  • the receipt of a patent, trademark, copyright or other form of IP protection;
  • the renewal or maintenance of a patent, trademark, copyright or other form of IP protection;
  • the filing and prosecution of oppositions or infringement proceedings with respect to a patent, trademark, copyright or other form of IP right, or actions taken to defend such proceedings;
  • the payment of fees due to the Iranian government; and
  • the payment of reasonable and customary fees and charges to attorneys in Iran.

These permitted transactions are subject to the prohibition on any dealings with, or the transfer of any funds to, specifically designated persons, as determined by the secretary of the Treasury. For example, no payments can be made to the accounts of any specifically designated persons, regardless of whether the funds relate to the protection or enforcement of IP rights.

Action points

Rights holders that wish to ensure that they have suitable protection in place in Iran can take proactive steps, including by reviewing:

  • existing registrations for IP rights and ensuring that any gaps in protection are filled; and
  • the Iranian market in order to identify potential infringements of IP rights so that enforcement action can be taken.

However, care must be taken at all times to operate within the applicable sanctions regime, including avoiding dealing with any individuals or entities which have been blacklisted as designated persons.

For further information on this topic please contact Rob Deans or Harriet Balloch at Clyde & Co by telephone (+971 4384 4000) or email (rob.deans@clydeco.ae or harriet.balloch@clydeco.ae). The Clyde & Co website can be accessed at www.clydeco.com.

This update was prepared with the assistance of Patrick Murphy (partner) and Douglas Maag (senior counsel).

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.