Enforcement

Trademark enforcement proceedings

What types of legal or administrative proceedings are available to enforce the rights of a trademark owner against an alleged infringer or dilutive use of a mark, apart from previously discussed opposition and cancellation actions? Are there specialised courts or other tribunals? Is there any provision in the criminal law regarding trademark infringement or an equivalent offence?

There are two types of proceedings available in Saudi Arabia for trademark infringement actions: administrative action and court action.

Administrative action can be initiated before the Anti Commercial Fraud Department (ACFD) in Riyadh. The ACFD used to have a centralised complaint management system and a complaint could be filed with the ACFD headquarters in Riyadh against infringement occurring in any Saudi city; however, recently, the ACFD instructed complainants to file a separate complaint for each city. The ACFD requires evidence of infringement in the form of a sample of genuine and infringing products, purchase bills from outlets selling infringing products and the address of the location. The process includes submission of an online complaint along with evidence, study of the case by the ACFD, raids on outlets offering infringing products and destruction of the infringing products.

Although the ACFD operates under its own law (Anti Commercial Fraud Law), in some court judgments trademark infringement cases were dismissed and plaintiffs were advised to administrative procedure as a first resort. A court also stated in its (debatable) judgment that any trademark infringement case will be premature and not maintainable if, prior to filing an infringement action, administrative action was not taken by the trademark owners. Administrative procedures are usually speedy, and in cases of prima facie infringement, ACFD inspectors may conclude complaints within a two-month period.

Apart from administrative action, trademark infringement actions can also be filed with commercial courts in Saudi Arabia. In each type of action, registration of trademark is a precondition for success. Unregistered rights are not recognised in Saudi Arabia except in the case of well-known trademarks, in which case the plaintiff is under a heavy burden of proof.

Border control measures are considered an effective approach in Saudi Arabia. The customs authorities in Saudi Arabia have set up a procedure to record registered trademarks with customs for vigilance in all upcoming consignments of imports into Saudi Arabia. The customs authorities will stop, either on their own suspicion or by a request filed by a trademark owner, any suspected shipment, and will contact the registered trademark owner or its legal representative to confirm whether the suspected held products are genuine or counterfeit. The customs authorities are cooperative in this procedure and usually share pictures of suspected products very quickly and, where required, samples are also provided for the purpose of confirmation.

In any case, the trademark owner is obliged to initiate a case before a competent court within 10 days for the issuance of the order to destroy the imported goods or remove them from the channel of business. Goods harmful to public health and the environment are usually destroyed.

Other than Saudi trademark law providing criminal provisions, the provisions of the Anti Commercial Fraud Law may be extended to trademark infringement in exceptional circumstances. Under Saudi trademark law the following are offences:

  • counterfeiting or imitating a registered mark so as to mislead or confuse the public, or using in bad faith any counterfeited or imitated mark;
  • identifying goods or services in bad faith with a mark owned by others;
  • knowingly selling, offering for sale or trading, or possessing with the intention of trading any goods bearing counterfeited or imitated marks; or unlawfully using such marks or offering services under them;
  • using a non-registered mark in cases provided for in items 2 to 11 of article 3 of the law;
  • unlawfully inscribing upon the mark, papers or commercial documents a representation that might lead to the belief that he or she has obtained registration of such mark;
  • deliberately and in bad faith failing to affix the registered trademark on the goods or services it distinguishes; and
  • knowingly possessing tools or material intended to be used in the imitation of registered trademarks or famous trademarks.
Procedural format and timing

What is the format of the infringement proceeding?

Infringement proceedings are initiated by submitting a statement of claims to a competent court, or an online complaint before the administrative authority in the case of administrative action. In court proceedings, statements of claims will be served upon the defendants with instructions to submit a written statement on the date of the scheduled hearing. In Saudi Arabia, litigation is conducted through an exchange of written documents and oral arguments. In the case of technical matters, the judge can appoint an expert to submit his or her advice on any specific issue, although it is not the usual practice of courts. Oral testimony is acceptable as evidence.

Criminal proceedings in trademark cases are initiated by a public prosecutor upon the recommendation of the ACFD. Saudi criminal procedure law is applicable to all criminal proceedings.

Burden of proof

What is the burden of proof to establish infringement or dilution?

In Saudi Arabia, trademark rights are acquired through registration; therefore, a registration certificate is sine qua non to bring an infringement action. It is also the duty of the plaintiff to establish confusing similarity. In the case of unregistered well-known trademarks, the plaintiff is under an additional burden to prove that the mark is famous. The new trademark law stipulates the criteria for establishing the fame of a trademark, which are the extent of its recognition by the concerned consumers as a result of its promotion, the length of period of registration or use thereof, the number of countries of registration or fame or the value of the mark and the extent of its impact in the promotion of goods or services that the mark is used to distinguish.

In any action based on a well-known mark, all the above elements shall be proved by the plaintiff. If a well-known mark is actually used in Saudi Arabia, it is usually very convincing in proceedings.

Standing

Who may seek a remedy for an alleged trademark violation and under what conditions? Who has standing to bring a criminal complaint?

The owner of a registered trademark or a licensee, authorised under agreement to do so, may bring a civil trademark infringement action if any third party has commercially exploited the registered trademark without authorisation. A criminal complaint may be initiated by the ACFD if, inter alia, the trademark infringement also has elements of fraud to consumers. The ACFD may initiate such actions suo moto or on a complaint submitted by the rights holder. In the latter case, the ACFD will examine the presence of criminal elements independently.

Border enforcement and foreign activities

What border enforcement measures are available to halt the import and export of infringing goods? Can activities that take place outside the country of registration support a charge of infringement or dilution?

Saudi Arabia has effective border control measures. A registered trademark owner can take benefit of border measures by recording its trademark with Saudi Customs. Kadasa IP has a memorandum of understanding with Saudi customs for cooperation over anti-counterfeiting actions. According to practice, the customs authorities will keep watch on imports bearing recorded trademark and seize any suspected consignment. Local agents are provided samples or images to confirm the nature of the products. The customs authorities require written confirmation on the nature of the goods seized. In case of counterfeit goods, the customs authorities will seize the goods in accordance with their internal procedure.

In such cases, foreign activities outside Saudi Arabia should establish a cause of action in Saudi Arabia. Any unauthorised exploitation of registered trademarks through activities done outside the jurisdiction of Saudi Arabia will establish actionable cause if such goods are attempted to be imported into Saudi Arabia. The Saudi customs authority has a strong mechanism of border control. Any suspected infringing or counterfeit goods are seized at the border, either by a complaint or on the initiative of customs officials. The customs officials will communicate with the rights holder or its authorised representative (recorded at the customs authority) to confirm the status of the seized goods. In the case of counterfeit goods, the consignment is seized at the border and the customs authority will initiate a procedure to destroy the goods or remove them from commercial channels.

Discovery

What discovery or disclosure devices are permitted for obtaining evidence from an adverse party, from third parties, or from parties outside the country?

There are no legal provisions in place for a discovery procedure. In practice, discovery of fact or discovery of documents is not possible in legal proceedings. The judge can, however, depending on the circumstances, ask any party to produce certain documents, but the law does not oblige litigating parties to produce them.

Timing

What is the typical time frame for an infringement or dilution, or related action, at the preliminary injunction and trial levels, and on appeal?

The time frame for litigation varies from case to case. Preliminary injunction proceedings can be concluded within two months. At trial level, it may take 12 to 16 months. Appeals before the Court of Appeal are usually concluded within four to six months.

Administrative infringement actions can be concluded within three to four months.

Limitation period

What is the limitation period for filing an infringement action?

There is no limitation period, however, an action shall be filed during validity period of a registered trademark.

Litigation costs

What is the typical range of costs associated with an infringement or dilution action, including trial preparation, trial and appeal?

A typical infringement action may cost between US$15,000 to US$25,000 before the Saudi courts. Administrative actions before the ACFD usually cost between US$5,000 to US$7,000.

The award of damages is possible only in theory. Although Saudi trademark law has provisions on the award of damages, the Saudi courts follow sharia principles on damages. Under the Islamic principle, the damages should be actual, quantifiable and not based on speculation. Reputational damages are not recognised under this principle. The heavy burden of proof upon the plaintiff makes it difficult to establish damages to the satisfaction of the court, and in practice damages are not awarded.

Appeals

What avenues of appeal are available?

In infringement and cancellation actions, the decision of the first instance court can be appealed by the aggrieved party before the Court of Appeal. The Court of Appeal may either reject the appeal or remand the case back to the first instance court along with observations. In the case of a refusal of appeal, the Court of Appeal will issue a written judgment, which will be final and enforceable.

See questions 15 and 16 for the appeal process in trademark refusals and opposition proceedings.

Defences

What defences are available to a charge of infringement or dilution, or any related action?

Possible defences in Saudi Arabia may include the following:

  • the plaintiff’s trademark is unregistered or subject to a disclaimer;
  • the defendant’s use of a trademark falls under a permitted exception of trademark law (ie, descriptive use);
  • the defendant has a trade name registration and is authorised to use its trade name;
  • the plaintiff’s trademark is different from the defendant’s mark to the extent that there is no likelihood of confusion for unwary purchasers;
  • the mark was used in good faith without knowledge of registration of a similar or identical trademark; and
  • if the infringement action is brought by the owner of unregistered well-known marks, the defendant can dispute the fame of the well-known mark in Saudi Arabia.
Remedies

What remedies are available to a successful party in an action for infringement or dilution, etc? What criminal remedies exist?

A successful infringement case, whether administrative or in court, can end up in the issuance of an order to destroy the infringing goods. The actual damages and lost profits can be considered for apportionment of monetary relief, but in practice this is rarely granted. An award of damages or monetary relief is possible only in theory. Although Saudi trademark law has provisions on the award of damages, Saudi courts follow sharia principles on damages. Under the Islamic principle, the damages should be actual, quantifiable and not based on speculation. Reputational damages are not recognised under this principle. The heavy burden of proof upon the plaintiff makes it difficult to establish damages to the satisfaction of the court, and in practice damages or monetary relief are not awarded.

Interim injunctions are available in law, but in practice hardly granted by Saudi courts. Application for interim injunctions should be based on a prima facie case, which should include proof of trademark registration, and prima facie infringement of the registered trademark. Where the nature of imitation is such that a question of similarity between the marks may be subject to consideration, an interim injunction will not be granted.

The trademark law declares certain acts as offences, which include the following, among others:

  • counterfeiting or imitating a registered mark so as to mislead or confuse the public, or using in bad faith any counterfeited or imitated mark;
  • identifying goods or services in bad faith with a mark owned by others;
  • unlawfully inscribing upon his or her mark, papers or commercial documents a representation that might lead to the belief that he or she has obtained registration of such mark;
  • deliberately and in bad faith failing to affix the registered trademark on the goods or services it distinguishes; and
  • knowingly possessing tools or material intended to be used in the imitation of registered trademarks or famous trademarks.

Depending on the offence committed, monetary punishments can be between 1,000 Saudi riyals and 1 million Saudi riyals. A recidivist can be punished with double punishments as provided for specific offences and reoffending may also lead to temporary closure of his or her business.

ADR

Are ADR techniques available, commonly used and enforceable? What are the benefits and risks?

ADR is highly encouraged in all forms of litigation and has strong roots in sharia law and traditions.

Arbitration in Saudi Arabia is governed under the new Law of Arbitration, issued by Royal Decree No. M/34, which is based on the United Nations Commission on International Trade Law Model Law on international commercial arbitration, although it is not a verbatim adoption. Under this law, parties can exclude the jurisdiction of Saudi courts to take cognisance of a dispute between parties. Recourse to arbitration may save the parties time in a dispute and they may select a specialised arbitrator who has the relevant knowledge and skill to settle a dispute. The parties can adopt the language of the proceedings and place of arbitration. A notable concern is that the provisions of an arbitration agreement, either separately executed or by reference in a main agreement, cannot exclude the jurisdiction of Saudi courts on the invalidation proceedings of awards. The law provides a list of provisions for bringing an invalidation action; therefore, bearing in mind the Saudi legal system, there is always an element of uncertainty in the enforcement of awards, especially where the arbitration was held outside Saudi Arabia or by application of a non-Saudi law.