The reality of a regional trade mark law in the Middle East has moved forward during 2014, with the approval by Saudi Arabia, Bahrain and Qatar of a revised draft of the Trade Mark Law of the Gulf Cooperation Council States (the GCC Trade Mark Law or Law).
All that remains is for the remaining three states which comprise the Cooperation Council for the Arab States of the Gulf (GCC), Kuwait, Oman and the UAE, to approve the draft Law and for the implementing regulations to the Law to be published. This brings the reality of a new GCC Trade Mark Law a step closer, with the possibility that it will come into force during 2015.
Some fundamental points
Enactment and timing
Following a previous draft of the GCC Trade Mark Law which was published in 2006, the current version has been drafted on the basis that it will apply in the six GCC states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
The publication of GCC Trade Mark Law in the GCC Gazette stated that the Law will become effective six months after the GCC Trade Cooperation Committee (which is comprised of the Trade Ministers of each of the GCC member states) has issued implementing regulations for the Law. However, it is likely that the Law will also need to be enacted in accordance with the legislative requirements of each GCC state.
To date, only Bahrain, Qatar and Saudi Arabia have taken steps to enact the GCC Trade Mark Law. However, we can expect the other GCC states to follow suit, in which case it is possible that the GCC Trade Mark Law could come into force relatively quickly.
A unitary or a unifying Law?
The GCC Trade Mark Law has been drafted on the basis that it is a unifying, not a unitary Law.
In other words, the Law does set out a single set of provisions which will apply across all GCC states. This should result in a unified position across all GCC states on matters such as the registrability of trade marks, the registration process and the enforcement of trade mark rights.
However, the Law does not provide for a single (unitary) registration or enforcement system. Each GCC state will continue to maintain its own Trade Marks Office which will continue to receive applications and register trade marks on a national basis. In order to register a trade mark in all six GCC states, it will still be necessary to file six separate national trade mark applications.
The GCC Trade Mark Law does not envisage setting up a single GCC Trade Marks Office or a single Court or enforcement authority for dealing with trade mark disputes. This is fundamentally different from the position under the GCC Patent Law which relies on a central registration system (operated by the GCC Patent Office), with enforcement dealt with at a national level.
Maintaining a unified approach
When the GCC Trade Mark Law comes into force it will, from day one, set out a unified position which will apply in all GCC states.
However, with each of the six GCC states continuing to operate both its own Trade Marks Office and independent Courts and enforcement authorities, it is inevitable that the Law will be subject to different interpretations. Accordingly, in order to ensure that the Law consistently functions on a unified basis across all GCC states, there will need to be some form of central Court or other body which is tasked with maintaining a consistent interpretation of the Law’s provisions.
Article 51 of the GCC Trade Mark Law appears to anticipate this problem by providing that the GCC Trade Cooperation Committee has the power to interpret the Law.
However, it remains to be seen how this will work in practice. For example, will the GCC Trade Cooperation Committee have a similar role to the Court of Justice of the European Union (CJEU), where the national Courts of EU member states refer issues of interpretation to the CJEU to be decided upon?
The position may become clearer when the implementing regulations for the GCC Trade Mark Law are issued, as these may set out procedures for bringing matters of interpretation before the GCC Trade Cooperation Committee.
The GCC Trade Mark Law is what it says it is – a trade mark law for the GCC states.
However, because the Law has been a drafted on the basis that it will come into effect as a national law in each of the GCC states, there is nothing to stop other countries in the region adopting the same Law. Such a step would extend the unifying effect of the GCC Trade Mark Law to any country which adopts its provisions, subject to the non-GCC country which has adopted the Law finding a way to ensure a consistent interpretation of the Law with the GCC states (whether by applying decisions of GCC Trade Cooperation Committee or otherwise).
The GCC Trade Mark Law is more than just a unifying law. It also includes a number of substantive provisions which amend the current position in some or all of the GCC states.
Some of the key provisions of the GCC Trade Mark Law are summarised below:
The definition of a Mark
The definition of a Mark (at Article 2 of the Law) expressly includes some forms of non-traditional trade marks, such as colour, combinations of colour, sounds and smells.
The express reference to these specific forms of non- traditional marks creates an expectation that it will be possible to secure registrations for such marks in each of the GCC states. However, there have been a number of well publicised cases regarding the protection of such marks in jurisdictions with more developed trade mark laws (such as the European Union, the US and Australia) where brand owners have struggled to obtain protection for certain types of non-traditional marks, despite the existence of legislation which appears, on the face of it, to be favourable.
It will, therefore, be interesting to see, once the GCC Trade Mark Law comes into force, the extent to which the Trade Marks Offices in the GCC states are prepared to grant registrations for these forms of non-traditional marks.
Right to register and claiming priority
The persons defined as having the right to register their trade marks in the GCC states is defined (at Article 5) as including “persons holding the nationality of, or residing in, a foreign country that is a signatory to a multinational treaty to which one of the GCC member states is a party”.
This is a significant extension to the current position in some GCC states and it goes further than the 2006 draft of the Law which restricted the definition to persons holding the nationality of a state which treats “the GCC state where he has applied for registration of his trade mark on a reciprocal basis”.
This provision can be read in conjunction with Article 11 which allows for a six month priority period to be claimed where a person has applied for a trade mark registration in a country that is a signatory to a multinational treaty to which one of the GCC states is a party.
As Kuwait will accede to the Paris Convention with effect from 2 December 2014, it will mean that eligible filings into or from all GCC states will be able to benefit from the six month priority period under the Paris Convention, without having to rely on the provisions of the GCC Trade Mark Law.
At present, it is only possible to file applications covering a single class in each of the GCC member states. None of the GCC states allows for multi-class applications to be filed.
The 2006 draft of the GCC Trade Mark Law expressly stated that a trade mark application may not include more than one class. However, this statement has been deleted from the 2013 draft.
The implication of this change is that, potentially, it may become possible to file multi-class applications in the GCC states. This would constitute a major shift in the historic practice of single class only applications in the GCC states.
In a region in which the national trade mark filing fees are among the highest in the world, this change – should it go ahead – will be hugely welcomed by applicants who may be able to increase the breadth of protection of their marks at a reduced cost.
However, this change in drafting only hints at the possibility of multi-class filings. We will need to wait until the implementing regulations to the GCC Trade Mark Law have been published in order to find out whether the current single-class system will remain, or if multi-class filings will become available.
Examination and opposition practice – Comparison of goods/services across classes
At present, the practice across most of the national Trade Marks Offices in the GCC region is not to take into consideration goods and/or services in different classes when examining a trade mark application. This practice also often applies in trade mark opposition proceedings.
Accordingly, if, for example, a rights holder has a trade mark registration in class 25 for clothing and it wishes to oppose an application for the same or similar mark in class 14 covering jewellery and watches, the prospects of success may be significantly impacted by the fact that these goods fall in different classes, even though they may otherwise be considered as complementary goods in other jurisdictions as they are frequently sold through the same outlets.
However, the 2013 draft of the GCC Trade Mark Law introduces (at Article 9) a statement that “goods or services listed in the same class may not necessarily indicate similarity. Likewise, goods or services listed in different classes may not necessarily be dissimilar”.
The introduction of this concept could lead to a significant change in the examination practice in the GCC region. On a practical level, it is likely to mean that rights holders can exercise and enforce their rights more broadly. However, on the flip side of this, rights holders may find that they are faced with citations of marks in other classes which previously would not have posed an obstacle to the proposed use and/or registration of their marks.
It will be interesting to see whether the implementing regulations provide any more guidance on this change and, perhaps, even more interesting to see how it is put into action by the GCC examiners should it come into force.
Treatment of well-known marks
The protection afforded to well-known marks is boosted by the GCC Trade Mark Law by a prohibition (at Article 3) against registering marks which constitute a “reproduction, an imitation, or a translation of a well-known mark or an essential part thereof” in relation to identical/similar goods and/or services. The Law also prohibits the registration of such marks in relation to dissimilar goods and/or services where the use of the mark would indicate a connection between those goods and/or services and the owner of the well-known mark, and would be likely to damage his interests.
This provision goes further than the 2006 draft of the Law which only mentioned translations of well-known marks and which did not address the possibility of the registration of such marks in relation to dissimilar goods or services.
The expansion of the scope of protection available to well- known marks will undoubtedly be welcomed by owners of internationally and regionally famous marks alike. Importantly, it appears that brand owners will have the opportunity to try to block the registration of such marks, even when they do not have any registered trade mark rights within the GCC and where the goods and/or services in question are different.
The 2013 draft of the Law also goes further in setting out the criteria for determining whether a mark is well-known than the 2006 draft of the Law (which simply stated that “regard shall be had to the extent to which the mark is known to the pertinent general public as a result of the promotion thereof”). The 2013 draft of the Law adds (at Article 4) that “the duration and extent of any registrations or use of the mark, the number of countries where it has been registered or recognised as a well-known mark, the value associated with the mark and the extent to which such value helps promote the goods and/or services to which it applies” shall also be considered.
Accordingly, it appears that owners of well-known marks will have increased scope to argue that their marks meet the required criteria based on the broader range of evidence which may be used to demonstrate this status. It will be interesting to see whether the implementing regulations to the Law will include any further guidance as to the test to be applied for assessing whether a mark is well-known and therefore afforded additional protection under Articles 3 and 4 of the Law.
However, one gap in the 2006 version of the GCC Trade Mark Law was the issue of the unauthorised use of well- known marks and this has remained unaddressed in the 2013 draft of the Law. Whether this gap will be addressed by way of the implementing regulations remains to be seen. However, until this is known, there will remain uncertainty as to whether well-known marks will be afforded a greater degree of protection under the Law in terms of blocking any unauthorised use by third parties as well as unauthorised registrations.
Partial assignment and cancellation of trade marks
The trade mark laws which are currently in place in the GCC states generally treat a trade mark as an asset which cannot be divided in that, in most GCC states, a trade mark registration may not be partially cancelled or assigned in part.
The GCC Trade Mark Law is more flexible in that it provides (at Article 27) for a trade mark to be assigned in whole or in part.
Also (at Article 23), a trade mark owner may voluntarily cancel its registration for all or part of the goods or services in relation to which it is registered. However, a cancellation action which is brought by a third party (either under Article 23 on the basis that a mark has been wrongly registered or under Article 24 on the basis of non-use) can only be in relation to the full registration (the Law does not allow for a partial cancellation action in these circumstances).
Geographical indications, collective and certification marks, public agency and professional instruction marks
Under the current trade mark legislation in place in the GCC, only very limited protection is provided to these forms of trade marks. The position under the UAE Trade Mark Law (Federal Law No. 7 of 1992 as amended) is typical, in that it simply provides that geographical names may not be registered or used if this would be misleading with regard to the provenance of goods or services.
The GCC Trade Mark Law goes further and, while it is far from comprehensive, one part of the Law is dedicated to geographical indications, collective and certification marks, public agency and professional instruction marks.
Rights granted – Exclusivity – Use in relation to identical goods
The GCC Trade Mark Law expressly provides (at Article 17) that “the owner of a registered trade mark shall have the exclusive right to use its mark and to prevent third parties from using its mark, or any identical or similar mark” in relation to identical or similar goods or services and in a manner which is likely to mislead the public.
Importantly, the Law also provides that a likelihood of misleading the public will be presumed when a mark identical to a registered trade mark is used in relation to identical goods or services. This removes the need for a trade mark owner to establish confusion where an identical mark is being used in relation to identical goods. In these circumstances, the burden of proof will transfer to the defendant to show that its use of the mark does not cause confusion (which is likely, at the very least, to be an extremely difficult task).
This change is likely to have a real impact in enabling trade mark owners to enforce their rights in straightforward cases which, under the legislation, can result in protracted proceedings due to the need to establish confusion.
The GCC Trade Mark Law sets out reasonably extensive provisions dealing with trade mark infringements. As with the current laws in the GCC, the GCC Trade Mark Law focuses on combating the counterfeiting of trade marks. The Law, as drafted, appears to cover (at Article 42) both registered and unregistered trade marks, and it allows action to be taken against identical and similar marks being used in relation to the same or similar goods or services.
The Law also restricts (through Article 42, Article 3.11 and 3.12) the use of trade marks which would:
- indicate a connection with the goods or services of the holder of a registered mark
- damage the interests of the holder of a registered mark
- diminish the value of the goods or services distinguished by a registered mark
The GCC Trade Mark Law allows (at Articles 42 and 43) for criminal penalties to be applied in infringement cases:
- In the case of a first infringement – a fine of up to SR 100,000 (equivalent to approximately USD 26,000) plus three months imprisonment
- In the case of a second infringement – a fine of up to SR 200,000 (equivalent to approximately USD 52,000) plus six months imprisonment and closure of premises
In addition (pursuant to Article 41), damages may be awarded in civil claims which may include a recovery of profits from the infringer. The Court may order (under Article 41.3c) the infringer to disclose the identity of any other parties involved in any aspect of the infringement.
The GCC Trade Mark Law also includes substantial provisions (at Articles 38 and 39) relating to the enforcement of trade mark rights through Customs. These provisions appear to supplement the existing GCC Common Customs Law together with relevant local laws, such as the Dubai Customs Law.
In summary, these provisions:
- provide the Customs authorities in the GCC with the express right to seize goods which are being imported, exported or which are in transit (either on their own initiative or on the application of the rights owner)
- require Customs to notify the rights owner of any seizure
- require the rights owner to issue legal proceedings within 10 days of receiving notification of the seizure, failing which the goods will be released
- require the Court to destroy any goods which are found to be infringing except where the Court may consider this to be inappropriate or where the destruction of the goods may pose serious damage to the environment of public health (in which case the goods may be disposed of outside commercial channels)
There are a number of positives with these provisions, not least that they expressly provide for goods in transit to be seized. It is also positive that the GCC Trade Mark Law does not follow the position of the draft UAE Anti-Commercial Fraud Law, the early drafts of which allowed for counterfeit goods to be re-exported.
There are, however, concerns as to the extent to which rights owners may be required to issue legal proceedings in order to secure the destruction of infringing goods, even when they have been abandoned by the importer/exporter. The broad discretion granted to Courts not to destroy goods in cases where they consider this to be inappropriate is also potentially a concern.
The GCC Trade Mark Law provides (at Article 39) that the powers granted to customs authorities to seize infringing goods (pursuant to Article 38) do not allow customs to seize goods which have been put onto the market in the exporting country by or with the consent of the rights holder. This provision appears to be focused on parallel imported goods, such that parallel imports cannot be seized by customs under the GCC Trade Mark Law.
However, this restriction in relation to parallel imported goods is stated as applying to Article 38, without mentioning any other provisions of the GCC Trade Mark Law. Accordingly, other remedies (such as a right to claim damages under Article 41) may potentially be available to trade mark owners in relation to parallel imported goods.
Given the prevalence of parallel imported goods in the GCC states, these provisions may well receive a great deal of scrutiny by brand owners seeking to combat parallel imports in the region once the GCC Trade Mark Law comes into force.
The introduction of the GCC Trade Mark Law is undoubtedly a very significant event. It will give rise to numerous improvements in the protection of trade marks in the GCC region.
At its very simplest, the unified laws and procedures offered by the GCC Trade Mark Law are likely to benefit brand owners through increased efficiencies. However, as ever, much will depend on the detailed interpretation and application of the Law in practice.
The contents of the implementing regulations will be important, as will the procedure for ensuring that a unified position is applied throughout the GCC states, whether this is maintained by the GCC Trade Cooperation Committee or otherwise.
Accordingly, for those brand owners with an interest in the GCC, the message is “watch this space”. As we get closer to the enactment of the GCC Trade Mark Law (and then once the Law comes into force), a number of the provisions summarised in this article (and their interpretation and application by the authorities) will come under increased scrutiny.
At that stage, we will have a better understanding of the effects of the draft Law in practice and we will be in a better position to gauge its overall impact on brand owners operating in the GCC region.