Unified trademark law for GCC has pros and cons

Since 2007, there have been significant talks between members of the Gulf Co-operation Council (GCC) about adopting a unified trademark law. This article will look at key elements of the GCC Unified Trademark Law.

The main focus of the GCC trademark law is to create uniformity between the local trademark laws of the GCC member states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates). The GCC trademark will establish a more unified set of regulations for trademark protection in GCC states, but it is important to point out that the GCC trademark law will not provide a unified filing system. Rights holders are still required to file separately in each GCC country in order to ensure protection and enforcement.

Key features

Trademark definition and multi-class applications. To continue from recent developments and the introduction of new technology that allows rights holders to identify their brands through means other than as conventional trademarks, the GCC Unified Trademark Law has broadened its definition of trademarks to include non-traditional trademarks, such as sounds and smells.

In some GCC states, such as the UAE, sound trademarks are already recognized and registrable under current trademark legislation, while in other states such as Saudi Arabia sounds as unconventional trademarks are not recognized under current legislation. Under the GCC Unified Trademark Law, rights holders have the opportunity to protect their trademarks in a more unified way.

Under the GCC Unified Trademark Law, multi-class trademark applications will also be allowed. This is a significant change, as it is currently only possible to file applications covering a single class in all GCC member states.

Famous trademarks. Through the GCC Unified Trademark Law, famous trademarks are provided a greater ambit of protection. The law prohibits the registration of such marks that constitute a reproduction, imitation or translation of well-known marks. The law also prohibits registrations of a mark with relation to dissimilar goods, whereby consumers may be led to believe that the goods or services emanate from the same trader.

The law also provides clear criteria as to the determination of famous trademarks. To date, the determination of whether a trademark is considered famous or not is left to the appreciation of each state’s courts, and reviewed on a case-by-case basis. Under the GCC Unified Trademark Law, conditions for a mark to be declared a well-known mark have been clearly stipulated and can be summarized as follows:

1. Extent of recognition by consumers resulting from the marketing expenditures of the trademark owner, worldwide registration;
2. The duration and extent of registrations and use.

Dealing with infringers

Trademark infringement. The GCC states all have well implemented provisions to deal with trademark infringers. Similarly, the GCC Unified Trademark Law has implemented provisions to address infringement cases regarding registered and unregistered trademarks. Article 42 of the GCC Unified Trademark Law sets out maximum penalties for trademark infringement:

• A fine of between SAR5,000 (US$1,330) and SAR1 million and/or imprisonment for between one month and three years where a person counterfeits a registered trademark; and
• A fine of between SAR1,000 and SAR100,000 and/or imprisonment for between one month and one year where a person knowingly sells goods that contain a counterfeit or unlawfully affixed trademark.

This is a significant increase compared to penalties awarded, for example, in the UAE, where the penalty is limited to one year imprisonment and a fine of between AED5,000 (US$1,360) and AED10,000. One explanation for this is that GCC states have collectively set such amounts as a deterrent affect to curb infringement and counterfeiting activity.

Trademark offices

Official fees in the GCC. Although the GCC has no unified trademark filing system, article 50 of the GCC Unified Trademark Law states that executive regulation must set the charges with respect to the procedure carried out under the law. While the implementing regulations have not yet been released, there have been considerable increases in official fees in the past year in the UAE and Kuwait, and prior to that in Qatar and Saudi Arabia.

Despite these unusual hikes in trademark charges, there remains a notable gap in the amount of fees imposed by trademark offices in the GCC. In light of the above-mentioned provisions, it would seem that the implementing regulations are likely to carry a new schedule of charges that will be binding in all GCC states for charges related to trademark prosecution procedures.

It is still unclear which fee model will be adopted as the unified schedule of charges, whether the highest fees (in excess of US$3,000 in the UAE) or perhaps a fraction of this, as per fees applicable in Oman. Should a unified fee schedule be applied, rights holders will have to significantly increase their budgets for the region, and some may even limit their scope of protection, opting to file in the major markets (UAE, Saudi Arabia and Kuwait) and foregoing smaller ones such as Oman and Bahrain.

Good news

The prospect of having a unified trademark law in the GCC in place is good news, as it will allow rights holders to enjoy the same protections but under a more unified method. Although separate trademark filing will still be required, some argue that managing trademark portfolios in the region will be easier and more accessible, given that maintaining registrations will be more aligned though the GCC states.

That being said, there are challenges with the introduction of the GCC Unified Trademark Law. Some GCC states may find it difficult to maintain their obligations as set out in the law. The reality remains that the level of capacity and expertise varies drastically from one GCC trademark office to another.