United Arab Emirates: Enforcement Of IP Rights In The GCC: 2016 Highlights

In 2016, some key changes were introduced in the Gulf Cooperation Council region (Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates).

Here, we look at what these key changes could mean for you in terms of enforcement of intellectual property rights.

Last Updated: 13 March 2017 | Article by Vanessa Delnaud and Marian Fayek |

Copyrights

New copyright law in Kuwait

In November 2014, Kuwait was moved from the US Trade Representative (USTR)’s Special 301 Report Watch List to the Priority Watch list, on the basis that it was not adequately and effectively protecting intellectual property rights – in particular because of non-deterrent penalties, and non-compliance of Kuwait’s copyright law with international standards. Kuwait is the only GCC country to appear on the U.S. watch lists.

In May 2016, Kuwait responded to the USTR‘s concerns by issuing a new copyright law (Law number 22 of 2016), which increases penalties, including imprisonment and fines in the event of the unauthorized use of an author’s work. The new law has increased prison sentences to between six months and two years (compared to one year maximum in the former law), and fines to between $1,650 and $165,200 (compared to $1,650 maximum in the former law). The new law also provides for the temporary closure of establishments for a maximum period of three months and the permanent withdrawal of their trade license in case of repeated offenses.

The question remains whether the judicial authorities will, in practice, impose stronger penalties for copyright violations.

UAE moving a step closer to the set-up of a collection body

UAE Copyright Law allows collective management of copyrights but it also provides that the societies administering authors’ rights and neighbouring rights must not perform any activities in the UAE before being licensed from the Ministry of Economy.

However, to date, there is no collection body duly licensed by the government to grant licenses in the UAE on a collective basis and manage the collection of royalties on behalf of rights owners for the public performance of music in the UAE. It means that companies wishing to play music in the UAE (such as hotels, outlets, malls, radios, TV channels) need to identify, negotiate, contract and pay individual copyright owners, publishers and/or record companies to obtain the relevant licences, which is administratively burdensome.

As a result, various companies in the UAE have been refusing to pay licensing fees for public performances of music until a collective licence agency is licensed by the Ministry of Economy, although the argument is not legally valid.

Based on the foregoing, the International Intellectual Property Alliance (IIPA) has recommended in its 2016 report that the UAE be placed on the USTR‘s Special 301 Report Watch List until the establishment and operation of a collecting society in the UAE.

However, the recent introduction of fees to set up and operate collection agencies could be an indication that the Ministry is considering licensing a collecting society to operate in the UAE. Twofour54, the Abu Dhabi government’s media focussed free zone, supported by the music industry across the region, is advocating and lobbying for a collection agency in the UAE. It recently submitted to the Ministry of Economy an application for an operating license for a music rights collective licensing organization (EMRL).

To conclude, it is important to note that some publishing and record companies in the UAE have launched blanket music initiatives to allow users to obtain a license to cover the public performance of their music repertoire.

Trademarks

Implementation of the GCC Trade Mark Law in Kuwait, Bahrain and Saudi Arabia

Important changes have been introduced in the GCC region further to the implementation of the GCC Trade Mark Law (the Law). The Law has now been implemented in Kuwait (in force since December 28, 2015), Bahrain (since May 29, 2016), and most recently Saudi Arabia (with effect since September 29, 2016). It is expected to come into force in the remaining GCC Countries by the end of 2017. We have set out below some the major changes that are expected under the Law.

Customs’ measures

The provisions of the GCC Trade Mark Law supplement the existing GCC Unified Customs Law, which does not expressly contain a section on procedures for intellectual property infringement.

It is interesting to note that the provisions of Article 38 of the Law related to the notification and withholding procedures of goods suspected of infringing IP rights are largely inspired from the EU Council Regulation n°608/2013 concerning customs enforcement of intellectual property rights (the “Regulation”). It even goes beyond since Article 38 expressly deals with goods in transit, unlike the Regulation.

Under Article 38 of the Law, rights owners are entitled to request suspension of suspect shipments with Customs, including goods in transit, as follows:

  • A right holder shall be entitled to lodge an application in writing with the customs authorities of each GCC Member State for the suspension of the withholding of infringing goods.
  • The customs authorities may, at their own initiative or upon the application of the right holder, order the suspension of the release of the goods imported, exported or in transit as soon as they enter the customs territory if it has acquired prima facie evidence are counterfeit or bear a trademark confusingly similar or identical to a registered mark in a manner that is misleading to the public.
  • If so, they shall notify the right holder and the importer of the suspension of the release and, upon the right holder’s request, the identity of the consignor, the importer and the consignee, and the quantities withheld.
  • Customs may release the goods withheld if the right holder fails, within ten working days from the notification of the withholding of the goods, to inform Customs of the beginning of civil or criminal proceedings (“legal proceedings leading to a decision on the merits of the case”).

Further, courts may order the destruction of any infringing goods at the expense of the importer, unless destruction poses serious damage to environment or public health, in which case the goods shall be disposed outside the channels of trade.

However, the provisions of Article 38 do not apply to small quantities of goods of a non-commercial nature contained in travellers’ personal luggage or dispatched in small consignments; or to goods put on the market in the exporting country by or with the consent of the right holder. This means that parallel imports cannot be seized by customs authorities.

Prior to the implementation of the Law in Bahrain and in Kuwait, customs had no authority to seize counterfeit goods without a court order, which resulted in goods being returned to the port of origin.

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