On Sunday 29 May 2016, Bahrain became the second country to bring the Gulf Cooperation Council (GCC) Trade Marks Law (the TM law) into effect. This follows the TM law coming into force in Kuwait in January 2016. The introduction of the TM law brings significant increases in the official fees for trade mark protection in Bahrain.

This article looks at the impact of the TM law and fee increases in the Gulf region for rights holders.

Background - the GCC Trade Marks Law

The GCC is a six country trading bloc in the Arabian Gulf. Its member states are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

The TM law was published in mid-2013 by the GCC Secretariat, following many years of discussions.

In order for the TM law (and its implementing regulations) to come into force at the national level it needs to be accepted and published by each of the member states.

To date, only Kuwait and Bahrain have taken the necessary steps. We await developments for Oman, Qatar, Saudi Arabia and the UAE. The expectation is that countries will publish during 2016, and that the TM law will be in effect in all member states by 2017.

What does this mean for rights holders?

Unlike the GCC patent law, which provides for a unitary right covering the six member states through one application, the TM law is a unifying law and does not introduce a single filing system.

Rights holders looking to protect trade marks in the GCC member states will still need to register in each country of interest.

While the GCC member states will be governed by a unifying law, it is likely that there will still be scope for interpretation of the national laws and practice to differ between the member states. The TM law provides for a "Commercial Co-operation Committee" to have the power to interpret the TM law and suggest amendments to it. However, we will have to wait and see how the Committee will work in practice, who makes up the Committee and who would be entitled to address issues or questions to the Committee.

What changes will the TM law bring?

In each member state, the TM law brings about wide-ranging changes over the preceding national laws.

The definition of a trade mark is now broader, for example "shapes" and "colour" are specifically mentioned. As such, it should be possible to consider protection of non-traditional trade marks in countries in the region where this was not previously possible - such as in Saudi Arabia.

However, this may also be one of the first areas where we will see if the countries implement and interpret the law in different ways. At present the officials in Saudi Arabia are very reluctant to allow non-traditional marks to be accepted for registration, whereas the UAE accepts most non-traditional marks on a prima facie basis.

The TM law also regularises the filing requirements for each country.

Applicants will require:

  1. A notarised Power of Attorney, legalised to the relevant country's embassy where signed outside of the country;
  2. A copy of the certificate of incorporation/trade licence for the applicant; and
  3. A legal translation of the trade mark if it includes any non-Arabic words.

These must be available at the time of filing and cannot be filed late.

If priority is being claimed, a copy of the priority document is also needed at the time of filing, though the original can be filed within three months.

The TM law presented an opportunity to move to multi-class systems for registration. It made provision for this but the implementing regulations have made it clear that the systems will remain single class filing systems. This has a considerable impact on the costs for protection.

Rights holders should also note that the laws and the implementing regulations will bring about changes to time periods for rights holders to undertake certain tasks.

For example, under the TM law, the non-extendable period in which oppositions can be filed will be consistent across all GCC member states, at 60 days from the date of publication. Under national laws opposition periods differed between the member states. In some countries, such as the UAE and Kuwait, the TM law will mean increased times for filing oppositions, whereas for Oman, Qatar and Saudi, the opposition period will be reduced once it is in effect.

Similarly, for late renewals, the grace period under the TM law will be six months, whereas for Kuwait it was previously three months, and for the UAE it remains three months until the GCC law comes into effect.

Country Opposition periods
(national  laws)		 Opposition period
(GCC law)		 Renewal grace period
(national laws)		 Renewal grace period
(GCC TM law)
Bahrain 60 days 60 days (non-extendable) 6 months 6 months (non-extendable)
Kuwait 30 days 3 months
Oman* 90 days 6 months
Qatar* 4 months 6 months
Saudi Arabia* 90 days 6 months
UAE* 30 days 3 months

(*The GCC law is not yet in effect in Oman, Qatar, Saudi and the UAE so the periods under the national laws still apply)

The TM law also provides brand owners with a positive right, in so far as a registered trade mark provides the owner with the "...exclusive right to use...and to prevent third parties from using its mark...". While not clearly stated in the law, a registration could therefore provide the owner with an initial defence to infringement. Any infringer would need to cancel the registration in order to remove this "right to use" before being able to stop ongoing use of a registered mark.

The TM law now makes it clear that it is not mandatory for trade mark licences to be recorded in order to have effect against third parties. For many years this was an area of contradiction in some countries, such as the UAE, where different advisors took different views as to whether record was mandatory, or advisable. The new law makes it clear that recordal is not mandatory.

The new TM law also introduces much harsher penalties and greater powers to authorities in relation to the enforcement of rights. For a person who deals with mala fide in a forged or counterfeit trade mark, the courts can issue fines of between 5,000 Saudi Riyals (approximately USD 1,350) and 1,000,000 Saudi Riyals (approximately USD 266,650) or imprisonment of not less than one month and not more than three years, or both a fine and custodial sentence.

Interestingly, the TM law does not only impact upon the users of the trade mark system, but also upon the trade mark registration offices, by imposing a number of deadlines on the offices in each country. For example, applications must be examined within 90 days of being filed, similarly opposition decisions must be issued within 90 days of the opposition hearing taking place.

In the last 12-18 months, the offices in the region have made considerable steps to speed up the examination process and clear backlogs. This appears to have been undertaken in order to be able to meet the deadlines imposed under the TM law. The TM law is silent as to what happens if the deadline is not met. It should not raise any questions over the validity or otherwise of any resulting registration.

The impact of the TM law

We have yet to see the impact of the TM law in Kuwait. It should mean that rights holders looking to the Gulf countries will have better opportunities for protecting their rights in this increasingly important commercial region.

Unfortunately, while the TM law brings with it broader rights, it also means a loss of useful provisions from some of the national laws. The current Omani law makes provision for "honest concurrent use", something which has not been carried through to the TM law. Also, a number of the national laws make provision for "series marks", which again has not been included in the TM law.

Bahraini fee increases

As well as introducing the TM law, the officials in Bahrain also published significant fee increases across the board for trade mark related work in Bahrain.

  Old fees New fees
Application fees 30 dinar (USD 80) 100 dinar (USD 265)
Publication fees 30 dinar (USD 80) 50 dinar (USD 132.50)
Registration fees 60 dinar (USD 160) 500 dinar (USD 1,325)
Opposition fees 20 dinar (USD 53) 200 dinar (USD 530)
Renewal fees 60 dinar (USD 160) 650 dinar (USD 1,724) includes publication fees

This has followed the recent trend of trade mark related fees increasing through the region.

We are not aware of any reasons given as to why the fees are increasing, though as mentioned above, the offices now have to meet deadlines for progressing matters and so significant efforts have been made. Additionally, there is an increasing move to online filing and online renewals as the Gulf countries introduce the TM law. Bahrain will be moving to electronic publications of the official Trade Marks Gazette from June 2016. It is possible that the fee increases are intended to help with the implementation and development costs for online filing.

The reduction in backlogs and the speeding up of the registration process is good news for rights holders as it means that they are obtaining registered rights more quickly than was previously the case. As for the most part, rights holders require registered rights for enforcement purposes, this reduction in timescales has been a considerable benefit to brand owners looking to take action against suspected counterfeits/infringements.

Budgetary pressures for brand owners in the GCC Member States

With the increase in UAE fees in May 2015, Kuwait in January 2016, and now Bahrain in May 2016, there is an expectation that the remaining GCC countries will also increase their fees upon the TM law coming into force. There is no formal indication at the time of writing as to if or when any of the remaining member states will increase their fees. We await the publication by the member states to see if there are any increases in the other countries.

The fee increases mean that rights holders looking to obtain or maintain protection in the region may be well-advised to revisit their protection strategies, in order to determine their most appropriate scope of registered protection. The difficulty for rights holders is that in the GCC, registered rights are key for enforcement.

Generally in the GCC member states, registration and renewal fees are high by international standards, particularly when the costs of legalised supporting documents are also factored in. As such, for many companies, a scaled-back protection strategy has already been adopted to manage costs for the region - for example by not filing as many trade marks or in as many classes as would be registered elsewhere. The fee increases will mean that these strategies will be placed under even more scrutiny due to budgetary pressures.

What steps should rights holders take?

Rights holders will need to work carefully with advisors to ensure that they are not left exposed though insufficient protection in what may be key commercial markets for them. It may prove in the long term to be a false economy for a company not to protect a mark, or not to protect in particular classes: cutting back in this way may leave scope for the same or confusingly similar marks to pop up in the spaces left, or for the company to be unable to stop infringing or counterfeit products if they do not have registered rights.

The Madrid Protocol - a viable option

Of the GCC countries, only Bahrain, together with Oman, is a member of the Madrid Protocol system for International Registrations. Other members of the Madrid Protocol in the MENA region (as 15 April, WIPO) are Algeria, Bahrain, Egypt, Iran, Morocco, Oman, Sudan, Syria and Tunisia.

The Madrid Protocol therefore offers qualifying brand owners a possible way forward in obtaining protection in Bahrain and Oman without the impact of these fee increases.

Syria, another country which has recently increased its fees, is also a member of the Madrid Protocol and so the International Registration system is an option for rights holders looking at Syria also to minimise the effect of fee increases.

One of the concerns in this region in using the Madrid Protocol has been in relation to the recognition and enforcement of rights by the enforcement officials. Historically, the rights holder did not receive any proof of registration of a designation, so it was difficult to show the owner's rights to enforcement officials.

Fortunately for Bahrain and Oman, it is possible for rights holders who obtain protected designations of International Registrations, to apply to the Trade Marks Office and pay an additional fee to obtain a national registration certificate which clearly outlines their protected rights in each country via the international registration.

For rights holders who expect to enforce their rights, in oppositions or other contentious matters, obtaining the local registration certificates is recommended to help prove and enforce rights.

The other benefit of using the Madrid Protocol is the fact that it is a multi-class system. As such, while it is not possible to file a multi-class application through the national filing systems in Bahrain and Oman, international designations in these countries are in effect multi-class filings. The filing costs and ongoing management costs of an international designation covering more than one class are therefore considerably lower than for corresponding national registrations.

Rights holders who consider using the Madrid Protocol in this region should seek local advice prior to filing as it is still the case that some trade mark offices in Arab countries will raise public policy objections if an International Registration designates Israel as well as Arab countries. Rights holders will need to make use of the national filing system alongside the International Registration route to try and avoid such objections arising.

Closing remarks

The ongoing implementation of the GCC Trade Marks Law brings with it opportunities for brand owners. The broader definition of a trade mark means that rights holders can revisit non-traditional marks in their portfolio in countries where they could not previously register. Also the increase in penalties for infringements and counterfeits will help in the fight against such products.

The TM law has also made provision for some services to be conducted online, and some offices have already introduced online filing (such as Saudi Arabia and the UAE). These systems are relatively recent, but already the benefits in terms of efficiency and ease of use have been felt by local representatives.

These positives have been somewhat tempered by the increase in official fees that are coming into effect with the TM law. However, if through these increases it means that rights holders have access to more effective and efficient registration systems, then this will be good news.

It is unfortunate that the TM law did not bring with it a single filing system for the GCC countries or multi-class filings for rights holders. The author's personal view is that moving to a multi-class system, with appropriate fee reductions for additional classes, would have led to increased filings and revenues for the member states.

These changes provide rights holders with an existing portfolio in the Gulf region, an opportunity to review and revisit the portfolio in order to ensure that adequate protection is in place and to consider whether steps can be taken to protect certain marks that were not previously available to the company.

As part of any consideration, whether for enhancing an existing portfolio, or for rights holders looking to obtain rights in the region for the first time, rights holders should also factor in the possible use of the Madrid Protocol. For qualifying companies, this may present a viable option for obtaining cost-effective protection in some of the GCC member states.