The United Arab Emirates has taken a leading role in the Middle East and North Africa (MENA) region in the promotion of innovation and the implementation of strategic policies to fight against counterfeiting.

At the seventh Regional Intellectual Property Crime Conference in MENA, recently held in Dubai and hosted by the Emirates Intellectual Property Association (EIPA) and Interpol, the United Arab Emirates shared its experience in these fields with government officials and decision makers from the region and beyond.

The discussions focused on:

  • the importance of regional and international cooperation in the fight against counterfeiting;
  • the use of new technologies in the fight against IP crime;
  • successful enforcement activities in the United Arab Emirates; and

  • challenges facing the UAE authorities.

IP enforcement actions in 2017

The event gathered officials from UAE enforcement authorities, including the Dubai and Sharjah police, Dubai Customs, Dubai Department of Economic Development (DED) and the Dubai public prosecutors.

Representatives from these stakeholders highlighted successful IP enforcement actions in the United Arab Emirates during 2017.

In 2016 the DED launched an online filing system to allow rights holders to upload registered trademarks in order for DED inspectors to monitor those marks in the marketplace. Since the system was introduced, there has been a notable upturn in the number of complaints filed with the DED. The recordal system has resulted in 1,268 trademark infringement cases in the first six months of 2017. The DED has also closed down 6,881 Instagram accounts dealing in infringing or counterfeit products this year.

The Dubai police has been active in the fight against IP infringement. In 2017, it dealt with 212 trademark infringement cases (in addition to copyright infringement cases), where the total estimated value of the infringing goods amounted to approximately $78.5 million.

To the north of Dubai, the police in the neighbouring emirate of Ajman have seized 452,086 counterfeit goods with an estimated value of approximately $23 million.

These recent enforcement successes contribute to the UAE Vision 2021 for a competitive knowledge economy promoting innovation and creativity.

IP challenges

During the conference, participants also discussed the challenges that must be addressed by the UAE authorities in order for the United Arab Emirates to maintain its role as a leading nation in the protection of IP rights.

Enforcement of IP rights in free trade zones

In the United Arab Emirates there are more than 45 free trade zones, with many more still in development.

Free trade zones pose complications to brand owners in relation to the enforcement of IP rights, as the procedure and the authority with jurisdiction can differ between free zones. When a brand owner wants to take action against infringing acts in a free trade zone, it should verify who has enforcement responsibility for the free zone in question, and whether there are any processes in place through which complaints can be filed. Possible authorities include:

  • the relevant police authority within that emirate;
  • the Customs authority;
  • the Department of Economic Development (DED);
  • the free zone authority (if any); or
  • the civil courts.

For instance, in the most well-known UAE free zone, Jebel Ali Free Zone, Dubai Customs has authority for dealing with infringing and counterfeit products, whereas in the China Mall Free Zone in Ajman, it was recently agreed that the DED would have jurisdiction for actions in the mall, but not in relation to the warehouses.

Steps must be taken to try and remove some of the ambiguities so that rights holders are clear how complaints are to be filed. Rights holders are asking for more cooperation between free trade zone authorities, Customs, police and the brand owners themselves, in order to help in the fight against counterfeiting in free trade zones.

Non-deterrent penalties

Both UAE officials and brand owners agreed that the penalties provided for under UAE laws for counterfeiters are not deterrent to counterfeiters or infringers.

The UAE Trademarks Law provides for a maximum fine of $2,275 and the possibility for a maximum imprisonment of one year. While the imprisonment would be a significant deterrent, this is rarely used.

However, the new UAE anti-commercial fraud law does provide for tougher penalties for anyone dealing with counterfeit goods (ie, imprisonment sentences of up to two years, and fines up to $275,000). The maximum penalties are reserved for pharmaceutical and food products.

While it has not yet been implemented and there is no indication as to when it may come into force in the United Arab Emirates, the Gulf Cooperation Council (GCC) Trademarks Law will introduce a significant increase in the maximum sanctions to be applied in trademark infringement cases, with fines up to $260,000 as well as imprisonment of up to three years. These can be doubled for repeat offenses.

Limited award of damages

Traders of counterfeits also remain undeterred by the amount of damages awarded to IP right owners by UAE courts to compensate for the damage suffered as a result of infringing acts. UAE civil courts are, as a general rule, reluctant to award high amounts of damages, even in infringement cases.

Improvements are expected from the future implementation of the GCC Trademark Law pursuant to which damages awarded to the right holder may include a recovery of the infringer's profits. It remains to be seen whether the courts will use these powers.

Re-exportation of infringing goods

Another major challenge faced by IP right owners in relation to the United Arab Emirates, as well as the wider region, is that Customs may re-export infringing products rather than destroy them.

This is expected to change with the future implementation of the Customs' measures provisions of the GCC Trademark Law, pursuant to which 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 will be disposed of outside the channels of trade.

Comment

Despite the challenges that must still be addressed by the UAE authorities, brand owners have already seen noticeable progress in the enforcement of their IP rights in the country, in particular through the specialised IP court circuits.

Our recommendation is that if a brand owner has not already done so, it should take steps to record its UAE trademark registrations with the Dubai DED.

This article first appeared on WTR Daily, part of World Trademark Review, in December 4, 2017. For further information, please go to www.worldtrademarkreview.com.