The UAE marketplace has been known, for many years, as one where brands from across the world are available. In addition to commercial and economic factors (such high levels of disposal income and large numbers of retail outlets), a key factor is the number of nationalities who comprise the expatriate population of the UAE and the ‘target market’ for brands from their home countries.
In this melting pot of international consumers and international brands, the registration of trade marks in the UAE is an invaluable and necessary step for the protection of brands and to enable action to be taken again infringers and oppose those third parties who may seek to file opportunistic trade mark applications.
Three essential lessons for trade mark owners in the UAE are:
1. Never allow a similar or identical third party trade name or trade mark to go unchallenged
It is vital that a business which owns a trade mark (or is in the process of registering a trade mark) prevents, wherever possible, a third party from registering a trade mark, or a trade, business or domain name, which is identical or similar, to the business’s trade mark.
While this is a globally relevant point applicable in all markets, it is particularly relevant in the UAE since:
challenging a registered right can be costly, time consuming and can have uncertain prospects of success; and
when a registration is secured by a third party, they can potentially avail themselves of a range of enforcement options that can be used against the ‘true’ owner of the trade mark.
In summary, allowing a third party to secure registration could severely affect the business’ rights of ownership and potential use of its own trade mark.
1. Retain control of your trade marks and brands
In the UAE, unlike in some Western jurisdictions, there are various steps to be taken with a range of local authorities before business activities can generally commence. These steps include, for example, business registration and obtaining an appropriate licence from the Department of Economic Development (‘DED’). Approvals from other authorities may also be required, depending on the sector and nature of the business.
It can be tempting for trade mark owners, who are partnering with third parties to operate their business in the UAE, to try and facilitate establishment of their brand in the UAE and ‘speed up the process’ by allowing partners, distributors or operators to file for the trade marks in their own name. In some cases, it is (incorrectly) assumed that it is necessary for the local operating entity to include the trade mark in its trade name.
Despite certain administrative steps which may need to be taken to permit the use of a trade mark by a non-owner of that mark, such as the licensing of the right to use the mark:
it is not a requirement of the UAE authorities for an operating entity’s trade name to include the trade mark of the brand which it markets; and
there is no requirement that any trade mark registration be in the name of the partner, distributor or operator.
The recommended strategy is for the trade mark owner to secure the registration of the trade mark in question and then licence use of the mark to the partners, distributors or operators.
In this way, the trade mark owner retains control. As mentioned above, trying to challenge control secured by a third party can be difficult and expensive.
1. Registration demonstrates ownership
It is important to remember that in the UAE, registration of a trade mark by a party at the Ministry of Economy (‘MoE’) provides the clearest evidence of ownership of the mark.
This MoE is a Federal Authority and a current registration certificate of a trade mark issued by the MoE is usually the only evidence required by a regulatory or licensing body in the UAE (such as the DED) or an enforcement authority (such as the police or customs) to demonstrate ownership, and enable activities to commence.
While it is possible to rely on unregistered rights, it can take a significant amount of time and costs, together with voluminous supporting evidence, to evidence the ownership of the unregistered right. It is far simpler and cheaper to secure registration than to assert ownership of unregistered rights.
For more information, please contact us on sectors@hadefpartners.com.
This article, together with any commentary, does not constitute legal advice. It is provided solely for information purposes on a complimentary basis, without consideration of any specific objectives, circumstances or facts. It reflects then current views of the writer which may modify in time and based on differing objectives, circumstances or facts. A writer's view may differ from views of colleagues and/or the firm. You should seek legal advice on each specific matter. Access to this article does not form an attorney-client relationship.
Summary
The enforcement of arbitral tribunal decisions in the UAE under the New York Convention may be old news, but the decision by the DIFC Court to enforce a New York court judgment back in April 2017 may not have had the recognition it perhaps deserved. In this article we run though the headline facts of this case which lead to the affirmation of the DIFC Courts’ jurisdiction to enforce the judgments of foreign courts in some circumstances.
New York Case
The Defendant, Essar Global Fund Limited (“EGFL”) had agreed to cover its liability under two contracts, provided that such payments were received in accordance with an agreed payment schedule. Should payments not be received according to the schedule, a larger settlement amount would become due from EGFL.
EGFL was notified that it had defaulted under the payment schedule and the Claimants applied to the Supreme Court of the State of New York for a ‘Judgment by Confession’. A ‘Judgment by Confession’ allows for judgment to be entered for a sum of money ‘confessed by a defendant to be due in an affidavit, and authorising the entry of judgment. The NY Supreme Court accordingly issued judgment (the “NY Judgment”).
DIFC Case
This dispute before the DIFC Courts arose out of one of the Claimants in this case (‘Midtown’) applying for enforcement of the NY Judgment, which was followed by an application for immediate judgment. The Defendant applied for a stay of Midtown’s application and a declaration that the DIFC Courts did not have jurisdiction to enforce judgments of foreign courts.
DIFC Judgment
In his judgment, Justice Sir Richard Field granted the Claimant’s application to enforce the NY Judgment and allowed immediate judgment.
The Judge’s decision clearly stated that the DIFC Courts do indeed have jurisdiction to enforce the judgments of foreign courts and confirmed that:
recognition of foreign judgments by the DIFC Courts is not a matter of ‘foreign affairs’ (which would mean that the matter was exclusively reserved to the UAE Federation) but a rule of private commercial law, based on a private consensual contractual arrangements; and
a previous DIFC Court of Appeal precedent that the DIFC Courts have jurisdiction to recognise and enforce foreign judgments, remains a binding precedent.
The Judge also helpfully clarified that the DIFC is still able to enforce judgments if:
the foreign judgment did not result from adversarial proceedings (as was the case in the NY Judgment which rather had resulted from a Judgment by Confession); and
there is a theoretical possibility of appeal (as was the case in the NY Judgment where there were pending motions to vacate the judgment).
Case reference
(1) Barclays Bank PLC (2) Credit Suisse Loan Funding L.L.C. (3) Midtown Acquisitions L.P. (4) Special Situations Investing Group Inc. v Essar Global Fund Limited [2016] DIFC CFI 036
For more information, please contact us on sectors@hadefpartners.com.
This article, together with any commentary, does not constitute legal advice. It is provided solely for information purposes on a complimentary basis, without consideration of any specific objectives, circumstances or facts. It reflects then current views of the writer which may modify in time and based on differing objectives, circumstances or facts. A writer's view may differ from views of colleagues and/or the firm. You should seek legal advice on each specific matter. Access to this article does not form an attorney-client relationship.