Dubai DIFC's new IP regulations provide welcome clarity

Munir Suboh, Partner and Head of Intellectual Property at BSA Ahmad Bin Hezeem & Associates in the Dubai office. Practicing in the Middle East since 2006, he has worked on numerous contentious and non-contentious IP works including trademarks, trade names, copyrights, patents, trade secrets and domain names. He also works on commercialisation and complex disputes of IP rights.

For contractual relationships, the DIFC courts provide many benefits to parties, especially as the respective laws tend to be more familiar for foreign parties

  

The Dubai International Financial Centre (“DIFC”) has supplemented the establishment of its own Intellectual Property (“IP”) Law with newly published IP Regulations, effective from 5 July 2021.

The DIFC first implemented its own IP Law back in 2019 and since then the authority had to hear and decide on IP cases that fall within its jurisdiction. The DIFC IP Law is more akin to common law and codifies many common law concepts in the UAE. Proceedings are also conducted exclusively in English, which makes this forum considerably more attractive for many foreign companies. However, to date the number of IP cases which are heard via the DIFC courts remains nominal and accordingly the IP Law itself is largely untested.

The IP Regulations provide some welcome clarity on the procedures by which complaints may be filed and the role of the DIFC IP Commissioner to support both enforcement and compliance. The IP Regulations specify the fees for complaints, inspections of a Respondents’ premises and appointing Experts. It is observed that the prescribed fees are minimal and should therefore encourage IP litigation via the DIFC courts, where jurisdiction permits.

In respect of obtaining jurisdiction, the regulations specify that documents and/or evidence is required that confirms “that the infringement, misappropriation or conflict occurred within the DIFC” in order to progress the complaint. The literal interpretation of this regulation would suggest that the complaint procedure is limited to IP harm which occurred within the DIFC geographically. However, it could be found that those with a presence in DIFC and the harm occurred elsewhere would also fall within the ambit of this definition. Furthermore, if the DIFC is selected as the agreed forum within a contract or license between parties, the parties reserve their right to contractual freedom and thus will be able to utilise the provisions of the DIFC IP Law. For contractual relationships, the DIFC courts provide many benefits to parties, especially as the respective laws tend to be more familiar for foreign parties.

The DIFC courts also ensure the adjudication of disputes occurs within a timely manner. For example, according to the IP Regulations, an Expert must deliver his report within a ten-day period as a standard time frame. This contrasts somewhat with the regular time frame for experts to complete their opinion(s) for cases that happen onshore.

To expand on the role of Experts further, one of the key developments of the Regulations is the establishment of an Expert Register by the IP Commissioner. Experts are often utilized by the courts in onshore Dubai and this has proved useful, especially where there are no specialized court structures in place. The DIFC Courts will also utilise this practice for IP matters, with the view to establishing its own strong IP adjudication system. Perhaps if the volume of IP cases increased, this development would pave the way for the establishment of specialized IP courts within the DIFC court system.

Interestingly enough, one of the most anticipated developments of the DIFC IP Law in 2019 was the codification of collection societies and its supplementary regulations on how a collection society may be established in the DIFC. Although collection societies had already been codified in the Federal Law No. 7 of 2002 On Copyrights and Related Rights, no collection society or body has been granted a license to operate in this capacity to date and as per Article 32 of the same act, collective bodies may not act on behalf of an author without license from the Ministry. This has likely been to the detriment of many authors who have not been able to adequately monitor, enforce and receive their royalties in the region.

As collection societies are now permitted to open within the DIFC and actively enforce the rights of its members, we may finally see the first collection society that is operational in the UAE that is able to pursue its members rights effectively. Whilst the decisions related to DIFC collection societies will be handled by the DIFC Court, the court orders are recognized onshore and will be enforceable within the UAE mainland and, theoretically, could be expanded to reach other GCC countries, based on applicable treaties and conventions. To this end, the IP Regulations expressly permits the coordination of the IP Commissioner with Federal and Local Authorities, and this particularly includes the sharing of information, assistance with inspections and all related matters.

© Opinion 2021

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