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- Trademark Litigation
Recognizing the importance of trademarks in the world of trade and business, the Kingdom of Saudi Arabia adopted the Trademark Law by Royal Decree No. M/21 of 28 Jumada I 1423 on August 7, 2002. Saudi Arabia accepted the Gulf Cooperation Council States’ (Hereinafter referred to as “GCC”) New Trademarks Law (Hereinafter referred to as “NTL”) on 26/07/1435 H (April 26, 2016) by Saudi Royal Decree No. M/51 approving the Saudi Council of Ministers resolution No. 306 dated 20/07/1435 H. (April 20, 2016). As a result, the NTL replaced the prior law (Trademark Law of 2002). (The GCC Trademark Law, 2016). The NTL attempts to harmonise local trademarks in the Gulf Cooperation Council (GCC) countries of Saudi Arabia, Bahrain, Qatar, Oman, and the United Arab Emirates.
[Picture Credit: Gettyimage]
Article 2 of the NTL defines a trademarks as any name, word, signature, letter, figure, drawing, logo, title, hallmark, seal, picture, engraving, and pack that has a distinctive form or any other mark or collection of markings used to differentiate goods or products of one company from those of another. This designation, based on a non-exhaustive list of signs that can be considered or registered as trademarks, led to the creation of the CTM, which can readily replace the term trademark when used by the law due to the nature and function as unique signs identifying products and services.
The CTM difference has merit, particularly because the NTL has broadened the scope of trademark protection by include odour in the trademark term. The new odour identification overlaps with the subject of this blog since it specifies the aroma of perfumes and other cosmetic products as a trademark that must be protected; a provision that was missing from the trademark law of 2002 described above.
As a result, after incorporating the CTM into the NTL’s trademark concept, it’s critical to consider if it may be protected through the NTL.
Enforcement of New Trademark law in GCC
The NTL has made it possible for the owner of the CTM to file a complaint with Saudi Customs or a specialised court to stop selling and importing counterfeit items that are similar or identical to those indicated by the registered trademark. Having stated that, the relevant processes are outlined in NTL article 38.
In fact, article 38 of the NTL gives the owner of a CTM the right to submit a written request to the Department of Customs Authority to seize and detain cosmetic products from being traded if he has reasonable grounds to believe that those imported cosmetic products are imitating, forging, or carrying a mark that is identical or similar to his registered CTM in a way that may cause public confusion. Furthermore, within 10 days of becoming aware of the shipment, the owner of a CTM may file a case with the appropriate court, the Board of Grievances (BOG), and alert the Customs Authority of that jurisdiction to stop customs release for the imitated cosmetic products.
If it is discovered that the seized cosmetic items counterfeit, forge, or carry a trademark that is confusingly similar to a registered CTM, the confiscated cosmetic products will be destroyed at the importer’s expense.
The NTL protects the CTM’s protection by establishing precise processes to prevent any infringement or imitation; the owner of the CTM may also file a petition to get an order to take preventative measures.
These precautionary measures could include gathering detailed information about the infringement of the CTM and all related cosmetic products, as well as keeping relevant evidence, detaining the imitated cosmetic products, preventing the allegedly counterfeit cosmetic products from being commercially used in the market, preventing them from being exported, and stopping the counterfeiting action.
Additional enforcement actions are specifically mentioned in article 38 of the NTL, which recognises the right of the customs release authority to act motu proprio, regardless of any complaint or application from any concerned person or entity, to issue a decision prohibiting the import, transit, or sale of any good identified by a trademark that is confusing to the public. This provision gives the customs release authority ad hoc competence, allowing for more efficient execution of the CMT’s protection.
On the other hand, according to article 40 of the NLT, the BOG may request that the owner of the CTM submit evidence supporting the act of counterfeiting or counterfeiting that is about to occur to the registered CTM, as well as sufficient information to allow the Ministry of Commerce and Investment (2016) to take precautionary measures and assist in the identification of the concerned cosmetic products. These precautionary steps are necessary to prevent impending counterfeiting and to protect the rights of the relevant CTM.
The NTL gives the owner of a CTM the right to sue the BOG for the loss he suffered as a result of the counterfeiting act, which includes the counterfeiter’s profit; the court will determine the appropriate compensation based on the value of counterfeit cosmetic products, the given retail price, and any other legal standard requested by the owner or determined by experts.
Furthermore, even if the unlawfully put CTM was removed as stated expressly in article 41 of the NTL, counterfeit cosmetic items with unlawfully installed CTM shall never be issued to the commercial markets. This is also true globally, as evidenced by the Guangzhou Tai’e v. Lacosta case, which occurred in China. The court ordered Lacosta to pay $74,000 in damages for utilising a CTM that was similar to Guangzhou Tai’e’s CTM and placing it on the same items, causing public confusion.
After stating the foregoing, the NTL included more than fifteen descriptions in its article 3 that do not qualify signs for registration as CTM in Saudi Arabia or any of the GCC states. A CTM cannot be registered for a sign that has no distinctive or unique character, is based on information customarily given to known cosmetic products, or is based on the normal sketches and photographs of cosmetic products.
In addition to fake, forged, counterfeit, or mimicked trade names, the registration of a CTM cannot include any honorary degrees (i.e., dermatologist, Dr., scientist, etc.) with no legal proof of having them, and it cannot include deceptive information about the origin of the cosmetic product. On the other hand, the law prohibits the registration of trademarks that are confusingly similar to a previously registered CTM on the same or related cosmetic products if their use will mislead or confuse customers about the products of the pre-registered trademark owner or impact his interest.
The legislation prohibits the registration of a CTM on cosmetics if its use may cause consumers to overlook similar cosmetics. Last but not least, there is a mark that is just a reproduction, imitation, or translation of a well-known CTM or a portion of a previously registered CTM that is intended to be used on cosmetic products that are similar to or identical to those identified by the well-known CTM. If a trademark is registered, the plaintiff has the right to request that the registration be cancelled. At this point in the research, it’s vital to refer to the NTL’s punishments, which give trademarks in general, and the CTM in particular, the strongest protection among other distinctive signs like geographical indications or domain names, etc. These penalties, as stated explicitly in the NTL, give the owner the ability to defend his CTM in criminal proceedings.
Punishments on Violating CTM Protection Laws
The NTL specifies the penalties that will be applied based on the infraction in article 42.
Anyone who misrepresents a registered CTM or imitates it in a way that misleads or confuses the public, or uses any misrepresented or imitated CTM in bad faith, as well as anyone who puts a registered CTM owned by another person on other products in bad faith and without consent, faces a penalty of one month to three years in prison and/or a fine of 5,000 to 1 million SR. Anyone who willfully sells, offers for sale, possesses with the goal of selling, or unlawfully uses any products with an imitated CTM faces a penalty of one month to one year in prison and/or a fine of 1,000 to 100,000 SR. Anyone who unlawfully writes any papers on his mark or commercial documents that may lead to believe of his ownership or registration of such mark, as well as anyone who knowingly and in bad faith fails to notify the product to its registered CTM, will face the same penalty. Finally, anyone in possession of tools or materials intended to be used to imitate registered or well-known CTMs is liable to the same penalties.
When a person commits the same offence again, the penalty is increased. It is worth noting that if the defendant has been wrongfully accused as a result of a violation of the plaintiff’s rights, the defendant is entitled to compensation by filing a court order for compensation within 90 days of the end of the 20-day period following the order of precautionary measures or the final judgement date of a claim involving the CTM.
As previously stated, the Saudi legislature has gone a long way to ensure the protection of CTM in Saudi courts. Cosmetics are a multibillion-dollar industry with a high return on investment. Saudi authorities must be concerned with raising awareness about cosmetic trademark protection rules and regulations, as well as defining their role in preventing counterfeiting of cosmetic trademarks.
To summarize, the Saudi Kingdom made enormous efforts to gain cosmetic trademarks in the Saudi market. The GCC Trademark Law was passed by the Saudi legislature in order to join forces with other GCC member states in combating commercial fraud in the cosmetics industry, as well as to prohibit cosmetic trademark imitation and counterfeiting. All of these efforts demonstrate that the Saudi market securely governs cosmetic trademarks, creating an attractive environment for foreign cosmetic business investments; in addition, the establishment and empowerment of the Saudi Authority of Intellectual Property, which is responsible for centralized intellectual property protection in the Kingdom of Saudi Arabia, will undoubtedly pave the way for further CTM protection.
Author: Anuja Saraswat – a student of B.A.LL.B (Hons.) from NMIMS Kirit P. Mehta School of Law (Mumbai), in case of any queries please contact/write back to us via email firstname.lastname@example.org or at Khurana & Khurana, Advocates and IP Attorney.