UAE: Amended IP Laws take effect

The laws on copyright and trademarks in the United Arab Emirates (“UAE”) have been repealed and replaced as of 2 January 2022. The new laws, introduced last year as part of the "Year of the 50th" celebrating the fiftieth anniversary of the foundation of UAE, are intended to keep pace with the developmental achievements of the UAE and reflect the country’s aspiration as an R&D and innovation hub. This article will provide a brief overview of these new laws: Federal Decree-Law No. 38/2021 on Copyrights and Neighbouring Rights (“Copyright Law”) and Federal Decree-Law No. 36/2021 on Trademarks (“Trademarks Law”).

Copyright Law

The Copyright Law repeals and replaces Federal Law No. 7/2002 on Copyrights and Neighbouring Rights as amended (“Repealed Copyright Law”). The Copyright Law largely replicates the Repealed Copyright Law however there are certain significant amendments which indicate a strengthening of rights for businesses and employers commissioning the creation of copyrighted works. These amendments are:

• Possibility of Future Assignment: The Copyright Law follows the Repealed Copyright Law in prohibiting a blanket assignment of future works however the new Article 15(2) states that an author may “conclude a contract” in respect of future works pursuant to the Copyright Law’s implementing regulations which are yet to be published. We look forward with interest to publication of the implementing regulations as the inability to assign the totality of future works can be a practical challenge for businesses commissioning the development of software and other IP works and can also be a challenge in corporate due diligence exercises, potentially leading to leakage of business value. Presently, businesses are well advised to enter into periodic IP assignments with rights holders to ensure that they are the owners of created works.
• Confirmation of “Work for Hire” Doctrine: The Copyright Law contains a new Article 28 which appears to put the “work for hire” doctrine on a statutory footing in the UAE. “Work for hire” is the concept that any IP created during the course of employment belongs to the employer and not the employee. The new Article 28 specifies that: (a) copyright in a work created for the benefit of another person shall vest in such person; (b) copyright made by an employee or worker during and related to its work shall vest in its employer taking into account the intellectual effort of the worker; and (c) copyright made by an employee or worker not related to the business of the employer and which does not use the employer’s experiences, information or tools shall vest in the employee or worker. The establishment in law of the “work for hire” doctrine recognises the UAE’s commitment to being a hub for the creative and digital industries.
• Increased Penalties – note software licensee risks: Article 39 increases the potential fines for copyright infringement from a maximum of AED 50,000 to AED 100,000 (previous penalty was AED 10,000 – AED 50,000 under the Repealed Copyright Law). Article 40 also introduces new more severe penalties for (a) manufacturing or importing counterfeit works; (b) disrupting or impairing electronic data aiming at managing copyrights; and (c) downloading or storing computer programmes, applications or databases without a licence from the author or rightsholder. Such offences now carry a minimum imprisonment of 6 months and/or a fine of between AED 100,000 – AED 700,000 (previous penalty was minimum 3 months imprisonment and fine of AED 50,000 – AED 500,000 under the Repealed Copyright Law). Higher penalties apply to reoffenders. The increased penalty for downloading computer programmes without a licence is something that, in particular, enterprise software users should be aware of. Interpreted literally, businesses who exceed their licence permissions/metrics in software licence agreements are potentially committing a crime under the Copyright Law and could face significant fines or imprisonment (without prejudice to other contractual remedies that the software licensor may wish to pursue). Enterprise software licences can be complicated to negotiate and interpret and it is important that businesses procuring software licences understand their usage entitlements and obtain sufficient legal and technical advice.

Trademarks Law

The Trademarks Law repeals and replaces Federal Law No. 37/1992 on Trademarks as amended (“Repealed Trademark Law”). The Trademarks Law largely replicates the Repealed Trademarks Law but certain points of note of the Trademarks Law include:

• Recognition of 3-D, smell, hologram and sound trademarks: The definition of trademark has been expanded to include three-dimensional, hologram and smell marks. Sound marks can also be registered as a standalone right for the first time (previously sound marks were only capable of registration as part of trademark). This is an exciting development which indicates the UAE’s willingness to recognise cutting edge and new types of IP.
• Recognition of Geographical Indications (“GIs”): GIs will now be capable of registration as a trademark in accordance with the implementing regulations yet to be published. GI is defined as any indication showing that a good has originated in the territory of a member country of the World Trade Organisation or in a region, location, or place of that region if the good’s quality, reputation, or other characteristics are primarily due to its geographical origin. GIs have been recognised in several other jurisdictions for some time and we welcome the recognition of GIs as a badge of origin for goods and services coming from the UAE.
• Increased Penalties: Fines have been increased to between AED 100,000 - AED 1,000,000 for the following offences: forgery or counterfeiting; knowingly using a forged or counterfeit trademark; using in bad faith a trademark owned by another; possession of material for the imitation or counterfeit of a registered trademark; and importing or exporting of counterfeit products. A reduced fine of AED 50,000 – AED 200,000 applies to the sale or possession of counterfeit products and the use of an unregistered trademark in a manner to suggest that it has been registered. This is a stark contrast from the Repealed Trademark Law which set minimum fines at AED 5,000.

Although the new laws bear similarities to the laws which they repeal and replace, rights owners should be aware of the Copyright Law and Trademark Law and be mindful that further amendments and clarifications may be introduced by each law’s implementing regulations which are yet to be published. However, as is clear from the increased penalties for non-compliance with the laws, the UAE is committed to protecting intellectual property and upholding the rights of creators.