The Role of Trademarks, Copyright and Industrial Designs in a Franchising Arrangement Joycia Young, Partner The role of IPR in Enhancing Competitiveness of Businesses and Industries Beirut, Lebanon Wednesday 29 June 2011 Franchising Current The IMF predicts solid economic growth of business trends about 5.5 % expected across MENA region Decreasing dependence on oil dependence and the need to diversify economies Move from a focus on physical asset base to an intangible asset base By 2020, GCC population is forecast to grow by about one third to about 53 million, vast majority will be under 25 Optimism prevails: US franchisors are still increasingly looking to the Gulf region for franchising and growth opportunities Applicable Agency laws Laws Commercial codes Companies law Civil Codes Judicial Procedural Code Trade marks law Copyright law Trade secrets/unfair competition law Employment law Other laws which regulate import of goods, labelling Trade marks IP as valuable In 2008-09 The Coca Cola Company Limited's assets balance sheet highlighted the immense value of IP assets: trade marks with indefinite lives were valued at USD$6.042m goodwill was valued at USD$3.988m combined value of these two assets represented 23% of the company‟s total asset base. How are a company's valuable IP assets: identified? protected? valued? commercialised? Where does the On the balance sheet value lie? Through licensing or sale and transfer Used as security to obtain debt finance Increasing reliance on IP assets as a source of competitive advantage Investors and lenders are interested in well manage IP portfolios, a single, strong patent may present a number of financing sources What is a trade mark? In broad terms, a “trade mark” is any sign capable of being represented graphically which distinguishes one entity‟s goods or services from those of its competitors. The US Supreme Court has declared that a trade mark can be "almost anything at all that is capable of carrying meaning". A trade mark may consist of: - Words - GUCCI - Letters or numbers - 501, 007, 747 - Designs/logos Some interesting marks Intel Trademark: The mark consists of a five tone audio progression of the notes D FLAT, D FLAT, G, D FLAT and A FLAT. Reg. No. 2315261, 16 November 1999 Status: Registered Goods and Services: Computer hardware and computer operating software, microprocessors, integrated circuits and semiconductor devices Registrant: Intel Corporation. Design Phrase: The mark consists of a five tone audio progression of the notes D FLAT, D FLAT, G, D FLAT and A FLAT. UPS brown Trademark: Design Only (Color) Reg. No.: 2901090, 09 Nov 2004 Status: Registered Goods and Services: Transportation and delivery of personal property by air and motor vehicle (1920) Registrant: United Parcel Service of America, Inc. Design Phrase: The drawing is lined for the color brown. The mark consists of the color chocolate brown, which is the approximate equivalent of pantone matching system 462c, as applied to the entire surface of vehicles and uniforms. The mark consists of the color brown alone. The broken lines indicate the position of the mark and do not form part of the mark. Tiffany blue Trademark: Design Only (Color) Reg. No.: 2359351, 20 Jun 2000 Goods and Services: Jewelry, precious metals (1939) Leather products (1939) Registrant: Tiffany and Company Design Phrase: The mark consists of a shade of blue often referred to as robin‟s-egg blue which is used on boxes. The matter shown in broken lines represents boxes of various sizes and serves to show positioning of the mark. No claim is made to shape of the boxes. Registration of Except for in KSA, the registration of a trade Trade Mark mark licence is not necessary for the agreement Licences to be enforceable between the parties. The primary purpose of registration is so that the licence may be enforced against third parties e.g. in the event of infringement by a third party or a cancellation action based on non-use, registration will enable the franchisor to rely on the franchisee's licensed use. To register a trade mark licence in GCC countries, the agreement must be signed by both parties, translated to Arabic and legalised. Duration of the licence cannot exceed the validity period of the registered trade mark. Copyright Copyright – What is copyright? The basics There is no copyright in an idea Copyright protects the expression of an idea / facts / news Copyright is an automatic right There is no need to apply to register - although recordal is possible in many countries in the Gulf Requirements: Recorded (written or electronic form) A work must be “original” (i.e. not copied) Copyright – What does copyright protect? Subject matter Copyright subsists in: literary works (books, report, poems) artistic works (paintings, drawings) musical and dramatic works photographs, sound recordings films, software, typographical layout Ownership of Starting point: copyright author is the first owner of copyright Ownership in most countries outside of the region: works owned by employer as a result of: - statutory provisions; and/or - assignment provisions in contracts of employment express (or implied) assignment of commissioned work Ownership of Nuances of regional law copyright author is owner of work no automatic ownership by employer - no statutory provision - no assignment of copyright in (“5 or more or all”) future works assignment must comply with law - in writing - specify subject of work … Retrospective assignments necessary to transfer ownership from employees / agencies (after work created) Copyright – Diligent use of copyright notices Practical tips © 2010 Joycia Young “This work is protected by copyright and may not be used or reproduced in any form without the prior consent of the copyright owner” Copyright recordals Ministry of Economy A claim of ownership Regional Official language is Arabic, all trade mark aspects of IP documents, court proceedings must be in laws Arabic Laws emanate from the French civil codes No (common law) of passing off No official English translation of IP laws No system of Court precedent First to file jurisdiction Impact of legal and non-legal aspects Limited availability of injunctions In the UAE, IP laws are Federal and cover trade marks, copyright, patents and industrial designs. The laws are enforced at Emirate level. A word about Disputes Governing law As a general principle, parties are free to and dispute choose governing law. resolution Courts will apply that law unless inconsistent with Islamic/Shari‟ah law, public order, morals, or, in KSA, local law. In KSA, parties are free to choose foreign laws in relation to agreements that are not subject to registration (e.g. master franchise/ development agreements). Store franchise, IP licence and supply agreements that need to be registered will be subject to KSA law. Enforcement Enforcement of foreign arbitral awards under of Foreign New York Convention: Arbitral All GCC countries and Lebanon are party to Awards the New York Convention on foreign arbitral awards. However, the enforcement of foreign arbitral awards has not been tested in relation to franchise disputes. Courts will enforce a foreign award only if the award does not conflict with public order, morals (including Shari'ah) and in KSA, local laws. Countries that are party to the New York Convention Country Accession Entry into force Bahrain 6 April 1988 5 July 1988 Egypt 9 March1959 7 June 1959 Jordan 15 November 1979 13 February 1980 Kuwait 28 April 1978 27 July 1978 Lebanon 11 August 1998 9 November 1998 Oman 25 February 1999 26 May 1999 Qatar 30 December 2002 30 March 2003 Saudi Arabia 19 April 1994 18 July 1994 Syria 9 March 1959 7 June 1959 United Arab 21 August 2006 19 November 2006 Emirates Trade and Trade names are corporate, or business names corporate registered by entities often as a legal names prerequisite to carrying on business. In any given jurisdiction, the ownership and registration of identical trade marks and trade names may vest in different parties. Companies need to protect both. Trade marks registered in service classes (eg retail services) are often used to challenge opportunistic trade name registrations Domain names Domain names Domain names are trade marks/trade names in cyberspace Arabic domain names launched in October 2010 egypt in English] in Egypt.] مصر jordon in English] in Jordan.] اﻻردن qatar in English] in Qatar.] قطر alsaudiah in English] in.] السعودية Saudi Arabia syria in English] in Syria.] سورية tunis in English] in Tunisia.] تونس emarat in English] in the UAE.] امارات Domain name recovery actions UDRP / .aeDRP – arbitration Complainant must demonstrate that: the disputed DN is identical or confusingly similar to its TM; the respondent does not have a right or legitimate interest in the DN; and the respondent registered and used the domain name in bad faith. Interesting 'ebay.ae' - WIPO held that the use of DN was decisions an attempt, for commercial gain, to attract Internet users by creating a likelihood of confusion with established TM. 'sonyericsson.ae„ - WIPO held that the Registrant, who had not used the DN, registered it primarily for the purpose of selling it to the Complainants for more than the out- of-pocket costs. Thanks for participating. Any questions? ©All images courtesy of Google Images.