General rule
There is a general rule in most countries worldwide that states one must use their registered Trademark, or it may be subject to a potential cancellation by a competitor. The concept is known as ‘non-use’.
In the UAE, use of a trademark is not required for registration or renewal. However, a trademark is vulnerable to revocation by any interested party if there has been no genuine, effective, or continuous use of the mark (except possibly by a bona fide licensee) for a period of 5 consecutive years beginning on the registration date.
As a sole exception, this rule is not applicable on world-renowned trademarks as per article 4 of trademarks law. In other words, any application to cancel a world-renowned trademark based on the non-use for continuous 5 years, will be rejected.
UAE Federal Law
The UAE Federal Law No. (37) of 1992 is an important reference point. The mentioned law is applicable for the seven Emirates of UAE: Abu-Dhabi, Dubai, Sharjah, Ras Al-Khaimah, Ajman, Fujairah and Umm Al-Quwain.
Article 22 of this law is the appropriate provision in dealing with non-use. It states the following:
“At request of a concerned party, the competent civil court may cancel a registered trademark, if it is proven that such trademark has not been used for five successive years, unless the trademark owner proves that non-use of such trademark was for reasons beyond his control including, but not limited to, import restrictions and other government conditions imposed on the commodities and services related to such trademark.
For the purposes of this Article, use of the trademark by a person authorized its owner to do so shall be deemed a use of such trademark”
Initially, the applicant must demonstrate that the trademark owner has not used the mark as required by Article 22. If the applicant can put forward a robust case, then the burden of proof is on the owner of the mark to prove that there has been continuous use, contrary to the applicant’s claim.
Furthermore, as Article 22 implies, if the trademark owner can demonstrate a reason for non-use relating to import restrictions or imposed government conditions which are beyond his control, cancellation can be avoided.
Within this law, article 17 states that once a trademark is used continuously within 5 years of the date of registration, its ownership cannot be disputed. There is an exception: if the challenger can show the mark was registered illegitimately. Article 6bis of The Paris Convention for the Protection of Industrial Property states, “no time limit shall be fixed for requesting the cancellation or the prohibition of the use of marks registered or used in bad faith”.
Licensed use
Turning to the position where a trademark is used by a licensed business operator, in a distribution agreement, for example. In the absence of use by a registered holder during the initial 5 years, there is some ambiguity concerning use by a licensee where the license is not a matter of record. If this is the case, it reduces the likelihood that use by a licensee will constitute genuine use to keep the mark alive.
Article 31 explains:
“A licensing contract for use of a trademark shall be recorded in the trademark register. The license shall not have any effect unless being recorded in the register and declared in the manner set out in the executive regulation.”
By intensive analysis of the content of this article, we will find out that
Trademark owners should record all licenses in order to avoid any unwelcome prospect of dilution of their rights and thereby becoming exposed to challenges from interested parties to cancel a mark for non-use. This should not be overlooked. Furthermore, it is good business practice to record such contracts in the UAE Trademarks Office.
Many trademark owners usually are consciously avoid recording licensed trademark rights because of longwinded processes which might take months to be completed in some cases. This is understandable when there are other important business matters to be dealt with, but the importance of registering these contracts must not be underestimated. Trademark owners who faced the possibility of losing their trademarks because of this now knows better.
Given the widespread usage of license agreements in the UAE, the significance of Article 32 is obvious. It presents a straightforward mechanism for protecting the validity of trademark registrations against interested parties who wish to cancel for non-use. Al Suwaidi & Company is ideally placed to assist your business with this fundamental safeguard and any other IP requirements you may have.
Finally, it is worth noting the general rule that if a trademark is cancelled due to non-use, no-one except the original trademark owner will be able to register the same mark within a period of 3 years following cancellation (with some exceptions).