Saudi Arabia: Fee Levels: Why Brand Owners Need To React Fast In The Middle East And North Africa

Last Updated: 28 September 2016
Article by Jon Parker

This article originally appeared in the October/November 2016 edition of World Trademark Review.

Recent fee increases are just one area of change creating challenges for brand owners in the Middle East and Africa

Since 2014 there have been significant changes to trademark law and practice in the Middle East and Africa (MENA). These have included fee increases (some steep), moves to online capabilities and, in a few countries, significant changes to classification systems. This article explains the key changes and suggests brand owners can do - now and in the future - to minimise their impact and manage portfolios more effectively in this region of increasing commercial importance.

Fee increases

Fee rises are among the most widely discussed of the recent changes. In what was already an expensive region for trademark protection, rights holders now face increases in official fees running to many hundreds of percent.

Some countries in the Gulf increased national fees when the Gulf Cooperation Council Trademarks Law was enacted, with Saudi Arabia being the most recent to do so. However, there have also been considerable increases across the wider region, including in Syria.

No official reasons have been given for the rises, although there has been a great deal of speculation as to possible motives. One of the more colourful of these is that countries are using fees to generate revenues in order to offset the fall in oil price, although it would need a staggering increase in filings throughout the region to recover some of this shortfall. The fact is that in many countries fees had not changed for more than 10 years.

Unfortunately, the rises have come at a time when rights holders are already facing considerable budgetary pressures. That said, the benefits are already apparent in some countries, where applications are maturing into registrations more quickly.

In its new fees - published when it adopted the Gulf Cooperation Council Trademarks Law in July 2016 - Saudi Arabia announced a reduction of $135 for registration fees, no change for search and assignment fees, but increases of $135 for renewal fees. It also introduced entirely new fees, such as appeal and opposition fees. The fees and the law are expected to come into force in late September 2016, three months after publication.

At the time of writing, Bahrain had announced increases to the fees it will charge for national designations of Madrid filings. These are set out in Table 1.

Minimising fee increases short term

Monitoring

When fee increases were announced for Kuwait, Saudi Arabia and the United Arab Emirates, rights holders were given advance notification, which allowed them to process their pending applications and renewals in order to try to avoid the increased fees or at least to minimise their impact.

However, this type of forward planning was not possible for rights holders in Bahrain, where the new fees came into effect within 24 hours of being announced. Rights holders should therefore continue monitoring the region closely for further fee rises and work with local counsel to try to minimise the impact of these. Where possible, steps should be taken to pay application, publication or renewal fees before any increases come into effect.

If rights holders are considering filings or have renewals in countries where fees have yet to be updated (eg, Oman and Qatar), then consideration should be paid to filing, renewing or recording any registrable transactions now, in order to avoid any possible future fee increases.

Similarly, for the United Arab Emirates, where the Trademarks Law has yet to be implemented, the possibility remains that further fee changes could be introduced. Again, rather than waiting, rights holders which intend to file, record actions or renew should consider proceedings in the near future so as to try to avoid fee increases.

Use of Madrid Protocol

Rights holders should also bear in mind that the Madrid Protocol may offer a cost-effective option. This is because in addition to the usual savings, using the protocol can circumvent the need to obtain legal documentation, which is required for national filings in almost all countries in the MENA region. In this context, Syria recently announced a reduction in its fees under the Madrid Protocol, at a time when fees for national filings are increasing.

The Madrid Protocol states located in the MENA region are Algeria, Bahrain, Egypt, Iran, Morocco, Oman, Syria and Tunisia. Other countries are also believed to be considering signing up - Jordan and Lebanon have long expressed an interest. While membership has historically been ruled out by the United Arab Emirates and Saudi Arabia, both countries have expressed interest in learning more about the Madrid Protocol more recently.

It remains to be seen whether these countries, or others, do in fact accede to the Madrid system. However, it remains an option whereby qualifying rights holders can minimise their protection costs in the region. Where possible, it is recommended that a local registration certificate be obtained once the designation is protected, in order to assist in enforcement.

Online capabilities and long-term fees

There has been a noticeable move towards online trademark applications. Over the last two years or so, the following countries have moved to online filing, which in some cases also includes online publication and renewals: Iran, Lebanon, Morocco, Saudi Arabia, the United Arab Emirates, the West Bank and Yemen. Other countries are looking to introduce online capabilities shortly, notably Bahrain and Kuwait.

The introduction of online systems often involves considerable investment - for example, Saudi officials have developed their own system. However, Table 2 illustrates that the fee increases have already had a positive impact on the efficiency and accessibility of trademark systems, with more developments yet to come.

Over the coming months and years, more national offices are likely to move to online capabilities, while offices which have already adopted such systems look set to expand their online capabilities beyond the relatively limited options currently available. This should help rights holders to obtain registered rights more quickly and so, in turn, help with enforcement in a region where registration is necessary for brand protection.

A longer-term expectation is that once the increased fees have helped to recoup investment costs, they will be reduced, as has been the case for other countries around the world.

Filing Trademark type Current fees New fees after 7 September 2016
Application or subsequent designation Standard trademark Bd274 per class (approximately $277) Bd1,710 per class (approximately $1,731)
Collective/certification mark Bd97 per class (approximately $300) Bd2,105 per class (approximately $2,132)
Renewal Standard trademark Bd137 per class (approximately $139) Bd1,710 per class (approximately $1,731)
Collective/certification mark Bd137 per class (approximately $139) Bd2,105 per class (approximately $2,132)
Country Changes Then Now
Saudi Arabia Approximate increase of $800 in publication fees in 2014 for applications and in 2016 for renewals, with further changes in Autumn 2016; online filing introduced in 2014. Examinations concluded within nine months and published nine months later, with registration granted within 24 months. New applications examined within two weeks, published online immediately and registration granted within nine months.
United Arab Emirates Official fees at least doubled in 2015; online filing introduced later the same year. Examinations concluded within 18 months and registration granted within 24 months; opposition hearings delayed by at least five years. Examinations concluded within five months and registration granted within 10 months; opposition hearings concluded within 12 to 18 months.
Kuwait Trademark Law enacted in early January 2016, resulting in increased fees. Examinations concluded within six to nine months and registration granted within 18 months. Examinations now take place within 90 days and registration most likely granted within 12 months.

Classification - recent changes

At the time of introducing their respective online filing systems, Saudi Arabia and Iran also updated their classification practices. Under the new practices, applicants can no longer use freely crafted specifications, but can choose only specific terms from adapted versions of the Nice Classification, without amendment. The two countries use slightly different adaptations.

Iran has taken its practice slightly further by also permitting terms that are not in the adapted version of the Nice Classification, provided that these are pre-approved by Iranian trademark officials. This preapproval process can take many months, although the list of pre-approved term is growing.

These classification changes have proved challenging for applicants, as they do not cover a number of commonly protected goods and services. For example, in Saudi Arabia, terms such as 'retail services' (or equivalent) or 'covers for mobile phones' cannot be specifically protected.

In some cases, the classification changes are proving problematic when it comes to fulfilling obligations under co-existence agreements and other forms of settlement - for example, where restrictions commonly included in specifications cannot be used (eg, it is not possible to use "but not relating to telecommunication-related services" in a specification). In such cases, discussions between parties may be necessary to agree an appropriate way forward in light of local practice.

Also noteworthy is that trademark officials in Saudi Arabia have announced that class headings offer full class protection. While this may be the practice before the Trademark Office, it does not necessarily follow that enforcement officials and the courts will take the same view.

Steering a course

One way to navigate these changes is to avoid using class headings only, unless the goods or services of interest are explicitly covered. Generally, use of class headings should be avoided, so as not to affect the scope of rights - not just for these two countries, but for all other countries in the MENA region.

Instead, rights holders should look to individual listings - or a combination of class headings and terms from the individual listing - in order to try to obtain protection for their goods or services.

Given that this classification practice has been in force for two years, some cases involving the impact of this strict classification practice, where actual goods or services have been denied coverage due to the limited terms available, might be expected.

To date, there has been no indication of MENA countries other than Iran and Saudi Arabia adopting the same classification practice.

Need for swift response

The MENA region has seen significant changes to trademark law and practice introduced at short notice. Rights holders should therefore keep in touch with local counsel and be prepared to review their strategy and respond accordingly. More developments are expected - in particular, the implementation of the Trademarks Law in the remaining Gulf Cooperation Council member states.

While change can be unsettling, it can also lead to progress. Already, rights are being granted more quickly - a key development in a region in which registration certificates are crucial for effective enforcement.

Watch this space for reports on future developments.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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