This part will explore trademark issues that may arise regarding the franchise agreement.
Nevertheless, let's take a look at a non-exhaustive list of franchises that has entered the Cypriot business world from all over the world, so as to illustrate the growing expansion of franchises in the local market.
Franchises of international origin
Subway (USA), McDonald's (USA), Starbucks (USA), KFC (USA), Burger King (USA), Coffee Beanery (USA), Accessorize (UK), Costa Coffee (UK), Debenhams (UK), Marks & Spencer (UK), Gloria Jeans (AUSTRALIA), Mikel (GREECE), Gregory's (GREECE), Coffee Island (GREECE), CrepaLand (GREECE), Paradosiako (GREECE), Derlicious (GREECE), Estrella (GREECE), Ocean Basket (SOUTH AFRICA)
Franchises of Cypriot Origin
MAS Supermarkets, CoffeeHouse - TasteHabitat, Red Sheep Coffee
A franchisee may be registered in Cyprus as the user of a registered trademark. Where this is done, the trade mark is treated as still used only by the proprietor. Licensing of unregistered marks would appear to be permissible as if the marks were registered, either by the signing of a separate licence agreement or through the incorporation of a licence clause in the franchise agreement.
It is advisable that the licensed user of a trademark (whether registered or unregistered) register his rights with the Registrar of Companies and Official Receiver Department of Intellectual Property (‘the Registrar'). On the franchisor's part, this will be made in order to avoid any possible issues that may arise in relation to the rights of the franchisee as regards any licensed trademarks and their registration into the franchisee's name, not as a user but rather as a proprietor.
Provided that no registration of a licensed user is intended to be made, a clause preventing the franchisee from registering the franchisor's trademarks of its own motion into the franchisee's name should be incorporated in the agreement. In order to illustrate the appropriate caution with which such matters should be approached, we take as an example the Mitsios Trading Limited ν. Swipe Limited (1999) 1 ΑΑΔ 648 case. In this case, the registration of the licence was not proceeded with by the franchisor in Cyprus in order to record the licensed users. The Court held that the commercial agent's registration of the franchisor's trademark into his own name was legal, due to the Registrar granting such registration. Thus, this case illustrates the caution with which such matters should be approached.
The Trademarks Law Cap. 268 as amended, states that the licence agreement should be made in writing and should be filed with the Registrar (Article 19(6)a). A licensed user may be registered through an application made in writing to the Registrar by the proposed registered user using Form No. 10. The application must be accompanied by a declaration by the proprietor that provides particulars of the existing or proposed relationship between the proprietor and the proposed registered user, the goods or services for which registration is proposed, the conditions or restrictions imposed on the use of the trademark, and the duration of its use. The registration of a registered user of the trademark does not confer any assignable or transmissible right to its use.
Further Intellectual Property Rights that may be relevant in a franchise agreement include:
- The Patent Rights Law of 1998, as amended.
- The Legal Protection of Individual Designs and Models Law 4 (1) 2002, as amended.
- The Copyright and Neighbouring Rights Law of 1976, CAP 59, as amended.
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.