Introduction

Kuwait witness a burgeoning level of Trademark Registration over the last 10 years. Kuwait population is brand conscious and trend lovers. Ninety percent of the consumer products are being imported, which makes it a significant market for industrialized nations and Multinational Companies. It is natural for trademark owners to be vigilant about effective Intellectual Property Rights enforcement in Kuwait.

The unprecedented increase in trading activities has also contributed to the proliferation of counterfeit products as well as infringing trademarks. Such illegal practices incur huge losses to genuine trademark owners and the end-users. Certain unfair trade practices together with lack of an efficient monitoring system have been the concern of business community. There are some areas where Government should intervene so as to make the trademark enforcement system more business friendly.

The Patent and Trademark Office (TMO) under the Ministry of Commerce and Industry does a commendable job in assisting the trademark right holders. Recent activities like an ongoing computerization of the records are a clear manifestation of the department's commitment to streamline registration process. However certain governmental policies and practices require urgent review to project a pro-business image. The most prominent issues are discussed in this Article.

Trade Name Register

TMO does not provide for separate Trade Name Registration. The commercial titles are registered in the Commercial Registration Department of Ministry of Commerce and Industry (as part of the process of Company registration). However there is no verification as to whether the name sought by potential entities genuinely belongs to another business entity. As a result a prospective registrant can use a well known brand name as part of its commercial title provided that the name hasn't entered in the commercial register department records.

In the absence of distinct trade name registration procedures, it is not legally permissible to challenge infringement of trade name (unless such trade name is registered as 'trademark'). Consequently a number of well known brands face risk of loosing their rights over trade names.

Unauthorized trademark registration

There have been cases where local agents or distributors have managed to register their principal's trademark in their own name. Since Kuwait follows a 'first-come-first-register' policy, some unscrupulous agents could prevent the genuine trademark owners to enter Kuwaiti market. The system lacks measures to check the authority or rights of agents or distributors to register their principal's trademarks.

International Registration

Kuwait is yet to sign Madrid Agreement/Protocol for the International Registration of Trademarks. Consequently the local trademark holders are compelled to register the mark in each country through an expensive and time-consuming process.

Franchise / license law

There are no specific statutory provisions regulating franchise or trademark license in Kuwait. This has led to a situation where many franchise or trademark license agreements have been interpreted by the court as agency or exclusive distributor agreement which created needless financial obligations upon trademark licensor or franchisor.

Trademark License Register

Kuwait law does not require registration of neither trademark license nor franchise relationship. Accordingly it is impossible to know the details on the licensed or franchised trademarks in Kuwait.

Lack of trademark license registration has also prompted local licensees or franchisees to approach the Agency Registration Department to get the agreement registered since many Governmental Departments require some sort of registration of the agreement.

Unauthorized signage

Approval for signage has been a contentious issue among business community in Kuwait. Complaints are afloat that the Municipality gives signage approval in a reckless manner which often adversely affects the interests of trademark owner. There are many instances where local traders have been permitted to display trademarks for which the original trademark holder has not given written approval. This has misled the public as to the identity of the genuine sellers or agents. In many cases parallel importers also obtain approval to put up signage which adversely affects the business interests of the genuine trademark owner.

Well Known Marks Register

Most of the well known brands have a stake in the Kuwait's lucrative market. These brands have been taking painstaking efforts to protect their brand image in Kuwait. However the law does not specifically provide for well known marks protection. The profit element lures many local players to imitate well known brands by establishing or marketing products or services with imitating or confusing trademarks. Imitations are rampant in sectors like leather products, perfumes, watches, electronic goods, toys and fashion clothing. Similarly imitations are seen in restaurant and automobile parts sector.

An equally alarming trend is to imitate well known brands to market products or establish services in unrelated areas. For example, shoes manufactured elsewhere are sold under a well known automobile brand or pens sold under a prominent jewelry brand.

Insufficient protection for unregistered marks aggravates the legal vulnerability of well know trademarks which have been in use but not locally registered

Prior Use vis-à-vis prior registration

The 'first-come-first-register' rule has facilitated the registration of look-alike marks. (without proving use or intention to use). Eventually international firms are compelled to approach the court to get such registrations cancelled. But the law considers prior registration as more important than prior use and it needs much more effort to cancel such unreasonable registrations.

Unfortunately the above legal position has led to situations where trademark owners who failed to register the marks in Kuwait could not obtain favorable orders against unauthorized registrations (despite long time use in Kuwait).

Trademark Marking System

Current rules do not require trademark owners or applicants or other legal entities to use ® or " for proper trademark notice. Consequently these symbols are displayed in an indiscriminate manner and do not properly indicate the purpose for which it is used.

Border Measures

Kuwait Customs has a dedicated IPR Department which is actively involved in preventing IPR violations. Shipments carrying counterfeit products are increasingly seized by Kuwait Customs. The legal machinery has certain drawbacks which do not allow the Customs to effectively monitor the IPR violations. The Customs is not empowered to destroy the seized goods unless there is a court order and the goods are eventually return to the Port of Origin from where they are re-routed to other destinations.

Suggestions

The following measures are suggested to streamline the trademark enforcement machinery.

  • A Trade Name Register needs to be maintained under the Trademark Office to enter the registered trade names.
  • Applicants for Commercial Registration of a Company Department may be required to produce a Clearance Certificate from Trademark Office to the effect that the proposed Trade Name has not been registered by any other party.
  • It is suggested to incorporate legal provisions to entitle trademark owners to challenge registration of similar commercial title.
  • Local companies may be required to submit affidavit undertaking their bonafide intention in registering a trademark and that the proposed mark is not owned by any other company to the best of their knowledge and information.
  • The Trademark Office may not register trademarks in the name of local agents or distributor unless such agent or distributor produces written approval from principal.
  • It is suggested to enact specific law governing franchise relationships.
  • It is suggested to amend Commercial Law to incorporate provisions relating to recordal of trademark licenses agreements.
  • Agency /Distributorship provisions under Commercial law may be amended to exclude trademark license or franchise relationship from its purview
  • Approval for advertising / signboard etc may not be granted unless accompanied by authorization or approval from the trademark owner or holder.
  • It is suggested to enact special law regulating well known trademarks.
  • An effective protection system may be introduced for unregistered trademark which claims long term use.
  • Specific Regulations governing Trademark Marking System may be introduced.
  • Measures to enhance effective border measures may be introduced.
  • It is suggested to establish a system for the Recordal of Trademarks at the Customs Department

Conclusion

Kuwait Trademark System needs a complete revamp. The flaws as above mentioned seriously jeopardize the image of Kuwait as a Business Friendly Nation. A strong economy requires effective IPR protection system. Government and concerned Department should seriously consider rectifying current flaws in trademark enforcement system.

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.