DIFC IP Law Update 2025

Dubai Creek

Author Aravind Parameswaran Licence  CC BY-SA 4.0 Source Wikimedia Commons

 

Jane Lambert

As a result of such initiatives as the Innovation Hub and the Metaverse Platform, new products and services are being developed in the Dubai International Financial Centre ("DIFC") in such technologies as fin-tech, virtual reality and artificial intelligence. They will require legal protection in the DIFC and beyond.  That is not as straightforward in the DIFC as it is in the rest of Dubai because the DIFC has its own legal system. It is for that reason that the Ruler of Dubai proclaimed the DIFC Intellectual Property Law (DIFC Law No. 4 of 2019) on 14 Nov 2019.

That law does not establish any IP rights for the DIFC as such.  It implements the existing intellectual property laws of the United Arab Emirates ("UAE") in the DIFC and provides for their enforcement.  These are:

• the Federal Decree-Law No. 38 of 2021 on Copyrights and Neighbouring Rights; 
• the Federal Law No. 11 of 2021 on the Regulation and Protection of Industrial Property Rights; 
• the Federal Law No. 17 of 2009 on the Protection of New Plant Varieties; and 
• the Federal Law No. 36 of 2021 on Trademarks.

The relationship between those federal enactments and DIFC Intellectual Property Law is explained in my article Introduction to, and Overview of, the New DIFC Intellectual Property Law which I wrote on 11 Dec 2019.

In that article, I observed that:

"The most interesting provisions of the new Law relate to the Commissioner of Intellectual Property, Art 5 provides that the Law and any legislation made for the purpose of that Law shall be administered by the Commissioner."

The first Commissioner was Dr Tarek Hajjiri and he gave a very interesting interview to Mariam Sabet on YouTube at the INTA virtual conference in 2021.  Dr Hajjiri held that appointment until 2023 and his successor is Katherine Nixon.

I noted that the Commissioner has very extensive powers under art 59 (3) of the DIFC Intellectual Property Law in my article.  Art 59 (3) (a) requires him or her to receive and decide on all complaints or disputes filed in connection with the law in the DIFC, and to impose fines for non-compliance with the Law and any related regulations.  Drafting those regulations and submitting them to the DIFC Directors was another of the Commissioner's responsibilities,  The DIFC Intellectual Property Regulations came into force on 5 July 2021. 

As I stated in The New DIFC Intellectual Property Law - Patents and Utility Certificates on 9 Jan 2020, anyone seeking a patent for the DIFC may apply to the Gulf Cooperation Council Patent Office for a GCC patent or to the federal Ministry of Economy for a UAE patent.  I wrote about GCC patents in Patents: Gulf Co-operation Council on 21 Jan 2011.  The Ministry of Economy is also the appropriate authority for the registration of utility certificates, trade marks, industrial designs and the layout of integrated circuits that apply to the DIFC.  The UAE is party to the Patent Cooperation Treaty ("PCT") and the Madrid Protocol.

IP rights that do not have to be registered with the UAE Ministry of Economy include copyrights, rights in performances and other neighbouring rights and the right to prevent unauthorized use or disclosure of trade secrets.  I discussed those rights in The New DIFC Intellectual Property Law - Copyright and Neighbouring Rights on 28 June 2020 and DIFC Trade Secrecy Law on 7 July 2021.  Two IP rights that predate the new Law are the rights to enforce an obligation of confidence under art 37 of the Law of Obligations DIFC Law No. 5 of 2005 and the right to bring an action for passing off under art 38.. I wrote about the duty of confidence in DIFC Law of Confidence on 27 Jan 2021 and The DIFC Law of Passing off on 7 April 2011.

A rights owner who believes that his or her right has been infringed has the choice of complaining to the Commissioner under art 59 (3) (a) of the DIFC Intellectual Property Law and art 2 or bringing an infringement action in the Court of First Instance.   By far the cheaper and less formal procedure is to complain to the Commissioner.  Complainants complete a simple form and pay an initial fee of US$500. By contrast, the fees for issuing a claim form range from US$1,500 to US$130,000 depending on the value of the claim.  The Commissioner has jurisdiction to hear claims under the Law but not for breach of confidence or passing off.  The Court, on the other hand, can grant interim injunctions including search orders and freezing injunctions.  It can also conduct inquiries as to damages and accounts of profits. Most complainants, particularly startups and small and medium enterprises, will complain to the Commissioner and the DIFC has prepared a helpful guide to assist them,  Those with urgent high-value claims are likely to prefer the courts.

Although there is no intellectual property division in the Court of First Instance the Technology and Construction Division will hear claims relating to the design, supply and/or installation of computers, computer software and related network and information technology systems and services under Rule 56 (3) (5) of the DIFC Court Rules. Similarly, the Digital Economy Court will hear claims involving:

"(1) fintech;
(2) digital assets, including the digital environment, platform or system in which a digital asset exists or may exist;
(3) distributed ledger technology and blockchains including applications based on blockchain technology;
(4) substantial or complex databases;
(5) artificial intelligence and any devices or components of devices whether integrated or not that are dependent on or controlled by artificial intelligence;
(6) data stored digitally including on cloud or other remote platforms, including distributed ledger technology;
(7) e-commerce, online intermediaries, digital payment platforms or marketplaces which include virtual asset service providers in relation to: exchange between virtual currencies; exchange between virtual and fiat currencies; the safe-keeping or administration of virtual assets; or, enabling participation in financial services connected to the offer or sale of virtual assets;
(8) interactions and transactions within virtual reality and the Web3 economy, including digital peer-to-peer transactions;
(9) the application of automatic dispute resolution processes;
(10) decentralised autonomous organisations (DAOs), decentralised finance vehicles (DeFi) and decentralised applications (DApps);
(11) the validity of digital signatures and digital identification and verification systems;
(12) the design, supply and /or installation of computers, computer software and related network and information technology systems and services;
(13) cyber-physical systems such as unmanned aerial vehicles, 3D printing technologies, and robotics;
(14) intellectual property claims arising out of or in relation to any of the above claims;
(15) insurance claims arising out of or in relation to any of the above claims;
(16) claims under the DIFC Data Protection Law (Law 5 of 2020); and
(17) any combination of the above claims."

under Rule 58 (7).

As all the IP rights enjoyed in the DIFC except the obligation of confidence and the law of passing off are established under federal law it is conceivable that conflicts will arise between rights existing in one system and those existing in the other.   The Ruler of Dubai jas recently established a Conflicts of Jurisdiction Tribunal to resolve such disputes.

Anyone wishing to discuss this article may call me on +44 (0)20 7404 5252 during UK office hours or send me a message through my contact form.

The New DIFC Intellectual Property Law - Patents and Utility Certificates

Jane Lambert

On 21 Nov 2019, a new Intellectual Property Law came into force in the Dubai International Financial Centre ("DIFC") which I discussed in my Introduction to, and Overview of, the New DIFC Intellectual Property Law on 11 Dec 2019.   The rights protected by the new law include patents and utility certificates.  A "utility certificate" is defined in the table to paragraph 3 of Schedule 1 of the new law as  "a right pursuant to the issuance of the deed of protection granted for an invention by Ministry where such inventions do not involve an inventive step sufficient for the grant of deed of patent."  Art 3 (3) of the DIFC IP law makes clear that it does not establish any registry for IP rights but any IP rights that are registered in the UAE under applicable federal IP Laws shall be recognized as valid and enforceable under this legislation in the DIFC.

Federal IP Laws

The DIFC is established in the Emirate of Dubai. Dubai is part of a federation of emirates known as the United Arab Emirates ("UAE").  The UAE is a member of the Gulf Cooperation Council ("GCC") which has established a GCC Patent Office.   Patents for the UAE may be granted by the Federal Ministry of Economy under Federal Law No. (31) For The Year 2006 pertaining to the Industrial Regulation and Protection of Patents, Industrial Drawings, and Designs ("Law 31 of 2006") or the GCC Patent Office under the Patent Regulation of the Cooperation Council for the Arab States of the Gulf ("GCC Patent Regulation").  As there is as yet no such thing as a GCC utility model, utility certificates for the UAE are available only from the Ministry of Economy under Law 31 of 2006.

Entitlement

Unless the invention is made by an employee, the rights to an invention shall belong to the inventor or his or her successor pursuant to art 13 (1) of the DIFC IP law.

If an invention is made within the scope of employment by an employee pursuant to an employment contract the employer will be the owner of the invention by virtue of s.12 (1) of the law unless agreed otherwise between the employer and employee in writing. An invention is deemed to have been made within the scope of employment if:
(a) the invention was made in the course of the normal duties of the employee, or in the course of duties falling outside the employee’s normal duties, but specifically assigned to the employee, and the circumstances, in either case, were such that an invention might reasonably be expected to result from the carrying out such duties (art 12 (2) (a)); or
(b) the invention was made in the course of the duties of the employee and, at the time of making the Invention, because of the nature of his duties and the particular responsibilities arising from the nature of his duties he had an obligation to further the interests of the employer (ar 12 (2) (b)).

Art 12 (3) further provides that unless otherwise agreed upon between the relevant parties in writing, if an invention falls outside an employee’s scope of employment but relates to an employer’s business or professional domain and has been conceived by the employee using primarily the employer’s resources such as know-how, documents, tools, premises and other facilities of the employer, the invention shall belong to the employer,. 

Employees' Duty to Notify

An employee must notify an employer of an invention as soon as practicable by way of a written report including all the technical details of the invention (art 12 (4)). 

Employees' Compensation

An employee to whom art 12 (3) applies shall be entitled to fair compensation in which his or her remuneration, the economic value of the invention and the benefits that the employer shall gain through the Invention shall be taken into consideration.

If the employer is not interested in using the invention that it is so notified of, it may in its sole discretion, assign all right, title and interest in the invention to the employee instead of paying the employee compensation for the invention if required under art 12 (3),.

 If an employer does not make an election of its interest in an invention that it was notified of pursuant to art 12 (4) through a written notice to the employee before the end of the employee’s employment contract, the employer is deemed to have made an election to keep the invention and either party may apply to the Court to determine the compensation due to the employee for the Invention unless otherwise agreed between the parties.

Monopoly

Art 8 provides that a patent or utility certificate shall confer on its owner the following exclusive right to exclude others from exploiting the Invention in the DIFC. Where the invention is a product, such exploitation shall include using, manufacturing, offering for sale, selling or importing the product.  Where the invention is a process or method, the owner shall enjoy the exclusive right to use the product or method including the exclusive right to market and distribute any product derived directly from such process or method.   Such owners will be assisted by art 11 (1) which provides that where the subject-matter of a patent is a process for manufacturing a product and the owner of the patent can show that a substantial likelihood exists that a product is manufactured by an infringer by such process but is unable through reasonable efforts to determine if such process was actually used in the manufacturing of the product, the burden of proving that the product is not manufactured by the process that is the subject of the patent shall move to the alleged infringer of the patent or utility certificate in any infringement proceedings in the DIFC

Infringement

Art 9 provides that those exclusive rights are infringed by the following acts if done in respect of at least one of the claims of a patent or utility certificate without the authority of the owner:

"(a) exploiting in or from the DIFC, for industrial or commercial purposes, an Invention protected by a patent or utility Certificate;
(b) using, manufacturing, selling, offering for sale in or from the DIFC, or importing into the DIFC, or possessing in the DIFC, with the intention to trade, products or processes protected by a patent or utility certificate, or products obtained using processes protected by a patent or utility certificate;
(c) inducing another person to infringe a patent or utility certificate in or from the DIFC, even if the inducer is located outside the DIFC; or
(d) cooperating with another party to an act of infringement of a patent or utility certificate in or from the DIFC, even if the other party is located outside the DIFC."

Art 9 (3) introduces a doctrine of equivalents into DIFC law:

"A claim granted under a Patent or Utility Certificate is considered to be infringed even though the alleged infringing product, process or method does not fall within the literal scope of the patent claim but nonetheless equivalent to the claimed invention. The construction of the claim is made in light of the entire specifications and drawings of the Patent or Utility Certificate involved."

Defences

Art 8 (2) provides that the rights referred to in art 8 (1) shall be restricted to acts that are undertaken for industrial or commercial purposes.  They shall not include acts relating to a product protected by a patent or utility certificate after its sale.  The last provision seems to introduce something akin to the US first sale doctrine into DIFC patent law.  The precise limit of this exception is likely to be the subject of litigation.

Art 10 (1) provides:

"A person has the right to exploit an Invention, product, process or method, which otherwise would constitute an infringement in the DIFC under Article 9, if in good faith, the person initiated an act of exploitation, or has made effective and serious preparations to initiate an act of exploitation before to the priority date of a Patent or Utility Certificate within the UAE."

However, that defence is limited because art 10 (2) adds:

"A person’s right to continue with an act of exploitation in the DIFC under Article 10(1) shall remain until:

(a) any products produced or acquired by that person inside the UAE prior to the grant of the relevant Patent or Utility Certificate, are sold, or otherwise exhausted; or
(b) until any machine used prior to the grant of the relevant Patent or Utility Certificate to execute any such patented process is expired,

provided that such right is a personal right and cannot be assigned or transferred to another person."

Anyone accused of infringing a patent or utility certificate can contend that the instrument is invalid but the person alleging invalidity is required by art 10 (4) to bear the burden of proof in respect of such invalidity. The court shall have the discretion to suspend the infringement proceedings until an order in respect of the validity of the patent or utility model is pronounced by the competent court.

Further Information

Anyone wishing to discuss this article or the DIFC intellectual property law generally may call me during normal British office hours on +44 (0)20 7404 5252 or send me a message through my contact page.

How will the Blockade of Qatar affect IP Law in the GCC Countries?

Jane Lambert

Severing diplomatic relations, expelling a state's nationals, closing a land border and airspace are steps that fall only a little way short of war. It is remarkable that those steps have been taken by two of the parties to the Gulf Cooperation Council ("the GCC") against a third since the GCC had achieved a high degree of political and economic integration.

One aspect of that integration is the GCC patent which is actually a unitary patent for the member states of the GCC - something that the member states of the European Union have yet to achieve. GCC patents are issued by the GCC Patent Office which I discussed in Patents: Gulf Cooperation Council on 21 Jan 2011. A subtitled video on YouTube explains how the Office works.  According to its website, the GCC Patent Office has granted 5,721 patents as of today. That may not be a huge number when compared to the output of the Chinese, Japanese, US, Korean or European intellectual property offices, but the GCC Patent Office's business would have been expected to grow as all the GCC countries were developing industries and technologies for when the oil runs out.  As the Office is located in Saudi Arabia, it is hard to see how Qatar can continue to participate in it unless the order expelling Qatari nationals from Saudi Arabia is rescinded.

Other types of IP law will be less affected. Trade mark law had been harmonized in the GCC states by a GCC Trade Marks Law but there was no such thing as a GCC trade mark (see Saba Al Sultani and another GCC Trademark Law Coming Soon Sept 2014 WIPO Magazine).  Similarly, there was no GCC system of design registration and no single GCC copyright.

It is to be hoped that the differences between the Qatari government and the governments of its neighbours can be resolved and that the blockade can be lifted soon, but, even if it is, the actions taken by Saudi Arabia, Bahrain and the United Arab Emirates may well have done lasting damage to the GCC. It will not be lost even upon the states that participated in the blockade that the GCC is not a union of states of equal size. Saudi Arabia has a population of 33 million compared to Bahrain's 1.4 million, Kuwait's 4.3 million, Oman's 4.6 million, Qatar's 2.4 million and even the UAE's 5.8 million. The pressure that has been exerted upon Qatar on this occasion could easily be brought to bear on any of the other states in a future dispute.

Consequently, any business exporting to, importing from, investing, or seeking investment in any of the GCC states would be wise to plan for a future that may not include the GCC in its current form. The IP issues that would arise in such a future would be very similar to those that have sprung up in the UK as a result of Brexit. Exporters to, and investors in, any of the GCC states should ensure that their brands, technology and other intellectual assets are protected by national as well as GCC law. Their contracts should take account of the possibility of further blockades and insert effective force majeure provisions. Wherever possible contracts should be construed and enforced in accordance with English law. Where that is not possible, the laws of the Abu Dhabi Global Market, Dubai International Financial Centre or the Qatar Financial Centre which are modelled on English law and enforced by English speaking, common law courts should be considered.

Should any reader wish to discuss this article or IP law in the Gulf in general he or she should call me during British office hours on +44 (0)20 7404 5252 or send me a message through my contact form.

Saudi Arabia accedes to the Patent Law Treaty and PCT

On 3 May 2013 Saudi Arabia acceded to the Patent Law Treaty and the Patent Co-operation Treaty with effect from 3 August 2013.  The Patent Law Treaty harmonizes the procedures and formalities for patent applications.  The Patent Co-operation Treaty enables applications for patents for several countries or groups of countries to be made simultaneously.

The only other intellectual property conventions to which Saudi Arabia had previously been party (other than the WIPO Convention and TRIPS) were Paris and Berne.  The Saudi government had notified its accession to those treaties on 11 Dec 2003 and they came into effect on 11 March 204.

For a short overview of Saudi intellectual property law see my article of 22 May 2011.  If you require specific information on intellectual property or technology law anywhere in the Middle East North Africa region or representation members of my chambers will be glad to advise you where we can or refer you to our connections in the region where appropriate.   Call us on +44 (0)20 7404 5252 or complete our contact form.