The Dubai International Financial Centre Authority has enacted a new IP law aimed at fostering innovation and improving the protection and enforcement of IP rights.

On 21 November 2019, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, enacted a new Intellectual Property Law (Law No. 4 of 2019, the DIFC IP Law). The DIFC is an economic zone within the Emirate of Dubai, which has its own independent legal system based on English common law.

The key aspects of the new DIFC IP law, which has been drafted to align closely with international treaties, such as the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), are highlighted below.

1. Wide-ranging intellectual property law

The DIFC IP Law supplements existing federal IP laws already in force in the UAE and aims to unify the enforcement of IP rights in the DIFC. The law covers all aspects of IP enforcement and introduces enforcement channels for all IP circuits. The overall goal of the law is to increase the protection for IP rights owners in the DIFC, and the UAE more generally, and to create a safe environment for creativity and innovation within the free zone. The law further clarifies the specific routes of enforcement accorded to the various IP rights and sets out how these differ creating increased legal certainty and predictability.

2. Recognition of UAE IP rights

Notably the new law does not create any new IP Offices but instead provides for the recognition of UAE registered IP rights in the DIFC, including recognition of UAE registered patents, utility certificates, industrial designs and drawings, copyrights, trademarks, trade names and trade secrets.

3. Employee creations and inventions

Reflecting its aim to foster innovation, the new law helpfully clarifies the legal position concerning the ownership of copyright and inventions created by employees.

The DIFC IP Law presumes employer ownership of copyright in respect of works created by an employee within the scope of their employment or while using the employer’s knowhow and resources. This is in contrast to the position under the UAE Federal Copyright Law where the employer’s ownership of copyright is not presumed and ability to assign ownership in future works is also restricted.

Similarly, the DIFC IP Law also provides for employer ownership of patents subject to the invention being created within the scope of an employee’s employment.

In the event that an invention is created outside the scope of employment but relates to the employer’s business and is created using the employer’s knowhow and resources, the invention will still belong to the employer. However, in this case, employers should be aware that the employee may be entitled to "fair compensation" for the invention, taking into account the employee’s remuneration, the invention's economic value and the benefits to be gained by the employer from the invention.

4. Appointment of Commissioner of Intellectual Property

The new law creates the new post of Commissioner of Intellectual Property (IP Commissioner) who will be responsible for enforcing the law as well as dispute resolution, and imposing fines for the infringement of IP rights.

The IP Commissioner will be appointed for an extendable period of three (3) years.

5. Jurisdiction of the IP Commissioner and the DIFC Courts in infringement cases

The IP Commissioner has jurisdiction over implementation and execution of the DIFC IP Law and any legislation issued with respect to administrative penalties. The IP Commissioner's decisions can be appealed to the DIFC Courts.

The DIFC Courts also have jurisdiction to issue injunction orders and can award damages resulting from an infringement of the DIFC IP Law.

6. Increased penalties for IP infringement

The new law imposes substantial fines of between USD 5,000 and USD 40,000 (approx. AED 20,000 and AED 150,000) for IP rights infringement.

By way of example, anyone who attempts to use a well-known trademark without the registered owner's consent faces a fine of USD 15,000 (approx. AED 55,000). Manufacturing, selling, importing or exporting products or processes protected by a patent or utility certificate or products obtained using protected processes, will result in a fine of USD 35,000 (approx. AED 130,000).

7. Reversal of burden of proof in patent infringement cases

Where the patent is a process for manufacturing a product, provided that the registered owner of the patent can show a substantial likelihood that a product has been manufactured by the alleged infringing party through such process, the burden of proof in infringement cases has been reversed to fall on the infringing party who must prove that the product was not manufactured using the patented process.

Next steps

We recommend that current contractual intellectual property provisions are reviewed and updated in line with the DIFC IP Law.

Employers are also advised to ensure that employment contracts describe the intellectual property expected to be created during the course of employment and make clear who will own those assets.

Please feel free to contact our UAE IP team below or your usual Baker McKenzie contact.

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