Tim Lince

In another shock for the IP community in the Middle East, two more countries have announced significant trademark fee increases that will have brand owners re-evaluating their registration strategies in the region. One expert tells us that, while the fee rises are considerable, there are more affordable avenues of protection that can be considered.

We reported late last year on the 15-fold increase of fees in Kuwait, described as a “huge shock” for IP professionals in the region. This followed a similar move in neighbouring United Arab Emirates six months earlier. Now, in the last week, two more countries announced immediate hefty fee rises for actions such as trademark registrations, publication, renewals and oppositions.

The steepest rise is in Bahrain - which one law firm in the region, R. M. Abou Naja, described on Twitter as “skyrocketing” – where the registration fee jumps from 60 Bahraini Dinar ($160) to 500 Bahraini Dinar ($1,325), a 728% rise. Other fees are just as severe, with the most significant being a late renewal fee rising 3,153%, from 20 Bahraini Dinar ($53) to 650 Bahraini Dinar ($1,724). The full changes are below:

In Syria, the changes are not as severe but are still notable. For example, the publication of a new or renewed trademark application increases from 20,000 Syrian pound ($91) to 70,000 Syrian pound ($318). Again, the full changes are below:

While the fee rises in Syria may not seem as severe as Bahrain’s, this could change in the future says Jon Parker, a partner at Gowling WLG: “With the current exchange rate to US dollars, the increases do not look as significant as the Bahraini increases. The Syrian pound has significantly devalued in recent times and so international rights holders are benefitting from this volatility as compared to Syrian nationals/companies looking to register. However, due to the volatility of the local currency, should it start strengthening, rights holders should bear in mind the value of the official fees in US dollars may start increasing significantly.”

It appears that a reason for these latest increases have not been given by the IP offices in either country. Overall, however, Parker notes that this is the latest in a growing trend of significant trademark fee rises in the Middle East region – both as countries look to implement new IP laws and improve their services. “It is worth noting that in many of the countries, the official fees had not increased for at least 10 years,” he adds. “With the impending implementation of the GCC Trademarks Act in the Gulf Cooperation Council countries (of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE), as well as a move to online services, efforts to reduce backlogs and the time it takes for trademark applications to progress from filing through to registration, it appears a number of countries are using this opportunity to increase official fees. Although, of course, this reduction in timescales has been a considerable benefit to rights holders looking to take action against suspected counterfeits/infringements”

So while there are procedural improvements going on in the region, this will be of little consolation to law firms if they receive less filing work from international brand owners. As Parker explains: “Generally the cost of protection in this region was already high, and is further compounded by the fact that the countries do not allow multi-class filings. Further rises mean rights holders looking to obtain protection in this region will revisit their protection strategies in order to determine whether they still wish to obtain the same level of protection as they have in the past. In particular, we are likely to see a fall in applications from SMEs as they look to balance budgets.”

In fact, if the IP offices are looking to garner extra revenue, Parker says fee rises may not have been the best strategy to take: “My personal view is that if there was a reduction in the official fees and/or moving to multi-class filings in the region, then we would have likely seen an overall increase in revenue generated by trademark filings. Rights holders may have been more likely to obtain their preferred level of protection, which in turn would lead to additional filings being made and classes covered. Many rights holders often settle for less protection than they would like, due to the cost of registration in the region.”

For now, though, brand owners will have to contend with these significant fee rises. However, all is not lost and one potentially cheaper option exists – both Bahrain and Syria are members of the Madrid Protocol. In fact, in Bahrain, it is possible to pay an additional fee and obtain a national registration certificate for a protected international registration (for situations when that need arises). However, Parker adds that rights holders should ensure they seek local advice because unexpected issues can occur, such as “some IP offices raising public policy objections if an international registration designates Israel as well as Arab countries”.

So it appears there is a way to somewhat avoid the fee hikes (at least in Bahrain and Syria – Kuwait and UAE are not party to Madrid). But for brand owners seeking protection in the Middle East, registration strategies will need to be considered more strategically – especially as the fee rise trend is expected to continue in more countries around the region.

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