Draft trademark law sent to Parliament

Lebanon
The Lebanese Ministry of Economy has sent a draft Law on the Protection of Industrial, Trade and Service Marks to the Lebanese Parliament.
 
The draft law will replace all the principles of the old Lebanese Trademark Law (2385/1924), which will be repealed insofar as it contradicts the new draft. All rights obtained under the 1924 law will be preserved. However, the renewal of all registered trademarks will be subject to the new law.
 
The draft law widens the definition of 'trademarks' to include:
  • sound marks;
  • colour marks;
  • combination of colours;
  • taste marks;
  • smell marks;
  • product shape marks; and
  • three-dimensional features.
Even though the draft law prohibits the registration of non-distinctive marks, it recognizes that marks may acquire distinctiveness through use. The draft law also prohibits the registration of marks that infringe the copyright of third parties, protected geographical indications and/or trade names.
 
The registration system currently in place is a deposit system. At present, trademarks are registered almost immediately, following a basic formalities check and the relevant fees being paid. The draft law proposes to change from a deposit system to a more substantive examination system, which also introduces opposition procedures for the first time. Currently, rights holders wishing to take action against third-party filings in Lebanon must bring cancellation actions before the courts.
 
The draft law proposes to establish an administrative panel within the Trademark Office headed by a judge. The members of the panel will include the head of the trademark section and a trademark expert. The panel will look into appeals against any Trademark Office decisions, such as the rejection of trademarks, and will also look into oppositions filed by third parties. Provision will be made for any decision from this panel to be appealed to the relevant court.
 
The draft law does not specify which court has jurisdiction. However, in a conference in Lebanon at the end of April 2010 on "Effects of Trademark Protection on Economic Development under the Madrid System", the Ministry of Economy representative stated that the administrative courts would have exclusive jurisdiction, as the panel’s decisions will be regarded as enforceable administrative decisions.
 
As the Lebanese Administrative Law states that the administrative courts play the role of the Court of Appeal and Cassation in relation to all decisions issued by all quasi-judicial panels within the administrative body, it may be argued that the administrative courts have exclusive jurisdiction in any event.
 
The positive impact of having the administrative courts look into appeals against the panel’s decisions is that the decisions of these courts are final. This will save time and costs. However, one downside is that the parties will have only one judicial level and, therefore, will lose the chance to appeal if they do not agree with the court’s decision. Another disadvantage is that the administrative judges have more knowledge about administrative laws, and less practical knowledge of commercial laws and practices.  
 
The draft law also plans to introduce the concept of ‘opposing’ a trademark registration if it is registered in bad faith. The draft law uses the word ‘oppose’ and the phrase "against a registered trademark". Therefore, even though the draft law calls it an opposition, it is in effect a cancellation, which, if successful, will lead to the cancellation of the registered mark. This action can be brought before the Trademark Office, which is possibly why the law calls it an opposition - rather than a cancellation, which has to be brought before the courts. Therefore, if the law is passed, it will potentially offer rights holders a quicker and cheaper option to take action against registrations filed in bad faith.
 
Finally, the draft law introduces more deterrent penalties. The penalties are in general:
  • imprisonment from three months to three years; and/or
  • a fine from $3,300 to $33,000.
These options are only for the acts of counterfeiting, placing fake marks on products in bad faith, importing or exporting counterfeit products or using a registered mark, even if the mark is accompanied by phrases such as ‘a type of’, ‘a kind of’, ‘similar to’ or ‘a copy of’.
 
The sale or possession of infringing products bearing marks which are confusingly similar, but not identical, to the registered mark will be subject only to the above fines. There will be no imprisonment.
 
A more unusual penalty in the draft law is a secondary penalty that will be included in all court convictions. This is the suspension of the offender’s capacity to vote, or run, for any membership on the boards of directors of the chambers of commerce, social groups, bar associations, cooperation associations, labour arbitration counsels, Parliament, municipality counsels and mayors, for no more than five years. This is an unusual penalty, but one that could have far-reaching implications for convicted offenders.
 
The new draft law is yet to be approved by Parliament. There is a possibility that Parliament may amend, modify or refuse the draft in its current form. As Lebanon has one of the oldest IP regimes, it is a development that brand owners should monitor with interest.
 
Bassel El Turk, Rouse, Dubai

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