Dubai International Financial Centre releases draft IP laws for consultation

The Dubai International Financial Centre (DIFC) has published draft IP laws for public consultation. Comments must be submitted by February 20 2009.

The DIFC is an economic free zone located within the Emirate of Dubai. It has an independent judicial system which follows rules based on the UK Civil Procedure Rules. As such, issues have arisen regarding the enforcement of IP rights within the DIFC. With the aim of removing any ambiguity, the DIFC has thus issued draft IP laws.

Although the draft laws are largely based on existing federal laws of the United Arab Emirates (UAE), there are some differences which may have an impact on IP rights within the DIFC as compared to the UAE at large. The draft laws recognize registered UAE IP rights, such as trademarks and patents. Therefore, there will be no separate DIFC register, nor any need for rights holders to re-register for protection within the DIFC.

The draft laws issued for consultation are:

the Intellectual Property Rights Authority Law;
the Trademark Law;
the Copyright Law;
the Patents, Utility Certificates, Industrial Drawings and Designs Law;
the Electronic Transactions Law; and
the Trade Secrets Law

Through the laws, the DIFC is looking to establish a tribunal - the Intellectual Property Rights Authority - that will have jurisdiction over IP-related disputes or complaints within the DIFC. The authority will be able to collaborate with UAE authorities with regard to the protection of IP rights for DIFC persons.

The draft laws provide the authority with the right to carry out inspections, confiscate offending items, suspend DIFC licences and issue fines, but not to award damages to aggrieved parties. It will be for that party to bring court proceedings.

Under the draft laws, offenders may face fines of no less than Dh20,000 and no more than Dh20,000. These figures are significantly higher than the corresponding measures in the UAE laws. The increased fines are to be commended, but may lead to forum shopping.

The laws create the following potential jurisdictional issues:

Do the laws apply only to companies based within the DIFC?
If the rights holder is based outside the DIFC, will it be able to bring action on the basis that an infringement has occurred within the DIFC?
If an infringement occurs both inside the DIFC and in the wider UAE, do separate proceedings have to be launched in each jurisdiction?

This is an important and welcome development which will affect all individuals, companies and organizations operating within the DIFC or with DIFC-based entities.

However, a number of areas require further consideration by the lawmakers within the DIFC. Moreover, there are some inconsistencies between the draft IP laws and the UAE federal laws. It will be interesting to see whether these inconsistencies remain after the consultation and, if so, how they will be dealt with in practice.

Jon Parker, Rouse & Co International, Dubai

Dubai International Financial Centre releases draft IP laws for consultation

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