Landmark decision on criminal charges issued

United Arab Emirates
In an important decision for IP infringement actions, the Court of First Instance has addressed the issue of criminal charges in cases of trademark rights violations (Case 512/2008, March 3 2009). The case was initiated by the public prosecutor after it received an official complaint from Gallaher Limited, a subsidiary that is fully owned by Japan Tobacco International.

Gallaher owned a valid registration for the trademark SOVEREIGN for goods in Class 36 of the Nice Classification in the United Arab Emirates (UAE) and other jurisdictions for tobacco, cigarettes and related goods. A suspect container was filled with approximately 50 cases of cigarettes bearing the trademark SOVEREIGN SUPREME CLASSIC.

Gallaher alleged trademark infringement, and sought monetary damages and an order for the destruction of the counterfeit goods. A civil action was attached to the criminal charges. Based on the complaint submitted in May 2008, the public prosecutor of Fujairah decided to inspect the container at issue in an attempt to verify the suspected goods. After carrying out the technical inspections and laboratory examinations, the criminal laboratory concluded the existence of counterfeiting and alleged the same in its official report. It identified the use of raw materials that were different from those used to manufacture the genuine goods and hence concluded that the goods were counterfeit.

The public prosecutor conducted an investigation and notified the consignee of the container to attend the interrogation session. Criminal charges of trademark infringement were pressed and the complaint was transferred to the Court of First Instance for further proceedings. Gallaher joined the case and decided to pursue its civil rights by seeking compensation and confirmation of the order to destroy the counterfeit goods. The trial sessions progressed expeditiously and the court reviewed the case between November 2008 and February 2009. The court finally issued summary judgment on March 3 2009.

Based on the expert's report, the court issued its decision in accordance with Articles 2, 65 and 423 of the Penal Code and Articles 2 and 37 of the Trademarks Law. The decision served to:
  • criminalize the owner of the consignee company mentioned in the bill of lading;
  • impose a fine of Dh5,000;
  • confiscate and destroy the seized goods; and
  • oblige the defendant to pay Gallaher Dh21,000 in preliminary damages pursuant to the latter's statement of claims.
Based on the facts, the decision was expediently upheld and the competent court wasted no time in issuing the judgment. The defendant appealed the decision within the specified timeframe, contesting that the judgment neglected his liability as a consignee. On April 13 2009 the Court of Appeal affirmed the criminal charge and the fine amount as determined by the lower court; however, it returned the civil segment of litigation to the lower civil court for further proceedings.

This is a landmark decision because it demonstrates that trademark rights can be properly enforced in all of the UAE territories without major obstacles. It is also hoped that other UAE jurisdictions will follow a similarly short timeframe when ruling in trademark and IP-related proceedings. This will help to secure IP holders' rights and increase public awareness of serious precedents against infringers.

Munir Suboh, Al Tamimi & Company, Dubai

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