1 Oct
2019

Procedures and strategies for pharmaceutical brands: Saudi Arabia

Kadasa Intellectual Property

Selection, clearance and registration

The trademark system in Saudi Arabia is governed by the following laws and regulations:

  • the Trademarks Law of the Gulf Cooperation Council States, which entered into effect in Saudi Arabia on 27 September 2016 by virtue of Royal Decree M/51;
  • the Implementing Regulations of Trademarks Law of the Gulf Cooperation Council States adopted by the Commercial Cooperation Committee of the Gulf Cooperation Council States in June 2016;
  • the Anti-commercial Fraud Law promulgated by Royal Decree M/19, 29 April 2008;
  • the Implementing Regulations of Anti-commercial Fraud Law issued by Ministerial Resolution 155, 23 December 2009; and
  • the Border Measures Regulations issued pursuant to Ministerial Resolution 1277, 3 July 2004.

Protectable trademarks

The Saudi Trademark Law provides a non-exhaustive list of registrable trademarks. Anything with distinctive character can be a trademark, including names, words, signatures, letters, symbols, numbers, titles, stamps, drawings, pictures, inscriptions, packaging, figurative elements, shapes, colours, groups of colours, or combinations thereof, or any sign or group of signs used or intended to be used to distinguish the goods or services of one undertaking from the goods or services of another, or intended to identify a service or as a certification mark in respect of goods or services.

Under the Trademark Law, smells and sounds are recognised as trademarks. There is currently no clear standard approach towards three-dimensional (3D) trademarks; however, some trademarks (eg, the shape of bottles) are registered in Saudi Arabia. In the new law, inclusion of the term ‘packaging’ in the matter of trademarks appears to be an attempt to include 3D marks; nevertheless, the practice remains ambiguous.

The law does not recognise taste marks.

Registration process

Saudi Arabia has a fast-track online registration procedure. Depending on the number of office actions issued during substantive examination, the whole process from filing to registration takes up to four months.

When filing a trademark, applicants must provide the following:

  • a legalised power of attorney up to Saudi consulate level and notarisation in case of a Saudi entity;
  • a clear image of the trademark;
  • a priority document if priority is claimed; and
  • a commercial registration certificate.

The first step is to upload the power of attorney for examination by the trademark office. Following its acceptance, further documents related to the application can be initiated.

Saudi Arabia has adopted the International Classification of Goods and Services (Nice Classification), and the online portal for filing applications substantially includes all goods and services as provided for under the Nice Classification. It is not possible to select goods or services that are not available on the online portal. Likewise, it is also not possible to select prohibited goods and services, even if they are available on the online portal.

The duration of trademark registration is for 10 Hijra years (a Hijra year is 11 days shorter than a Gregorian year). Renewals can be filed during the final year of protection. There is a six-month grace period for renewals with an additional fee.

Non-traditional trademarks

Non-traditional trademarks are acceptable in Saudi Arabia. The Trademark Law recognises smells, sounds, packaging, shapes, colours and groups of colours as trademarks. Shape marks are commonly applied in Saudi Arabia; however, Trademark Office practice is not standardised and remains unpredictable. There are many shape marks or 3D marks which have been accepted by the Trademark Office, but the refusal rate remains high.

Handling refusals of trademark applications

It is possible to file an appeal against a refusal decision of a trademark application before the Trademark Appeal Committee. Appeals can be filed online. Applicants can also file appeals against conditions imposed by the Trademark Office. The period for appeal in any case is 60 days.

The decision of the Trademark Appeal Committee is subject to appeal before the First-Instance Administrative Court within 60 days, which is further appealable to the Administrative Court of Appeal. The final appellate body is the Administrative High Court.

Opposition process

Accepted applications are published on the Ministry of Commerce and Investment website for 60 days and any interested party can file an online opposition with the Trademark Opposition Committee.

Oppositions can be filed based on earlier registered trademark rights or an earlier pending application in Saudi Arabia. Oppositions can also be filed based on rights established by unregistered well-known marks having fame in Saudi Arabia.

The decision of the Trademark Opposition Committee is subject to appeal before the First-Instance Administrative Court within 30 days, which is further appealable to the Administrative Court of Appeal. The final appellate body is the Administrative High Court.

Licensing trademarks

The Trademark Law recognises the licensing of registered trademarks. Licence recordal is not mandatory. Licences can be exclusive and non-exclusive and can be limited to certain goods or services covered by registration.

Assignment

Registered trademark can be assigned in full or in part. Recordal of assignment is mandatory. Non-recorded assignment is not effective in relation to third parties.

Parallel imports and repackaging

In general, there is no express prohibition over parallel imports in the Trademark Law.

Any import of pharmaceutical products is subject to government approval. The import of products requires approval from the Saudi Food and Drug Authority (SFDA), and the procedure is regulated. The products to be imported must be chemically identical to the products registered by the SFDA. Pharmaceutical product imports coming into Saudi Arabia also carry packaging and labelling requirements and customs authorities will check the imports in accordance with such requirements.

In practice, only government hospitals, in certain special cases, import pharmaceutical products from abroad under SFDA approval. There are detailed guidelines on imports of pharmaceutical products in different categories, which clearly restrict any imports without SFDA approval.

The parallel imports regime of pharmaceutical products is therefore subject to the regulatory approval and fulfilment of the prescribed procedure. Although the parallel importation of pharmaceutical products is regulated and strictly examined, it may not be possible to enforce trademark rights against such imports.

Anti-counterfeiting and enforcement

Border control measures

Anti-counterfeiting and enforcement measures start with Saudi Arabia’s Border Control Measures. Saudi Arabia has very effective border measures. The legal representatives of brand owners can sign a memorandum of understanding with Saudi Customs to exchange information for the protection of trademarks at customs entry level.

According to procedure, brand owners can record registered trademarks with Customs for watching. Customs notifies all ports in the country of such information. Any suspected consignments are seized and local legal representatives are informed to confirm the nature of the imported products. The local agent must submit a written confirmation of the nature of the goods and the customs department will seize counterfeit consignments once confirmed by the brand owners.

This is a very effective way of protecting registered trademarks at entry point in Saudi Arabia. For pharmaceutical products, there are approved ports for import and clearance, therefore the border measures can be targeted at specific ports only. The SFDA approves such ports specifically for import and clearance of pharmaceutical products.

Anti-commercial fraud department

One of the options for the brand owners to handle the counterfeiting problem in Saudi Arabia when the goods are already imported or locally manufactured is through administrative action. Administrative action is initiated by filing a written complaint with the Anti-commercial Fraud Department (ACFD) in Riyadh. For each city, the ACFD requires separate complaints in accordance with the new procedure. Evidence of infringement in the form of a sample of genuine and infringing products, receipts from outlets selling infringing products and their address is required along with the complaints.

ACFD inspectors usually raid the sale or manufacturing points and seize the counterfeit products. On further investigation, the counterfeit goods can be destroyed. The ACFD can also recommend criminal action to the public prosecutor if it believes that there are criminal elements involved. In such cases the brand owner will not be party to it.

Court action

Trademark owners can also file action before the courts. There is a lot of confusion in Saudi Arabia’s legal practice with regard to trademark infringement actions. The question of whether filing a trademark infringement case before the competent court is premature if the aggrieved party did not adopt the administrative procedure remains unclear. Some of the courts have issued decisions that any trademark infringement case will be premature and not maintainable if, prior to filing infringement action, administrative action was not taken by the trademark owners. Nothing in the law supports the decision of local courts.

Recently, the competence of the Commercial Court also became part of debate. The First-Instance Commercial Court refused to accept its jurisdiction over trademark infringement matters, which was also devoid of convincing legal reasoning. These developments have caused considerable confusion in local practice.

The registration of a trademark is a pre-requisite for success in trademark infringement or counterfeiting cases. Unregistered rights are not generally recognised in Saudi Arabia except in cases of well-known trademarks in which the plaintiff is under a heavy burden of proof.

The following remedies are available under the Trademark Law:

  • interim injunction and precautionary measures;
  • permanent injunction;
  • an order to destroy all the infringing goods;
  • an award of damages to the plaintiff;
  • in case of deliberate imitation of the established mark, an award of adequate compensation other than the profit earned by the infringer – the court has discretion to award any amount in compensation to the plaintiff, while in practice, Saudi courts rarely grant compensation due to the heavy burden of proof required under Shariah principles;
  • an order from the court to oblige the defendant to disclose information about all persons or entities who contributed to the infringement, either through the production or distribution of infringing goods; and
  • financial penalties of between $270 and $266,700 may also be imposed – such penalties may be doubled in case of repeated infringement.

Confusion with international non-proprietary names

There are no specific provisions relating to international non-proprietary names (INNs) in Saudi Arabia’s Trademark Law. As a member of the World Health Organisation (WHO), in practice Saudi Arabia implements the World Health Assembly resolution over INNs and the Trademark Office will not allow any trademark which appears to be identical or confusingly similar to a known INN.

In addition to the WHO resolution over INNs, as a matter of good practice, the Trademark Office will not accept any trademark which is descriptive or generic. Since INNs are the generic names of pharmaceutical substances, the Trademark Office will not accept them under the Trademark Law provision which prohibits non-distinctive trademarks. The Trademark Office can also consult the SFDA while examining such trademarks.

The Saudi Authority for Intellectual Property was recently established and it is expected that trademark practice might change to some extent. It is unclear whether a distinctive element in addition to an INN will be acceptable as a trademark. Although, while interacting with trademark offices, the WHO secretariat always recommends that the registration of a trademark which is identical to or derived from an INN be prohibited.

There is no special legal provision or circular issued on INNs in Saudi Arabia.

Advertising

In Saudi Arabia, pharmaceutical-product advertising is governed under multiple laws, codes and directives, including:

  • the Saudi Code of Pharmaceutical Promotional Practices in Saudi Arabia;
  • the Pharmaceutical Institutions and Preparations Law, issued under Royal Decree M/31;
  • the SFDA Directives Governing Pharmaceutical Advertising and Procedures of Approval 2011;
  • the SFDA Directives Governing Promotional Materials 2011;
  • the SFDA Directives Governing Disease Awareness Campaigns 2014;
  • the SFDA Directives Governing Scientific Lectures and Conferences Directed at Healthcare Professionals and Procedures of Approval 2014;
  • the Private Medical Institutions Law, issued under Royal Decree M/40;
  • the Anti-drug and Psychotropic Substance Law, issued under Royal Decree M/39; and
  • the Anti-bribery Law, issued under Royal Decree M/36.

Trade name is part of advertising

Among others, the Code of Pharmaceutical Promotional Practices in Saudi Arabia stipulates that the following information must include in advertising:

  • the product’s trade name;
  • the product’s generic name; and
  • the name and address of the manufacturing company or marketing agent.

Advertising prescription-only medication

As per international practice, Saudi laws differentiate between prescription-only medicine and over-the-counter (OTC) medicine. Advertising to the general public for prescription-only medicine is prohibited in Saudi Arabia.

Advertising OTC medication

It is permitted to advertise OTC medication to the general public in Saudi Arabia. However, it is subject to the prior approval of the SFDA. The content of advertisements is examined by the SFDA and after obtaining approval, the SFDA approval number must be displayed in the advertising.

Prohibition of reference to brand names in disease-awareness campaigns

In Saudi Arabia, disease-awareness campaigns do not qualify as advertising. Such campaigns are solely to raise awareness of information relating to public health, including disease prevention, diagnosis and treatment alternatives.

It is prohibited to reference a brand name, trade name or other distinctive product sign. The campaign should focus on the necessity to consult a competent physician and should be targeted at the general public or any specific class or classes of the public, not healthcare professionals.

Generic substitution

In Saudi Arabia, it is not permitted for pharmacists to dispense medicine different from that indicated on the licensed physician’s prescription. Pharmacists are, however, allowed to issue generically equivalent medicines as a substitute, excluding medicines specified by the Health Ministry. Patient consent is necessary for drug substitution.

Online issues

It is not permitted to advertise medicinal products directed at healthcare professionals online.

Any pharmaceutical products purchased online are not exempt from the general rules, meaning that medicines purchased online will be subject to customs procedure in accordance with the SFDA regulations. For local online sales, the rules of prescription will be applicable.

Advertising on social media

There is no express prohibition to advertise medicines on social media. Such advertising may be considered to be targeting the general public.

When submitting an application for approval of an advertisement to the SFDA, the applicant must specify the means of advertising. The SFDA decision in this regard must be complied with.

Domain names disputes

The Saudi Network Information Centre is the authority which administers the domain name system. The following entities and persons can register a Saudi country code top-level domain name:

  • an entity physically located in Saudi Arabia;
  • a natural person, not underage, with a Saudi national identification card or equivalent document issued by the Ministry of Interior of Saudi Arabia;
  • an entity with a registration or licence issued by a pertinent authority in Saudi Arabia; and
  • an owner of a trademark or tradename that is registered in Saudi Arabia.

A domain name does not provide a trademark right in Saudi Arabia. Unless the domain name is also a registered trademark or unregistered well-known trademark of the owner, it will not be entitled to trademark protection.

Kadasa Intellectual Property

Ibn Katheer Street, Building 7601

PO Box 20883

Riyadh 11465

Saudi Arabia

Tel +966 11 479 2053

Fax +966 11 476 1044

Web http://www.kadasa.com.sa/

Mohammad Jomoa

Partner

[email protected]

Mohammad Jomoa is partner and CEO at Kadasa Intellectual Property (formerly Kadasa & Partners). He has 28 years of diverse experience in intellectual property, particularly in trademark and patent litigation. He regularly advises clients on techno-legal issues in the Middle East and the Saudi government on IP legislation. Mr Jomoa has acted as external counsel for many pharma companies and worked extensively on data protection, patent linkage and pharmaceutical laws. He is also a regular speaker on IP issues at local universities. Mr Jomoa is a chemical engineering graduate from the University of Toledo, Ohio, and holds a postgraduate diploma in IP law from Franklin Pierce Law Centre, Concord, New Hampshire and the Gulf Institute for International Law.

Asif Iqbal

Head of IP legal

[email protected]

Asif Iqbal is head of IP legal at Kadasa Intellectual Property. He is a graduate of law and business administration, and also holds a WIPO-administered LLM in IP law from the University of Turin, Italy.

His experience includes engagement with a leading IP consulting firm. He also served as assistant director with the National IP Office of Pakistan for five years, where he was engaged in different IP and administrative roles. Since joining Kadasa in 2015, he regularly advises clients on multiple IP areas, including trademark, copyright, domain names and patent legal matters, particularly infringement proceedings and pharmaceutical laws. Mr Iqbal has attended multiple international conferences and workshops for WIPO as a participant and speaker. He is a member of INTA and the INTA Free Trade Agreement Subcommittee. He has authored several articles and commentaries on IP issues.