Eslam Farouk and Nehad Farouk: Viewpoint

Viewpoint: Eslam Farouk and Nehad Farouk

As the third-largest emirate in the UAE, Sharjah continues to develop various areas of its economy, particularly in the field of commerce. In this context, safeguarding the intellectual property (IP) of businesses is indispensable as the country moves, through the growth of the non-oil sector, towards a more diversified economy.

IP covers areas including industrial or commercial designs, patents, copyrights and trademarks. Trademarks are any visible mark – including symbols, designs and words – used by a company to identify and distinguish its products, goods and services from that of other companies. UAE regulation covering trademarks is part of a broader shift towards the regulation of IP through international collaboration.

The World Intellectual Property Organisation is a specialised agency of the UN whose objective is to promote the development of an effective international IP system that enables innovation for the benefit of all. As Sharjah continues to develop, the protection of the trademarks of both small and medium-sized enterprises (SMEs) and more established, multinational companies is becoming increasingly vital.

Adequate trademark protection is a means to promote and encourage both creativity and innovation. Trademark law provides the registered owner with the exclusive right to use their logo, brand text or mark along with the right to bar others from using it. This ensures that the trademark of a business will remain a unique part of its corporate identity, distinguishing it from its competitors. Sharjah has no separate decree covering trademarks, rather Federal Law No. 37 of 1992 on Trademarks is applied across the UAE. The law outlines the concept of a trademark as content such as names, signatures, drawings, advertisements and logos, which distinguish goods, products or services to indicate that they belong to the trademark’s registered owner. Furthermore, the law lists prohibited trademarks, including geographical names, public emblems, flags and logos, and the use of third-party names or images obtained without approval. It also covers the process of registering a trademark with the Trademark Department of the Ministry of Economy, and, most notably, covers the sanctions incurred in the event of infringement or forgery. These penalties include both prison sentences and fines for forging a registered trademark and misleading the public. Nevertheless, many businesses are unaware of the value of their trademark until substantial damage has been incurred by the company due to infringement.

Since trademarks are one of the key factors that establish and guarantee the reputation of a business, they are fundamentally important assets to economies. The trademarks law encourages businesses to innovate and create through trademark protection in both Sharjah and the UAE as a whole.

This protection is particularly important given that more than 4000 multinational companies are based in the Sharjah Airport International Free Zone. Given the size of the business environment, the confusion of products and unfair competition cannot be avoided. Consumers are consequently easily misled by similar products and services from companies operating in the same sectors of the market. Unfair competition can also occur when one company infringes or forges another company’s registered trademark, which causes a substantial loss of profit to the latter firm.

Businesses in Sharjah, whether they are smaller start-ups or more established companies, must not only focus on their business operations – for example, profitability and expansion – but must also consider their intellectual output, such as their unique products, creations and services, as an integral part of their business’ assets. Ensuring trademark security provides numerous advantages and allows firms to make considerable profits, ensuring smoother operations without any interruption or hindrance due to trademark infringement. If a trademark is not registered, a business is in a much weaker position to protect and defend its rights.