21 Jun 2022
According to World Health Organization (WHO) evaluations, one out of every ten medical items, primarily antimalarials and antibiotics, in low and middle-income countries is substandard or counterfeit, resulting in millions of deaths each year and billions of dollars in additional healthcare costs owing to treatment failure. This article looks at the UAE's legal system for enforcing trademark rights against counterfeiters and infringers.
The UAE has passed two major regulations in recent years to combat substandard or counterfeit pharmaceutical items, namely the Anti-Commercial Fraud Law and the New Pharmaceuticals Law, which strengthen the protection granted to trade clothing or pharmaceutical exports. Both regulations include particular criminal offences connected to counterfeiting/forging pharmaceutical products, which significantly enhance the existing penalties for counterfeiting or copying trademarks as defined by current trademark law.
Trademark Law - Federal Law Number 37 of 1992 (as amended)
There are no stated reasons in UAE trademark law for what is often referred to as "trademark infringement" in other jurisdictions. Articles 37 and 38, on the other hand, deal with criminal offences involving falsifying documents and duplicating registered trademarks. Because the phrasing of these infringements makes it impossible to take action against anything other than direct counterfeit / imitation trademarks, enforcement action in cases including ideological similarities, business attire, interface alias, or unregistered rights, in general, would be problematic.
Despite the fact that trademark law allows for the registration of non-traditional trademarks such as three-dimensional forms of drugs or a unique shape of an inhaler, it has always been proven that enforcing unregistered rights in the absence of similar or near similar trademark registration is extremely difficult. Furthermore, trademark law stipulates that even penalty for deliberate infringements begin at 5,000 dirhams.
The following are the penalties for forgery/counterfeiting violations (as defined in Articles 37 and 38 of the Trademarks Act):
- An indefinite term of imprisonment
- A minimum of AED 5000 fine
- Confiscate and destroy any infringing items and
- Business closure for up to 6 months of the breach (applicable to repeat offenders only).
Federal Law Number 19 of 2016 - Anti-Commercial Fraud Law
The UAE introduced a new Commercial Anti-Fraud Act in 2016. (repealed and replaced the law of 1979). Commercial fraud or attempted commercial fraud involving the importation, exporting, re-exporting, production, selling, displaying, or purchasing for the purpose of selling, storing, renting, marketing, or exchanging any corrupt, counterfeit, or fake goods is covered by the Anti-Commercial Fraud Act.
The new legislation aims to combat economic fraud involving counterfeit, tampered, or fabricated items. The law specifies each of these goods, which are summarized as follows:
'Counterfeit goods' are goods having legally registered trademarks that are used without permission.
'Fake Goods' are goods that have been illegally modified or promoted and do not meet the laws, conditions, requirements, specifications, and standards established in the UAE's rules, regulations, laws, and decisions.
'Corrupt goods' are goods that have been destroyed or rendered unusable as a result of storage or transportation.
Counterfeiting is defined as the unauthorized use of a lawfully registered brand. A trademark holder's capacity to assert rights under this Act is similarly limited, as any apparent divergence from a registered trademark may fall beyond the scope of this clause.
If the phony, corrupt, or counterfeit goods are related to prescription pharmaceuticals, however, the minimum penalties will be fifty times larger than the Trademarks Law's minimum fine, creating a real barrier to counterfeit prescription drugs.
The following are the penalties under the Anti-Commercial Fraud Law:
- Imprisonment up to two years,
- A fine of between AED 250,000 and AED 1 million,
- Seizure/destruction of fraudulent items, and
- Shutting off businesses for up to 6 months.
Regarding Medical Products, Profession of Pharmacy and Pharmaceutical Establishments - Federal Law Number 8 of 2019
It is illegal to counterfeit or forge a medical product, or to trade, advertise, sell, display, or otherwise export counterfeit or forged medical items, according to Federal Law Number 8 of 2019 (Pharmaceuticals Law).
"A medical product that has been willfully created for a fraudulent purpose, including the act of copying another medical product by employing the similar artistic shapes and colors as the packaging and container, as well as the label of the original product," according to the law.
Falsified product penalties are identical to those imposed under the Anti-Commercial Fraud Act. They are as follows:
- Imprisonment,
- Fine of AED 200,000 to 1 million AED,
- Seizure/destruction of falsified products,
- Shutting off the infringing facility for up to 3 months,
- Permanent revocation of the license to operate the infringement facility.
In safeguarding the commerce and presentation of medical items, the Pharmaceuticals Statute appears to go much beyond the Anti-fraud law and the Trademarks law. A party must fabricate or mimic a registered brand to exploit its rights under trademark law. Forging systems need the illicit use of a registered brand, according to Anti-Commercial Fraud legislation.
According to the Pharmaceuticals Act, imitation does not have to be based on a registered trademark, but rather on "the same creative shapes and colours as the package, container, and label of the original product." The Act does not state that trademark registration is required. It is unclear how this clause would be implemented in practice, but it appears that it will allow for the prosecution of counterfeit pharmaceutical items without the need for involvement from the trademark owner or a local licensee from a public health standpoint. To summarize, the UAE now has a robust legislative framework that protects consumers and brand owners against counterfeit medications, thanks to the new Anti-Trade Fraud Act and the new Pharmaceuticals Act, both of which were enacted within the last several years. If you have any legal queries reach out to well-qualified lawyers at Fotis International Law Firm