Legal Framework for Trademark Licensing in the UAE

Entering the UAE market through trademark licensing is an effective and viable alternative for brand owners seeking to expand their presence in this region. Trademark licensing allows a brand owner (the licensor) to grant another party (the licensee) the right to use a registered trademark under certain conditions. This method can offer significant advantages, including the ability to leverage local market expertise and minimize the risks associated with direct market entry.

Legal Framework:

To license a trademark in the UAE , the trademark must first be registered in the country. The duration of the license cannot exceed the validity period of the trademark registration but can be renewed in alignment with the renewal of the trademark registration. The scope of the license is also limited to the goods or services for which the trademark is registered.

A crucial aspect of trademark licensing in the UAE is the need for the license agreement to be recorded with the UAE Trademark Office. Failure to do so means that the agreement does not provide legal rights to the licensor or licensee against third parties. If the license agreement is executed within the UAE, notarization is required. For agreements executed outside the UAE, both notarization and legalization from the UAE consulate in the country where the agreement is signed are necessary.

Types of Trademark Licensing Agreements:

There are various ways in which trademarks can be licensed in the UAE, including:

Franchising Agreement: This is a common method where the franchisor grants the franchisee the right to use the franchisor's trademark. This type of agreement is closely linked with intellectual property rights and can be an advantageous way to start a business under an established brand.

Merchandise Licensing Agreement: This agreement allows the licensee to distribute, advertise, and sell the trademarked property, such as in films, television programs, and video games.

Brand Extension: In this approach, a brand owner uses an existing, well-known trademark to introduce a new product in a different category, thereby leveraging brand equity.

Co-branding: This involves two or more brands combining their trademarks on a single product, often to enhance appeal or enter new markets.

Statutory Requirements for Trademark Licensing:

The UAE Trademark Law (Federal Law No. 37 of 1992) provides clear guidelines on trademark licensing. The law permits the inclusion of several key conditions in the licensing agreement, such as:

• Limitation of jurisdiction (either the entire UAE or specific emirates).
• Exclusive or non-exclusive rights.
• Restriction on sub-licensing.
• Duration of the license.
• Quality control provisions.
• Protection of the trademark's goodwill.

Articles 30 to 34 of the UAE Trademark Law specify that a trademark owner may license one or more parties to use the trademark for some or all of the products or services for which it is registered. The law allows for both exclusive and non-exclusive licenses, where an exclusive license means only one licensee has the right to use the trademark, and no other licenses can be granted for the same goods or services within the same territory. A non-exclusive license, on the other hand, allows multiple licensees to use the same trademark.

However, it is important to note that an unrecorded license does not provide any enforceable rights against third parties. Quality control is an essential, though not mandatory, clause in the license agreement. Unlike some other jurisdictions, the UAE does not invalidate a trademark for lack of quality control provisions (known as a "naked license").

Conclusion:

Trademark licensing is a strategic method for brands to expand their market presence in the UAE. By licensing their trademarks, brand owners can increase the value of their trademarks and extend their market reach. However, it is essential for both licensors and licensees to be aware of the legal considerations involved. Ensuring that the trademark license is recorded and understanding the scope and limitations of the agreement are crucial steps in protecting the rights of all parties involved.

The content provided here is intended to offer a general overview of trademark licensing in the UAE . It is advisable to seek specialist legal advice to address specific circumstances and ensure compliance with all applicable laws and regulations.