The GCC Economic UnionWe present herein trademarks-related cases in practice after bringing GCC Unified Trademark Law into force and in view of a court ruling rendered by the Kuwaiti Court of Appeal cancelling Bahraini Trademark in favor of Kuwaiti Trademark based on the identical phonological element.

The GCC Economic Union is the objective of unified Trademark Law:

The Gulf Cooperation Council Countries have decided to enhance and promote the economic unity through unification and harmonization of their laws, including the GCC Unified Trademark Law which supersedes all local laws of the Gulf Countries. The unification of Trademark Law across all Gulf Cooperation Council Countries aims at unifying and expanding the legal protection procedures at the gulf level. Accordingly, it encompasses protecting the trademark in other countries. Hence, what would be the merit of having a unified trademark law if the regulatory and administrative bodies and competent courts fail to protect trademarks from being infringed and illegitimate competition.

 

In 2018, the Kuwaiti Company desired to expand its business across the Gulf, it was surprised by the rejection of the Ministry of Commerce in the Kingdom of Bahrain to register it based on the fact that there is a similarity with a trademark of Bahraini Company. Whereas the Kuwaiti Company’s trademark took the precedence of registration being registered in 2017. We, therefore, approached the competent court requesting the trademark cancellation. While the case is being deliberated, the Bahraini Company submitted its defense before the Kuwait Court confirming that it was also registered with the Kuwaiti Ministry of Commerce in 2018.

The grounds on which we relay to cancel the Bahraini Company’s trademark subject to GCC Unified Trademark Law

First: The Phonological element of the trademark (verbal component):

A phonological element of trademark is when the sound is used to perform the trademark function of uniquely identifying the commercial origin of products or services.

Whereas it is established that the phonological element of term (coffea) of the Kuwaiti Company-owned trademark is identical to that of the Bahraini company’s trademark obviously driving to confusing the public. Trademark imitation is based on the similarities rather than the differences which cause the confusion for the public and consumers. Differentiation between two trademarks does not depend on letters, symbols, or images of the trademark, it, rather, relies on the general image and impression that comes to the mind as a result of combination of such letters, symbols, or images as well as the form in which it appears in a trademark or others regardless of its elements. And whether any trademark shares in one or more part of the other trademark which confuse the consumer of average attention, rather than the technical expert.

It is established that the (coffea) represents the dominant element, which is common element with the disputed trademark, in the Kuwaiti company's trademark. Also, the essential element is that when the marks comprise verbal and visual components, therefore, in form, the verbal component of greatly affects on the consumer than this component. This is because the audience does not tend to analyze the trademarks and goes to trademarks with the easier verbal component rather than describing of formal elements.

Second: Audio element of trademark is identical

It is also established that the audio element of coffea of the Kuwaiti company is identical to the pronunciation of (coffea) trademark of the Bahraini company. Therefore, it will be identical in both trademarks for the targeted audience who should be taken into account from the beginning.

It is established that the formal element of the trademark is not the basic element, unlike the element of trade name which serves as the most important element. If two friends agree to go to a particular restaurant, they will agree on the name of trademark. This is called the sound of trademark, while formal element of the restaurant’s trademark is not mentioned.

It is commonly known by the audience that trademark name is most often used and not the formal element. This confirms that the name that has been written on the trademark is an essential element and an integral part of other elements of the trademark unlike what has been decreed by the Court of First Instance in its whereases section. Hence, it is unacceptable to not consider the element of trademark name as an integral part of the trademark and that the name element serves as the basis. Thereafter, the form and symbols elements come. The name is the element that is being used by people, audience, and customers to name and define the product and not the form element. As mentioned earlier, the form changes unlike the name element which holds constant.

Third: The essential elements of trademark are the general form and constituting an integral part:

It is established that the trademark is comprehensive element which includes form, symbols, and letters, and is not possible to be divided or separated. In particular, the appealed judgment stated, in whereases section, that the Court of First Instance decided to divide and separate between the name and form of the trademark as follows:

Having reviewed the Kuwaiti Company Trademark, the Court found that it is the term “coffea kw” with a red rooster having a cup in its middle, while the Bahraini Company Trademark, requested to be cancelled, is the term (coffea) above which a drawing of a different shape with a black background. Even if both trademarks have the same word (coffea), they, however, were completely different in terms of form, drawings and color, the fact that shows no confusion would occur between them among the public. Using the same term (coffea) by both of them shall not affect it, on the basis that this is a common, non-innovative and non-protected term being a French term that means (coffee), so long as it had been used in a distinctive drawing, form, frame, or color distinguishing it from the other users. It itself cannot be characterized by a monopoly. So, prevention of using it as trademark on the ground that it was used previously will go against logic, so long as this falls under a framework that ensures no confusion and misleading could occur for the consumers and audience.

Whereas such argument is invalid, as the trademark is a range of elements constituting inseparable and integral part. The name and form are a single and indivisible element which is in contrary to what was ruled by Court of First Instance. It has decided that the form of trademark is different which stands the most important element, i.e., even if both companies have same the name, so long as their forms are different. It is worth mentioning that the form of trademark changes overtime, namely, the international and local companies have changed their forms over years, while the names hold constant without change.

Fourth: Trademarks Legal Protection Limits

It is established that the trade name and trademark are created when they are registered and notified completely. Therefore, the protection expires with the expiry of this registration, either by not renewing, deleting, or cancelling its registration.

Therefore, the right of the trade name and trademark’s owners should be principally protected through maintaining his/her ownership of the trade name for ten years during which such name will be protected from being infringed.

However, should he/she neglect to renew it in the commercial register within the prescribed date, i.e., after expiration of the ten-year period, his legal right to the trade name will be removed. Subsequently, the commercial register office will delete this entry after verifying the reason triggering the same, i.e., any of grounds of expiration of the trademark ownership.

Accordingly, the events of expiration of ownership of the trade name and trademarks are determined in the provisions of the law, i.e., the Article No. (20) of the GCC Unified Trademarks Law No. 13 of 2015.    

Adopting a contrary opinion is invalid and incorrect. Should a trademark or trade name be registered, it will be considered to be legally protected for a ten-year period, even if it is a common name, if not, what would be the benefit of the trademark registration. When the legal protection period expires, the trade name would be of the public funds and may be registered for the third parties without being considered as an infringement on the right of the first trader, i.e., the owner of the basic trademark.

Whenever the entry is registered in the commercial register and published in Al Kuwait Al Youm Gazette, such name gains immunity which should not be infringed by any one. It is further established that such legal protection is not absolute, it, however, is limited in terms of the type of business. Accordingly, the owner of the trade name and trademark is not entitled to preclude third parties from using this name unless such third party carries on a business that is similar to his business, the fact that raises concerns regarding the similarity of the names which may mislead his customers and decrease his profits.

Sixth: Changing the form of trademark while maintaining the trade name aims at misinforming and misleading the concerned parties that both trademarks are different:

This confirms the bad faith of the Appellee Bahraini Company, namely, changing of the form of trademark to mislead and misinform the Kuwaiti competent authorities that there is no similarity. This is what happened and facilitating the registration of trademark in Kuwait.

Further, we reiterate that the Kuwaiti Company takes precedence in registering the trademark in the State of Kuwait in 2017. It is established that the Bahraini Company domiciled in the Kingdom of Bahrain was registered in 2018. Further, it is established that the Company’s founders and partners are Kuwaiti nationals, who, after one year of the registration date of the Kuwaiti Company’s trademark in Kuwait, managed and succeeded to circumvent the Kuwaiti Ministry of Commerce through establishing a company in Bahrain to benefit from goodwill of (coffea) trademark inside the State Kuwait. This Bahraini Company continued to illegally and unfairly crowd out and compete the Appellant Company, which, upon completing the trademark registration procedures, swiftly sought to register its trademark in several countries without having a physical premise in such countries. Its registration is a shadow whose goal is to crowd out the Kuwaiti Company through infringing on its trademark. This is considered as  unfair competition.

Seventh: The Kuwaiti Company validly and legitimately requests protecting its trade name and trademark for priority of registration and use:

It is further decreed that:

The ownership of trademark shall be established for either of litigants who proves priority of use the trademark.

The trademark owned by the Kuwaiti Company is subject to legal protection in accordance with the above-mentioned trademark law. The definition set out in Article (2) of Trademark Law is applicable to the Kuwaiti Company’s trademark and defines the trademark as follows:

Trademark: Shall be considered a trademark anything having a distinctive form such as names, words, signatures, letters, figures, drawings, logos, titles, hallmarks, seals, pictures, engravings, packs or any other mark or group of marks if used or intended to be used either to distinguish goods, products or services of a facility or other facilities or to indicate the rendering of a service or the control of inspection of goods or services. The voice or odor shall be considered as part of the trademark.

Article (3) of the same law excludes certain trademarks from the scope of trademark and provides for:

The following shall not be registered as a trademark or an element thereof:

Marks that may mislead the public or include misstatements on the origin or source of products or services or their other properties as well the marks that include a fictitious, imitated, or forged trade name.

Any trademark that is similar to a trademark that was previously lodged or registered by  third parties for the same goods or services or for related goods or services, if the use of  such trademark to be registered will mislead the consumers as to the goods or services of  the registered trademark owner or will prejudice his interests.

The above-mentioned provisions mean and show that the trademark is a distinctive form that distinguishes the trademarks from one another. The form of trademark comprises name, word, image, voice, or odor. The legislator , however, makes exclusions.

In view of the foregoing, Article (7) of Trademark Law provides for:

“Any person who, in a good faith, registers a mark shall be deemed its sole owner. The ownership of such mark may not be disputed if the person who registers it, uses it uninterruptedly for at least  (5) years from the date of registration without an action being lodged against him ruling  for its validity.

Eighth: Entitlement to directly request cancelling the competent court:

The person who has registered the mark and has the priority to use the mark may request  the court of jurisdiction to cancel this registration within five years of the registration date, unless it is established that the use of such mark is expressly or impliedly approved by the  one who registered same in its name”.

Article (22) of the same law provides for:

Notwithstanding the provisions of article 7 hereof, the Competent Authority and any concerned person may recourse to the court of jurisdiction to apply for deregistering the trademark that was illegally registered. The Competent Authority shall deregister the trademark if it receives a final judgment in this regard”.

Therefore, the Court of Appeal, presided over by the Judge/ Mohammad Ibrahim Khatan and membership of the Judge/ Mohammad Hussein Khaled, rendered a judgment revoking the first instance judgment and cancelling the trademark of Bahraini Company for the following grounds:

First: The first instance judgment mischaracterized the lawsuit:

This judgment characterized the Kuwaiti Company’s motions as follows:

Requesting a judgment to accept the lawsuit in form and, in merits, to overturn the negative decision of administrative authority to abstain from cancelling the registration of trademark registered in the name of Bahraini Company.

However, the Kuwaiti Company’s motions, in the lawsuit, are that it requests a judgment to accept the lawsuit in form, and, in merits, to cancel the Bahraini Company’ trademark in accordance with the provision of Article 22 of Law No. 13 of 2015 on GCC Trademark Law.

Whereas the legislator has determined in the Law no. 13 of 2015 concerning GCC Trademark System, several means to challenge against the registration of trademark and to request cancellation in three cases as follows:

1- First of which was stated under the Article 7 of the said law, wherein the legislator deemed any person who, in a good faith, registers a mark shall be its sole owner. The ownership of such mark may not be disputed if the person who registers it, uses it uninterruptedly for at least (5) years from the date of registration without an action being lodged against him ruling for its validity. Further, the legislator allowed for the person who has registered the mark and has the priority to use the mark may request the court of jurisdiction to cancel this registration within five years of the registration date, unless it is established that the use of such mark is expressly or impliedly approved by the one who registered same in its name.

2- The second case, which is the most common case, was stated in the Article no. (14) of the same Law, wherein the legislator makes it necessary for the competent authority when accepting a trade mark, prior to its registration, to announce it through the means of publication to be determined in the Executive Regulations and obliged the registration applicant to pay publication costs. The legislator allowed for any concerned person, within sixty days from the date of publication, to object to the registration of a mark under a written letter.

3- On the other hand, the legislator expressly decided that any trademarks that are identical or similar to a mark previously registered by others for the same goods, services or similar goods or services if the use of the mark to be registered would generate linkage with the other owner's registered products or services or damage his interests shall not be deemed as trademark.

In view of the foregoing, and, upon comparing the Kuwaiti Company’s trademark (COFFEA kw) that contains a red roaster, carrying on a food and beverage activity and holding arrangement of temporary residence class (43) with the Bahraini Company’s trademark (COFFEA) that comprises a different shape above the name and carrying the same above-mentioned activity and class, it is established that both trademarks are entirely identical in terms of the main distinctive term (i.e. COFFEA) including identical letters, drawing method, pronunciation, and phonological element of term. Regardless of the shape associated with any of them, which does not effect as compared to main word of the trademark, i.e. (COFFEA), both trademarks are identical in the activity and class, to the effect that misleads and confuses the targeted consumers. Based on the foregoing, whereas the registration of the Kuwaiti Company’s trademark at the Ministry of Commerce and Industry in the State of Kuwait was made on 16/11/2017, while the Bahraini Company’s trademark was registered on 28/8/2018. Further, the registration of the Kuwaiti Company’s trademark was made before the registration of the Bahraini Company’s trademark, therefore, the registration of Bahraini Company’s trademark was issued improperly and violating the express provisions of the law. Thus, a judgment cancelling the same is to be rendered pursuant to the above-mentioned Article no. 22.

Whereas the appealed judgment has adopted a contrary opinion and was rendered in violation of the proper law, it, therefore, should be revoked.

Below are our recommendations for the best application of GCC Unified Trademark Law:

1. Determining the Scope of Trademark Protection in GCC.

2. Determining the competent court, such as the European Union, to save litigants’ money though the payment of the court fees one time. Under the existing situation, this who files a lawsuit will incur huge fees because he has to file the same before all GCC courts on a separate basis, accordingly, he will pay the fees of all courts as well as attorney fees in each country separately.

3. Standardizing the registration fees based on a reasonable cost, such as the European Union. Paying fees for each country separately is seemed illogical. So, what would be benefit of the unified law?

4. Like the trademark, email is an intangible element of the business that must be protected from any infringement. The registration of trademark following the registration of email constitutes an infringement on the latter.

5. Registration of the trademark should be, on a mandatory basis, linked with the registration domain names with one governmental authority. Imposing a prior oversight over the registration of domain names, to the effect that ensures the protection of the trademark and the non-occurrence of disputes.

6. Regulating the provisions of electronic trademarks (i.e., domain names) under a regulation that bring it together with the traditional trademarks. The bad faith and hacking should be taken into consideration in this aspect. It should provide that the competition of electronic trademark falls under the unfair competition cases, which, in our opinion, will be most visible manifestation in the foreseeable future.

7. Introducing an article that determines the bad faith cases, as an example.

8. Stressing on the need for a unified legal protection under a specific and express article.