Trademark Penalties in the Egyptian, Qatari, and Saudi Laws

                                                        Trademark Penalties in the Egyptian, Qatari, and Saudi Laws

Introduction:

A trademark is any sign that distinguishes a product, whether a good or service, from others. It specifically includes distinctive shapes, signatures, words, letters, numbers, designs, symbols, trade names, stamps, seals, images, embossed designs, and color combinations that have a specific and distinctive form. It may also comprise any combination of these elements if they are used or intended to be used in distinguishing products of industrial or agricultural work, forestry, or natural resources, or any goods. Alternatively, it can indicate the source of products or goods, their type, category, quality, preparation method, or service provided. In all cases, the trademark must be visually perceptible.

In the context of protecting trademarks from exploitation, the legislators in the Egyptian, Qatari, and Saudi legal systems have established penalties for anyone who forges or imitates a trademark in a manner that misleads the public. This also applies to anyone who intentionally uses a forged or imitated trademark, or anyone who sells, offers for sale, or possesses with the intent to sell or trade products bearing a forged or imitated trademark or an unauthorized mark, while being aware of this fact.

Before explaining the penalties for trademark forgery and imitation, it is essential first to differentiate between the concepts of forgery and imitation and the protection of famous trademarks:

• Trademark forgery: This refers to the creation of an exact replica of a registered trademark, whether with the intent to profit by selling the forged product or merely to attract public attention. It could mislead viewers due to the potential for fraud and deception.
• Trademark imitation: This refers to the creation of a trademark that is overall similar to another trademark in such a way that it is difficult to distinguish between them. The crime of imitation is established even if the two marks are not identical; it is sufficient to imitate the essential elements of the trademark, including symbols, designs, colors that take on a specific form, names, and writing styles.

The Egyptian court of cassation has established a principle regarding the imitation of trademarks, ruling that: “The existence of similarity in the essential part of the two marks regarding the writing style and distinctive

design and their placement on products of the same category is sufficient to raise confusion that the products of the fourth respondent belong to the products of the appellant and leads to misleading the consumer public. According to (Cassation No. 6286 of 79 Q – on 22/03/2011 – Vol. 62 p. 414), The ruling of the contested judgment, which rejected the case due to the differences between the two marks without considering this similarity, is contrary to the law.”

3. Protection of famous trademarks in Egypt:

The rulings of the court of cassation regarding the protection of famous trademarks in Egypt states:

The use by the appellant company of the well-known trade name of the first respondent company and its placement of the same type of products as those of the latter company leads to confusion and the mixing of products, inducing a belief contrary to reality about a connection between the two companies. The ruling of the contested judgment to prevent the appellant from using the trade name is valid, and the fault of the appellant company, warranting compensation, is justified. The objection to this is a subjective dispute that is not acceptable.” (Cassation No. 8121 of Judicial Year 81, 9560, 9627 of Judicial Year 82, dated 11/06/2013)

The implication of the aforementioned ruling is that the owner of a famous trademark in Egypt has the right to prevent others from using it and to seek compensation from them, provided they can prove the fault of the other party, the damage incurred, the causal link between them, and specify the losses suffered due to this infringement and the profits missed.

First – Penalties for forgery and imitation of trademarks in Egyptian law:

The regulatory framework for trademarks in Egypt is established by the intellectual property rights protection law No. 82 of 2002, which repealed law No. 57 of 1939 concerning trademarks and trade indications, as well as law No. 132 of 1949 concerning patents, designs, and industrial models, and law No. 354 of 1954 concerning copyright, any conflicting provisions are also repealed.

Article 113 of this law outlines the penalties for forgery and imitation of trademarks, stating: “Without prejudice to any harsher penalty stipulated in any other law, anyone who forges a trademark registered according to the law or imitates it in a way that misleads the public shall be punished by imprisonment for a period not less than two months and a fine of no less than five thousand Egyptian pounds and no more than twenty thousand Egyptian pounds, or by one of these penalties:

1. Anyone who forges a trademark that has been registered in accordance with the law or imitates it in a way that misleads the public.
2. Anyone who intentionally uses a forged or imitated trademark.
3. Anyone who places intentionally on their products a trademark owned by another.
4. Anyone who sells, offers for sale, or possesses for the purpose of sale or trading products bearing a forged or imitated trademark, or an unauthorized mark, while being aware of this, shall be subject to penalties. In the case of recidivism, the penalty shall include imprisonment for a period of no less than two months, along with a fine of no less than ten thousand pounds and no more than fifty thousand pounds. In all cases, the court shall order the confiscation of the products subject to the crime, as well as any amounts or items obtained from it, and the tools used in committing the crime. Additionally, the court may order the closure of the establishment used by the convicted person in committing the crime, for a period not exceeding six months. In cases of recidivism, closure is mandatory, and the court must enforce it. Recidivism is considered an aggravating circumstance, which occurs when the convicted person repeats the criminal act for which they have previously been sentenced.

The estimation of compensation is independent of the judge’s evaluation, provided it is based on valid grounds connected to the established facts in the case and justifications that are commensurate with the damage, without exaggeration. This includes both elements of the loss suffered by the aggrieved party and the profit missed. The contested judgment’s refusal to compel the second respondent to compensate for the loss that the appellant company incurred due to the infringement of its trademark is erroneous and contrary to the law.”
(Cassation No. 8680 of Judicial Year 82, dated 24/01/2017)

According to the aforementioned ruling, two essential conditions must be met for the injured party to be entitled to compensation, the existence of loss sustained by the injured party and the profit missed, the claimant for compensation in this regard must provide evidence of the losses and missed profits that occurred.

Second – Penalties stipulated in Qatari law regarding forgery and imitation of trademarks:

Qatari law No. 9 of 2002 concerning trademarks, trade indications, and geographical indications, as well as industrial designs, governs the protective measures and penalties related to the forgery and imitation of trademarks or their unauthorized use, or the carrying of any false commercial indication, name, design, or industrial model, or geographical indication contrary to the law.

1. protective measures and precautionary procedures for trademark:

Article 46 of law No. 9 of 2002 states:

1. Any interested party may obtain an order from the competent civil court for precautionary measures to be taken, particularly the following:
2. a) Drafting a detailed inventory and description of local or imported products, packaging, documents, store names, or other items bearing a forged or imitated trademark or used without right or carrying any false commercial indication, name, design, industrial model, or geographical indication, as well as inventorying and describing documents or materials used in committing any of the aforementioned acts.
3. b) Imposing a seizure on the items mentioned in the previous paragraph, provided that the seizure shall only be imposed after the applicant deposits a security deposit determined by the court as a guarantee of the seriousness of the request and to compensate the seized party if applicable.
4. The order may include the appointment of one or more experts to assist in the inventory and actions taken for precautionary measures.
5. After the seizure is imposed, any interested party may contest the adequacy of the security deposit provided by the seizing party through a lawsuit filed before the competent court.
6. In all cases, the precautionary measures taken shall lapse and become void if they are not followed by the filing of a civil or criminal lawsuit against the party against whom those measures were taken within ten days following the issuance of the order.
7. The seized party may file a claim for compensation for the seizure, and the claim must be notified to both the seizing party and the competent civil court clerk within ninety days from the expiration of the time limit

stated in the previous paragraph or from the date of a final judgment dismissing the seizure; otherwise, the right of the seized party to file it shall lapse.

6. The security deposit shall be returned to the seizing party in the following cases:
7. a) If a final judgment is issued in their favor.
8. b) If the ninety-day period stipulated in paragraph (5) of this article expires without the seized party filing a claim for compensation for the imposition of the seizure during that time.
9. c) If a final judgment is issued rejecting the claim of the seized party.”

the Qatari legislator has authorized any interested party to submit a request via a petition to issue an order for the seizure of products that bear a counterfeit or imitated trademark or are used unlawfully, or that carry any false statement, commercial name, industrial design, or geographical indication contrary to the law, after depositing with the court’s registry a guarantee determined by the court to ensure the seriousness of the request and to compensate the seized party in the event of a judgment rejecting the seizure if the conditions set forth in paragraph “5(b)” of the previous article are met.

In this regard, article 51 of the same law states:

“Any interested party has the right to resort to the competent civil court to prevent the continuation of the violation as defined in Articles (47) and (48) of this law or to avert its occurrence, in addition to claiming the due compensations.”

Thus, the Qatari legislator has permitted concerned parties to seek recourse to the judiciary to prevent a violation of the trademark, leading to a precautionary measure to protect the trademark even if the violation has not yet occurred.

1. B) Regarding penalties for counterfeiting and imitating trademarks, Article 47 of the same law stipulates:

“Without prejudice to any harsher penalty prescribed by any other law, any person who commits one or more of the following acts shall be punished by imprisonment for a term not exceeding two years and a fine not exceeding twenty thousand Qatari Riyals, or by one of these penalties:

1. Counterfeiting or imitating a registered trademark, or counterfeiting or imitating a commercial name or geographical indication or industrial design in a manner that misleads the public or causes confusion.
2. Intentionally using a counterfeit or imitated trademark or commercial name or geographical indication or industrial design.
3. Intentionally placing on their products, or using in relation to their products or services, a mark owned by another, or a commercial name or geographical indication.
4. Selling, offering for sale, trading, or possessing with the intent to sell, unlawfully, products bearing a counterfeit or imitated trademark or (…) commercial name or geographical indication or industrial design, with knowledge thereof.
5. Offering or presenting services while exploiting a registered trademark or commercial name or geographical indication or industrial design unlawfully, with knowledge thereof.”

In Qatari law, the legislator has allowed for the imposition of imprisonment or fines separately without necessitating the imposition of both penalties together in cases other than recidivism. In cases of recidivism, Article 49 provides:

“In the case of recidivism, the penalties prescribed in Articles (47) and (48) of this law shall be doubled, and the imposition of both imprisonment and fines shall be mandatory.”

1. C) regarding the closure of the establishment and confiscation of products and tools used in counterfeiting or forgery, article 50 of the same law states:

“In all cases prescribed in Articles (47), (48), and (49) of this law, the court shall order the publication of the judgment at the expense of the convicted party in one or more daily newspapers, and shall close the establishment for a period of not less than fifteen days and not exceeding six months, and shall confiscate the tools and equipment used in counterfeiting or forgery, in addition to confiscating the counterfeit or forged products, even if the judgment is one of acquittal.”

it is noted that the Qatari legislator mandates the closure of the establishment and the confiscation of counterfeit or imitated products and the tools used for that, even if the judgment issued is one of acquittal.

Third: regarding the provisions in Saudi system concerning the counterfeiting and imitation of trademarks:

Royal decree No. (M/51) was issued on 26/07/1435 AH establishing the trademark law for the gulf cooperation council states.

Article 42 of the aforementioned decree prescribes the penalties for counterfeiting and imitating trademarks as follows:

1. A) Without prejudice to any harsher penalty prescribed by any other law, any person shall be punished with imprisonment for a term of not less than one month and not exceeding three years, and a fine of not less than five thousand Saudi Riyals and not exceeding one million Saudi Riyals, or equivalent in the currencies of the Gulf States, or by one of these penalties:
2. Anyone who counterfeits a trademark registered under this law (the system), or imitates it in a manner that misleads the public, and anyone who uses a counterfeit or imitated mark with bad faith.
3. Anyone who, with bad faith, places a mark belonging to another on a good or uses it in relation to their services.
4. B) Without prejudice to any harsher penalty prescribed by any other law, anyone shall be punished with imprisonment for a term of not less than one month and not exceeding one year, and a fine of not less than one thousand Saudi Riyals and not exceeding one hundred thousand Saudi Riyals, or equivalent in the currencies of the Gulf States, or by one of these penalties:
5. Anyone who sells or offers for sale or trade, or possesses with the intent to sell, goods bearing a counterfeit or imitated mark or placed or used unlawfully with knowledge thereof, as well as anyone who offers services under this mark.

2. Anyone who uses an unregistered mark in the situations provided for in items (2) to (11) of Article (3) of this law (the system).
3. Anyone who wrongfully writes on their mark or their commercial papers or documents in a way that leads to the belief that the mark has been registered.
4. Anyone who, with bad faith, deliberately omits to place their registered trademark on the goods or services that distinguish them.
5. Anyone who possesses tools or materials with the intent to use them in counterfeiting or forging registered or famous trademarks.”

It is noted that the Saudi legislator does not require the imposition of both imprisonment and fines together, allowing for either penalty to be imposed.

Regarding recidivism article 43 of the same decree states:

“In the case of recidivism, the offender shall be punished with a penalty not exceedingly double the maximum limit of the penalty prescribed for the offense, with the closure of the commercial establishment or project for a period of not less than fifteen days and not exceeding six months, and the publication of the judgment at the expense of the offender according to the procedures specified in the executive regulation. An individual is considered a recidivist in the application of the provisions of this law (the system) if they have been sentenced for an offense provided for herein and return to committing a similar offense within three years from the date of the final judgment in the previous offense.”

Regarding precautionary and preventive measures established to protect trademarks, article 40 of the decree states:

“1. Upon infringement or to avert an imminent infringement of any of the rights established under the provisions of this law (the system), the right holder may obtain an order by petition from the competent court to take one or more appropriate precautionary measures, including the following:

1. A) A detailed description of the alleged infringement, the goods subject to that infringement, and the materials, tools, and equipment used or to be used in any of that, and the preservation of related evidence.
2. B) The seizure of the items referred to in the previous paragraph and the proceeds resulting from the alleged infringement.
3. C) Preventing the goods involved in the alleged infringement from entering the commercial channels and preventing their export, including imported goods before customs release.
4. D) Stopping the infringement or preventing its occurrence.
5. The court may require the petitioning party to provide any evidence in their possession that supports the likelihood of the infringement occurring or that the infringement is imminent, and to provide information sufficient to enable the competent authority to implement the precautionary measure to identify the concerned goods.
6. The court must decide on the petition within a period not exceeding ten days from the date of submission, except in exceptional cases as determined by it.

4. The court may, if necessary, issue the order at the request of the petitioning party without summoning the other party, if there is a likelihood that the delay in issuing the order may cause irreparable harm to the petitioner or there is a fear of the loss or destruction of evidence, and in this case, the other party must be notified of the order without delay upon its issuance, and notification may be after the execution of the order immediately if necessary.
5. If the court orders the taking of a precautionary measure without summoning the other party, the defendant may, after notification of the order, challenge it before the competent court within twenty days from the date of notification, and in this case, the court may confirm, modify, or cancel the order.
6. The court may require the petitioning party to provide an appropriate guarantee or equivalent assurance sufficient to protect the defendant and prevent abuse of rights, and the amount of the guarantee or its equivalent shall not be set at a level that would unreasonably deter the pursuit of such precautionary measures.
7. The right holder may file a lawsuit regarding the original dispute within twenty days from the date of the order to take the precautionary measure or from the date of notification of the rejection of the challenge provided for in paragraph (5) of this article, as the case may be, otherwise the order shall be canceled at the request of the defendant.”

Article 41 of the decree regarding compensation for infringement of trademark rights states:

“1. The rights holder may file a lawsuit before the competent court seeking adequate compensation for direct damages incurred due to the infringement of any of his rights established under the provisions of this law (system), including the profits earned by the defendant. The court shall determine the compensation in an amount it deems sufficient to remedy the damage, taking into account the value of the product or service that is the subject of the infringement, based on what the plaintiff stipulates regarding the retail price

or any other legitimate criterion it requests to be applied or through expert assessment.

2. The rights holder, instead of claiming compensation for damages, including the profits earned by the infringer according to the provisions of the previous paragraph, may request at any time before the case is adjudicated an appropriate compensation if it is proven that the infringement involved the use of the trademark in an intentional imitation of the product or was carried out in any other manner.
3. The competent court, when considering lawsuits related to the rights established under the provisions of this law (system), may order the following: a. Seizure of goods suspected of being infringing, along with any related materials or tools and any documentary evidence related to the infringement. b. Ordering the infringer to cease this infringement, including prohibiting the export of goods that involve infringement of any of the rights established under the provisions of this law (system) and preventing the entry of imported goods into commercial channels immediately after customs clearance. c. Obliging the infringer to provide the competent court or the rights holder with any information they possess regarding all persons or entities involved in any aspect of the infringement, including identification of everyone who participated in the production and distribution of the goods or services and specifying their distribution channels.
4. The competent court, upon the request of the rights holder, may order the destruction of goods proven to be counterfeit, except in exceptional cases, without any compensation of any kind to the defendant. It may also order without delay the destruction of materials and tools used in the manufacture or production of

counterfeit goods, without any compensation of any kind to the defendant. In exceptional cases deemed necessary by the court, it may order the disposal of such goods outside commercial channels in a manner that prevents the possibility of further infringements. Instead of destroying the goods and materials and tools used in manufacturing or producing counterfeit goods, the court may order their disposal outside commercial channels if their destruction results in unacceptable harm to public health or the environment.

5. The mere removal of a trademark that was unlawfully affixed to counterfeit goods does not constitute sufficient justification for their release into commercial channels.
6. The competent court shall assess the expenses and fees of those appointed to undertake any assignment in the case from experts and specialists in a manner that corresponds to the size and nature of the assignment entrusted to them and does not unreasonably prevent resorting to such procedures.”