The World Health Organization estimates that 1 in 10 medical products (mainly antibiotics and antimalarials) in low-to middle-income countries is either substandard or falsified, causing hundreds of thousands of deaths each year and costing untold millions in further care due to failure of treatment. This article examines the legislative framework for enforcing trade mark rights against counterfeiters and infringers in the UAE.
To combat the fight against substandard or falsified pharmaceuticals, the UAE has enacted two important pieces of legislation in the last few years that enhance the protection afforded to the trade dress or get up of pharmaceutical products, namely the Anti-Commercial Fraud Law and the new Pharmaceuticals Law. Both laws contain specific criminal offences relating to the counterfeiting/falsification of pharmaceutical products which significantly increase the current counterfeiting penalties for forging or imitating trade marks as found in the current Trade Marks Law.
Trade Marks Law – Federal Law No.37 of 1992 (as amended)
The UAE Trademark Law contains no express causes of action for what is usually referred to as ‘trade mark infringement’ in other jurisdictions. Rather, Articles 37 and 38 set out criminal offences focused on counterfeiting and imitating registered trade marks. The wording of these offences can make it difficult to bring actions against anything other than direct counterfeit/imitation trade marks and, as a result, it has often been considered difficult to take enforcement action in cases that involve conceptual similarity, trade dress, get-up, look-a-likes, or unregistered rights in general.
While the Trade Marks Law does provide for the registration of certain non-traditional trade marks, (such as three-dimensional shapes of drugs or the distinctive shape of an inhaler), in the absence of an identical or near identical trade mark registration, taking enforcement action on the basis of unregistered rights has always proven to be very difficult. In addition, the penalties available under the Trade Marks Law, even for wilful counterfeiters are reasonably low – with fines starting at AED 5,000 (approx. USD 1,360).
The penalties available for the counterfeiting/imitation offences (laid out in Articles 37 and 38 of the Trade Marks Law) are:
- an unspecified term of imprisonment;
- a fine of at least AED 5,000 (approx. USD 1,360);
- confiscation and destruction of any infringing goods; and/or
- closure of the infringing business for up to 6 months (applicable only to repeat offenders).
Anti-Commercial Fraud Law – Federal Law No.19 of 2016
In 2016, the UAE promulgated the new Anti-Commercial Fraud Law (repealing and replacing the 1979 law). The Anti-Commercial Fraud Law makes it a crime to commit (or attempt to commit) commercial fraud, which includes “the import, export, re-export, manufacturing, sale, display or acquisition for the purpose of sale, storage, lease, marketing or trading, the fake, corrupt or counterfeit commodities”.
Clearly, this law is aimed at preventing fraud on a commercial scale involving fake, corrupt or counterfeit commodities. Each of these types of commodities is defined in the law, summarised as follows:
- ‘Counterfeit Commodities’ – those which bear a legally registered trade mark without authorisation;
- ‘Fake Commodities’ – those that do not conform with the rules, conditions, requirements, specifications and standards determined by the laws, regulations, rules and decisions in force in the UAE or have been unlawfully altered or promoted.
- ‘Corrupt Commodities’ – those which are damaged or no longer useable due to storage or transport.
The counterfeiting provisions relate to the unauthorised use of a legally registered trade mark. As such, the ability for a trade mark owner to enforce its rights under this law is very narrow, as any deviation in appearance from a registered trade mark would presumably fall outside the scope of this provision.
Significantly, however, if the counterfeit, fake or corrupt commodity relates to prescription drugs, the minimum fine under this law is fifty times higher than the minimum fine contained in the Trade Marks Law, providing a real deterrent to counterfeiters of prescription drugs.
The penalties under the Anti-Commercial Fraud Law are:
- a term of imprisonment (up to two years);
- a fine of between AED 250,000 (approx. USD 68,000) and AED 1 million (approx. USD 273,000);
- confiscation/destruction of the fraudulent goods; and/or
- closure of business premises for up to 6 months.
On Medical Products, Profession of Pharmacy and Pharmaceutical Institutions – Federal Law No.8 of 2019
Under Federal Law No. 8 of 2019 (the “Pharmaceuticals Law”), it is a criminal offence to counterfeit or falsify a medical product (or to trade, market, sell, display, or smuggle counterfeited or falsified medical products).
A “Falsified Product” is defined under the law as “a Medical Product which is prepared deliberately with the intention of fraud…[which includes]… acts of imitation of another Medical Product by using the same artistic shapes and colours of the packaging, container and label of the original product”.
The penalties are similar to those under the Anti Commercial Fraud Law, and include:
- a term of imprisonment;
- a fine of AED 200,000 (approx. USD 54,500) to AED 1 million (approx. USD 273,000);
- confiscation/destruction of offending materials;
- closure of the infringing facility of 3 months; and/or
- permanent withdrawal of the license to operate the infringing facility.
The Pharmaceuticals Law appears to go further than the Trade Marks Law and the Anti-Commercial Fraud Law in protecting the trade dress or get-up of medical products. Under the Trade Marks Law, a registered trade mark needs to be forged or imitated in order for a party to enforce their rights. Under the Anti-Commercial Fraud Law, the counterfeiting provisions require the unauthorised use of a registered trade mark.
However, under the Pharmaceuticals Law, the act of imitation does not appear to require the imitation of a registered trade mark, but instead only imitate the “same artistic shapes and colours of the packaging, container and label of the original product”. A trade mark registration is not expressly required under this law. While it remains to be seen how this provision will be enforced in practice, it would make sense from a public health perspective to allow counterfeiters of pharmaceutical products to be prosecuted without requiring any input from the trade mark owner (or a local licensee).
As such, the Pharmaceuticals Law appears to provide enhanced protection for (unregistered) rights in the packaging of pharmaceutical products and is, therefore, similar to the protection that would usually be provided under unfair competition laws or the tort of passing off in other jurisdictions.
That said, the protection provided under the Pharmaceuticals Law only appears to provide protection for the “packaging, container and label of the original product”, and not for the medical product contained therein. Accordingly, it is unlikely that the protection could be applied to the “little blue pill” of Viagra fame. However, in the case of an inhaler, an argument could be made that the inhaler is the ‘container’ for the medical product. Presumably, however, the packaging and label would also need to have been imitated with the intention of fraud in order for the protection to apply.
In conclusion, with the enactment of the new Anti-Commercial Fraud Law and the new Pharmaceuticals Law over the last few years, the UAE now has a robust legislative landscape that provides protection for consumers and brand owners against counterfeits (and counterfeiters of) pharmaceuticals in the UAE.