Commercial, corporate and M&A

In the modern economy, the value of companies is no longer measured solely by their physical assets. Intangible assets, such as trademarks, now represent a significant portion of a company’s real capital.

A trademark is not merely a name or a logo—it is a strategic identity that reflects the company’s values and mission, directly influencing consumer decisions and purchasing behavior. With this growing importance, the legal framework for trademark protection has become essential to preserving the value of these assets and ensuring their continuity.

A trademark is considered one of the most important intangible assets a company can possess, as it contributes to building trust, differentiation, and achieving sustainable profits. However, this value can be negatively impacted if the trademark is not legally protected, exposing it to imitation or infringement by competitors. This is where laws and regulations governing trademark registration and protection come into play.

In the Kingdom, trademarks are subject to the Trademark Law issued under Royal Decree No. (M/21) of the year 1423 AH, which provides legal protection for registered trademarks and grants the trademark owner the exclusive right to use it and to prevent others from copying or infringing upon it.

Conditions for Trademark Registration According to Saudi Law:

• Distinctiveness: Trademarks that lack a distinctive character or are used solely to describe the product cannot be registered.
• Compliance with Public Order and Morality: The trademark must not conflict with religious or cultural values.
• No Similarity or Identity with Previously Registered Marks: To prevent confusion between different trademarks.

Rights of the Registered Trademark Owner:

• Exclusive Right to Use the Trademark on the products or services covered by the registration.
• Right to Take Legal Action against any infringement or unauthorized use of the trademark.
• Ability to License the Trademark to others for financial compensation, increasing its value as an investment asset.

The Strategic Value of the Trademark from a Legal Perspective:

• Protection from Imitation and Unfair Competition: A registered trademark protects the company from unfair competition, as legal action can be taken against any entity attempting to exploit the name or logo unlawfully.
• Increase in the Company’s Market Value: Companies with registered trademarks can evaluate their trademark during mergers or acquisitions, making it a valuable financial asset.
• Trademark as an Investment Asset: Some companies rely on licensing their trademarks to distributors or agents, generating additional income without the need for direct production.

Modern Trends in Building and Legally Protecting Trademarks:

With the expansion of e-commerce, registering trademarks at both the local and international levels has become essential—particularly through the Madrid System for the International Registration of Trademarks, which allows companies to protect their trademarks in over 100 countries through a single registration application.

Legal disputes over trademarks have also increased, making arbitration and mediation important methods for resolving conflicts between companies more quickly and efficiently than traditional litigation.

The Impact of Trademarks on Business in the Kingdom of Saudi Arabia:

Saudi Arabia has witnessed significant transformations in its business environment, where trademarks have become a fundamental factor in enhancing competitiveness and attracting investments. With the legislative developments supporting intellectual property protection, companies are now required to safeguard and develop their trademarks to ensure growth and sustainability.

The **Saudi Authority for Intellectual Property (SAIP)** is the official body responsible for regulating and protecting intellectual property rights in the Kingdom, including trademarks. The Authority plays a pivotal role in trademark registration, strengthening legal protection, and resolving disputes that may arise from trademark infringement. It also works to raise awareness of the importance of intellectual property and its role in supporting the national economy and fostering a fair and sustainable business environment.

One of the most important functions of the Authority is **trademark registration**. SAIP provides an electronic platform through which companies and individuals can submit trademark registration applications and follow up on related legal procedures. Registration grants the owner exclusive rights to use the trademark and prevents any unauthorized use. This registration is a fundamental step in protecting companies from infringement or imitation by competitors.

In addition, the Authority is responsible for **handling legal disputes related to trademark infringement**. When a party uses a trademark owned by another without authorization, or when imitation leads to confusion between trademarks, the registered trademark owner may file a complaint with SAIP to initiate the necessary legal procedures. The Authority examines such cases and issues appropriate decisions—such as imposing fines on violators, ordering the suspension of the infringing trademark’s use, and other measures.

Beyond its legal role, the Authority also works to **raise public awareness** about the importance of trademark protection. It conducts educational campaigns targeting entrepreneurs, companies, and individuals to highlight the benefits of registering trademarks, the risks of not doing so, and the legal consequences of trademark infringement. SAIP also collaborates with relevant authorities to enforce intellectual property laws and ensure the Saudi market complies with international standards in this field.

Through these efforts, the **Saudi Authority for Intellectual Property contributes to establishing a fair business environment** that protects trademark owners’ rights and promotes innovation and investment. This, in turn, supports national economic development and attracts both local and foreign investments.

Finally, a trademark is not merely a marketing element—it is a **strategic and legal asset** that defines a company’s long-term success. Thus, the success of a trademark goes beyond its marketing development; it must be backed by legal measures that protect it from infringement and unfair competition. Companies that invest in developing and protecting their trademarks achieve sustainable growth, outperform competitors, and maintain a loyal customer base—making the trademark one of the most valuable assets worthy of ongoing attention and investment.