UAE – Regime to encourage innovation through new Patent law

One of the important aspects of intellectual property law is regulating the regime of prosecution and protection of Patents, and Industrial Designs. This encourages innovation thus leading to advancement in technology.

In October 2014, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister, Minister of Defence for the United Arab Emirates and Ruler of Dubai, launched the “National Innovation Strategy”, with one main objective which was to position UAE among the top innovative countries in the world by 2021.

2015 was declared The Year of Innovation, and the UAE Cabinet issued guidelines to all federal authorities to coordinate and revise government policies, encouraging the innovation environment and aiming to position the UAE as global leader in Innovation. As a result, His Highness Sheikh Mohammed Bin Rashid announced & declared the “UAE Innovation Week” during the period of November 22^nd to 28^th of the same year.

In 2018, this successful event was followed by an official announcement wherein an entire month was declared as “Innovation Month”, a national occasion for celebrating innovation across the country.

In 2019, UAE was ranked among the most resilient countries against impact of the pandemic (Covid-19) and this was a result of a series of significant achievements under the umbrella of “Innovation” across different areas, such as education introducing technology in schools, healthcare sector, establishing research and technology institutes to boost innovation, among which are Mohamed Bin Zayed Artificial Intelligence University and Mohammed Bin Rashid Academy of Scientists.

As a result of such persistent efforts of the Federal Government to encourage innovation, the UAE has been ranked 31^st among 132 economies featured in the Global Innovation Index (GII) report 2022, published by the World Intellectual Property Organization (WIPO). It has maintained its top position amongst all the Arab countries for seven years in a row.

New Patent law 

As a step in the direction to encourage innovation, last year in 2021, UAE government issued Federal Decree Law No. (11) of 2021 regarding protection and grant of Patents, Industrial Designs, and Utility certificates which was an improvement over an earlier law. The Ministry of Economy shall now receive international applications in accordance with the provisions of Patent Cooperation Treaty (PCT) of which UAE has been a member State. Some of the salient features of the aforementioned law are outlined below:

1. 1. Article 5 lays down conditions of Patent eligibility which is that Invention should be novel resulting either from innovative idea or innovative improvement or modification and even addition related to previously patented invention and is susceptible to industrial application i.e., it can be manufactured or used in any field.
   2. Any disclosure of the invention by an inventor or third party shall not be taken into consideration if such disclosure takes place during the previous 12 months before the date of filing of the Patent application.
   3. Utility certificate shall be granted to any invention/s that does not contain any inventive step. However, this can be converted to Patent application and vice versa on the request of the inventors, owners, registration agents, permitted assignees.
   4. If an invention is created as part of an employment agreement, the right in such an invention belongs to the Employer unless it is agreed otherwise. Any Patent application submitted by the employee within 2 years after the termination of the employment shall be deemed to be submitted during employment.
   5. The period of priority under shall be 12 months starting from the date of first filing. The application should clearly mention that date and filing number of the previous filing and the country in which it has been filed.
   6. The Ministry shall examine the application for Patent or Utility certificate and if need be, seek additional submissions as it deems necessary. The time period for additional submissions shall be 90 days from the date of notifying the applicant. Upon approval, the Ministry shall publish the approved application in the Industrial Property Bulletin.
   7. Patent applications or utility certificate applications containing more than one invention may be split accordingly. These split applications would be deemed to have been submitted on the same date as of the first patent application/utility certificate application.
   8. Further, the new law now provides for examination of certain urgent applications of patent or utility certificate before other applications regardless of the application submission dates or examination application dates, provided that this shall not cause any prejudice to priority applications.
   9. Validity of Patents under new regime is for 20 years and for Utility certificates it is 10 years starting from the date of application submission. The Applicant would be required to pay annual fees during the course of entire protection period.
   10. Assignment of Patent or Utility Certificate has to be in writing, signed by all the contracting parties before the Ministry, authenticated by Notary public or duly attested in the State. The Ministry may not register the assignment if it may lead to the abuse of any of the industrial property rights or compromise commercial competition etc. Also, any joint holder of patent or utility certificate can assign his share in it provided it does not harm other joint holder/s.
   11. The law provides for certain rights which are not conferred by grant of Patent or Utility certificate such as:
       1. 1. Activities relating to education and scientific research
          2. Use of subject matter for transportation means being introduced to the State on temporary or irregular basis
          3. Combining more than one medication for the purpose of medical treatment by a licensed pharmacist
   12. The law provides for provisions relating to mandatory licenses as per Article 25. It provides that if the holder does not use or has made insufficient use of the patent or utility during the following 3 years post grant, any interested party may apply to the court in the form of a lawsuit for a mandatory license. Such license shall be non-exclusive, and it should be intended to meet the needs of the local market. The holder shall be entitled to a fair compensation.
   13. Any transfers of such licenses to third party are possible if the ownership of the establishment that uses the invention is also transferred and the court approves such transfer of license.
   14. Industrial Designs are accorded protection provided they are recorded in the register. The law now provides for filing an application covering multiple Industrial Designs though these should belong to the same category of international classification.
   15. Under UAE law, Industrial Design must be novel and not disclosed to the public by publication, use, or any other method prior to filing its application for registration. However, any disclosure made within 12 months prior to the date of application, shall not be deemed as having been disclosed to the public. In other words, novelty shall still be retained. Further, the priority claim for Industrial Designs shall be six months from the date of first filing.
   16. The protection of Industrial Designs shall be valid for a period of 20 years starting from the date of protection application submission and the Applicant is required to pay annual fees throughout the whole applicable duration of protection.
   17. Penalties stipulated under law for imitating an invention or manufacturing process which granted patent rights shall include imprisonment and a fine from a minimum of AED 100,000 (approx. USD 27,000) to 1,000,000 (approx. USD 270,000) or one of these two penalties.

   In conclusion

   The new Patent law does provide the needed clarity on the prosecution and protection of Patents and related IPs which will certainly encourage and give impetus to innovation attracting more foreign investments. According to one data, in the year 2021 the Ministry of Economy received 2,428 patent applications which is up from 1,917 applications in 2020. The main sectors covered included machinery, construction, chemical engineering, pharmaceuticals, biotechnology, electricity, metals, information and communication technology. The total number of patent applications tripled over the past decade to reach 24,511 in 2020, up from 8,028 in 2010. Thus, the reforms in Patent laws have come at an opportune time when it is expected that there will be growth in the number of Patent applications in the coming years.

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   If you have any questions about this or any other query related to intellectual property, commercial laws and digital assets laws, please get in touch with the author Rajiv Suri directly on [email protected].

   Rajiv Suri is a senior associate in the intellectual property and corporate and commercial team at Alsuwaidi & Company. Rajiv advises clients on strategies involving a wide range of intellectual property and commercial laws including contractual agreements and digital assets. He has been involved in managing corporate portfolios across various industries.