Patent Rights Transfer in the UAE: An In-Depth Exploration

February 19, 2024by Saniya Mariam Thomas0

Patent transfer operates in two modes: assignment and license. Through assignment, patent ownership undergoes a full transfer; a license grants specific rights to a third party without any ownership change.  

Intellectual property rights are highly valued in the United Arab Emirates (UAE). The country prioritizes the protection of such rights, especially concerning patent rights transfer. This crucial process offers two main avenues: assignment and license.  By understanding the intricacies of these mechanisms, patent owners can foster innovation, preserve their inventions, and contribute to the growth and advancement of various industries within the UAE.  

The Legal Framework and Definitions  

As a member of the World Trade Organisation (WTO), the UAE adheres to the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The Ministry of Economy is responsible for overseeing the registration and protection of intellectual property, and this task is carried out through the International Centre for Patent Registration (ICPR).  

Terminology 

Getting familiar with the following terms helps you understand the article with ease. Or you may skip directly to the next section. 

  • Administration: The entity within the Ministry of Economy entrusted with enforcing Federal Law No. 11/2021.   
  • ICPR: International Centre for Patent Registration.  
  • Industrial Ownership: Refers to rights associated with patents, utility certificates, designs, integrated circuits, and undisclosed information.   
  • Industrial Property Circular: Published by the Ministry, this circular covers all the requirements stipulated in Federal Law No. 11/2021 or Cabinet Decision No. 6/2022.   
  • Letters Patent: A protection deed issued by the administration to safeguard an invention.   
  • Ministry: Ministry of Economy.   
  • Patent Office: The UAE Patent Office.   
  • State: United Arab Emirates.   
  • TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights.   

Types of Patent Rights Transfer  

  1. Assignments:  

An assignment involves the transfer of patent ownership from the inventor to the assignee. While compensation for the assignment is not mandatory, certain requirements must be fulfilled for the assignment to be valid:  

A written document must clearly specify the patent or patent application being transferred. The assignment should be signed by both the assignor and the assignee in the presence of a competent official or notary public. The assignment must be duly registered with the Patent Office, accompanied by the prescribed fees. The Ministry retains the right to decline registration if the assignment is deemed to abuse an industrial property right or adversely affect commercial competition.  

Unregistered assignments are valid only between the parties involved and do not have any effect on third parties. To avoid any ambiguity, it is highly recommended to explicitly mention the transferred rights in accordance with Article 19 of Federal Law No. 11/2021.  

The challenge of lapsing patent applications  

One key challenge that currently exists in the UAE is related to assignments before the issuance of letters patent. Notaries in the country often refuse to acknowledge such rights, as the Patent Office only accepts notarized assignments. This situation can lead to lapsing patent applications before they undergo examination or receive grant.  

Article 23 of Federal Law No. 11/2021 addresses the unilateral disposition or assignment by one joint owner. However, individual granting of licenses is prohibited without joint agreement.  

2. Licenses:  

Unlike assignments, licenses do not involve the transfer of patent ownership. Instead, they grant permission to a third party (the licensee) to undertake certain acts that would otherwise be prohibited. Federal Law No. 11/2021 provides for two types of licenses:  

Compulsory licenses: These are issued when a third party forces the patent owner to grant the license.  

Contractual licenses: These are voluntarily granted by the patent owner, often in exchange for compensation.  

2a. Compulsory License:  

To obtain a compulsory license, the intended licensee must follow the procedures outlined in Article 29 of Federal Law No. 11/2021, which involves filing an application before the court. If an agreement cannot be reached, the court may examine the application and make a decision regarding the license, its scope, and the compensation to be provided to the patent owner.  

Certain conditions must be met by the applicant, including demonstrating that the invention has not been used for three years and making reasonable efforts to obtain a license at a fair price. Compulsory licenses are typically non-exclusive and non-sublicensable, although certain exceptions may apply.  

2b. Contractual License:

Article 49 of Federal Law No. 11/2021 empowers patent owners to grant contractual licenses to any natural or legal person under mutually agreed-upon terms. Such licenses must be documented in writing, signed by both parties, and limited to the UAE jurisdiction where the patent is registered.  

These contractual licenses can be non-exclusive, exclusive, or sole and exclusive, depending on the agreement between the parties. Sub-licensing to third parties is permissible, subject to certain conditions as per Article 53 of Federal Law No. 11/2021. Additionally, Article 54 grants the administration the authority to review, deny, or cancel licenses that may contravene trade competition regulations or involve the abuse of industrial property rights.  

Promote Innovation, Safeguard Inventions 

The UAE’s legal framework for transferring patent rights provides a comprehensive set of guidelines for assignments and licenses. By utilizing these mechanisms, patent owners can actively promote innovation, safeguard their inventions, and contribute to the growth and development of various industries within the UAE. It is vital for all parties involved in patent rights transfer to fully comprehend the rules and practices governing the process to ensure equitable and efficient procedures. Moreover, staying abreast of any updates or amendments to the relevant laws and regulations will further bolster the protection and utilization of intellectual property rights in the UAE 

Disclaimer

The opinions expressed in this blog are those of the respective authors. ATB Legal does not endorse these opinions. While we make every effort to ensure the factual accuracy of the information provided in our blogs, inaccuracies may occur due to changes in the legislative landscape or human errors. It is important to note that ATB Legal does not assume any responsibility for actions taken based on the information presented in these blogs. We strongly recommend verifying information from official sources and consulting with professional advisors to ensure its accuracy and relevance to your specific circumstances.

About ATB Legal

ATB Legal is a full-service legal consultancy in the UAE providing services in dispute resolution (DIFC Courts, ADGM Courts, mainland litigation management and Arbitrations), corporate and commercial matters, IP, business set up and UAE taxation. We also have a personal law department providing advice on marriage, divorce and wills & estate planning for expats.

Please feel free to reach out to us at office@atblegal.com for a non-obligatory initial consultation.

by Saniya Mariam Thomas

Saniya is a legal consultant at ATB Legal. She is a law graduate from Calicut University, earned her master’s from Christ University, Bangalore, and is enrolled with the Bar Council of Kerala. She has earned several prizes in national and international moot court competitions.

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