Our clients, the trademark owner and the transferee of the mark, were represented by the Emirati Advocate Mrs. Awatif Al Khouri of Awatif Mohammed Shoqi Advocates and Legal Consultancy, who personally led the dispute that arose from a long-standing commercial licensing arrangement under which our client, as the registered owner of two trademarks, granted a related company the right to use those marks in its commercial activities. Under that arrangement, the owner of two trademarks permitted a related company to use those marks in its business activities. The arrangement continued for more than two decades and was part of a broader family-affiliated business structure that comprised several companies and individual heirs following the passing of the family patriarch.
The dispute came to a head when our client formally transferred the trademarks to a new holder in the family. After that transfer, a formal demand was made that the licensee cease all use of the marks. The licensee and its affiliates initiated proceedings before the Dubai Court of First Instance, challenging the validity of the transfer and asserting exclusive and enforceable rights to continue using the trademarks. Through Awatif Mohammed Shoqi Advocates and Legal Consultancy, our clients successfully defended those claims in full and counterclaimed for termination of the licensing arrangement on the basis that the licensee had never paid the agreed consideration for the use of the marks during the entire life of the arrangement.
Court of First Instance
The Court appointed an expert to examine the licensing arrangement, both in terms of its nature and its effect. The expert said that the agreement didn’t deprive the trademark owner of the right to use the marks or transfer the ownership to someone else. He also said that the licensee couldn’t use the license against third parties because it hadn’t been registered with the relevant authority, and further stated that no payment had been made for the agreed-upon consideration during the life of the agreement.
On the basis of those findings, the court ruled to order the termination of the licensing agreement and directed the licensee to pay our clients the outstanding sums due, together with expenses and legal fees, and also ordered the removal of the trademark from the relevant commercial licenses, physical signage, and digital advertising channels.
Conclusion
This matter illustrates several important principles that arise in trademark licensing disputes before the UAE courts.
The outcome of this case also demonstrates the importance of proactive case management during proceedings. Through the diligent efforts of Mrs. Awatif Al Khouri of Awatif Mohammed Shoqi Advocates and legal Consultancy, our clients secured a successful termination of the licensing agreement and the removal of the trademark from the relevant commercial licenses, physical signage, and digital advertising channels.
