Small businesses likely to suffer as Gulf countries raise intellectual property fees

In Kuwait, above, the official cost for registering a trademark is due to increase by 6,244 per cent this year from the equivalent of US$25 to $1,586, lawyers estimate. Gustavo Ferrari / AP Photo

Small businesses are likely to suffer as Arabian Gulf countries ramp up intellectual property fees by as much as 6,200 per cent, lawyers say.

Lawyers complain that fees for patent, trademark, design and copyright matters have become some of the most expensive in the world after recent price increases in the UAE, Kuwait, Saudi Arabia and Bahrain.

Trademark legislation is used around the world to protect businesses from copycat traders who may seek to steal ideas and images.

In Kuwait, the official cost for registering a trademark is due to increase by 6,244 per cent this year from the equivalent of US$25 to $1,586, lawyers estimate. Last month, the Bahraini government announced that it had pushed up registration fees by 728 per cent from $160 to $1,325.

And last year, Saudi Arabia increased its fees for renewing trademarks from $80 to $800.

In the UAE, the equivalent fee had gone up last year by 99.9 per cent to $2,725, according to an announcement in the official gazette in March last year.

By contrast, the cost in the UK to apply to register a trademark stands at about $293 and in the United States it costs between $275 and $325.

None of the Gulf governments has apparently given reasons for the fee increases but lawyers point out that the hike could be caused by attempts to increase revenue following the global oil price slump coinciding with a move by GCC countries to unify their trademark laws and move services online.

“These price hikes are not likely to hit the big multinational companies operating in the region, which will be able to absorb the costs and will most likely put it down to part of the cost of business for operating in the region,” said Jon Parker, a partner at Gowling WLG, based in Dubai.

“But for small businesses and start-ups operating in the region it is a much bigger issue. These businesses have a limited budget and, given the dramatic price increases, some may be forced to decide which areas of their intellectual property they will move to protect leaving them open to having their ideas and brands used by third parties.”

Hady Khawand, a partner at the intellectual property firm Saba & Co and a board member of the UAE-based Brand Owners’ Protection Group, agrees.

“It is true that with such high cost, many SMEs will surely think twice before they invest in the protection of their intellectual property rights,” he said. “Would this lead to damages to [their] rights and their potential to grow? Would that affect the economy in the GCC in any negative way? The answers are yet to be seen.”

He said that it was also too early to assess the effect of the increase in fees on the volume of IP applications in the GCC.

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