Recording an assignment or other transactions, such as mergers, before the UAE Trade Mark Office (‘TMO’) shall involve specific legal requirements and formalities, including submitting a legalised Deed of Assignment (‘DOA’) signed by both the assignor and assignee and/or a merger certificate. However, many trade mark owners faced some complications in presenting such documents which could arise from companies restructuring, insolvency and/or voluntarily winding up of legal entities. Therefore, an assignor may no longer exist or have any presence in business due to insolvency, bankruptcy and/or for any other regulatory reasons.
In this article, we try to review the details of the transfer of trade mark ownership requirements and some possible solutions that could be explored. Whilst this circular is not intended to give advice or opinion, it is prepared to raise awareness and attention to the AIPPI UAE members on some important formalities and invite them to participate and give some thoughts or advocate for alternative solutions in light of the current legislative landscape.
It is clear that Article 15/2 of Cabinet Resolution No. (57) of 2022, under the Executive Regulations of Federal Decree-Law No. (36) of 2021 on Trade Marks, outlines the conditions for transferring trade mark ownership:
“The ownership shall be transferred pursuant to a sales, assignment or merger contracts or based upon a decision from the court…..”. Accordingly, to record an assignment, the TMO requires an applicant to present any of the below documents besides a duly legalized power of attorney to the representative, which is not the subject of this circular:
1. A legalised DOA, or
2. A Merger Certificate, or
3. A Sale Agreement
These documents must be signed by both the assignor and assignee and notarized (if signed in the UAE), or legalised up to the UAE Consulate if signed outside the UAE, to meet the admissibility and/or enforceability standards.
Challenges in situations of Insolvency, Bankruptcy or Dissolving the Assignor legal entity
When the assignor is no longer operational because of being winded up, declared bankruptcy or for any reason, the ability to present a document that meets the TMO's requirements can be a real challenge in practice. The Assignment of rights or sale agreements is critical and are handled with great scrutiny as they involve the complete transfer of ownership rights. Therefore, it is essential to carefully evaluate and explore feasible alternative options to address this issue effectively and balance those out with the TMO approval.
While addressing the issue, we found some possible options that could help parties to record the assignment, but they are all subject to TMO's approval and discretion to accept. Each of the options below has its own set of advantages and risks to consider. Whilst those are only based on our understanding of the practice, they should not be considered as the only alternatives and members are urged to share their views on any additional suggestions from their understanding of the laws and/or based on their experiences.
a. Court orders:
Obtaining a court decision confirming the ownership transfer provides a legally binding alternative to a signed DOA or merger certificate. While the process may be time-consuming, it is generally manageable and should be acceptable to the TMO, as indicated in the referenced article.
b. Bankruptcy trustee documentation:
If a bankruptcy trustee is managing the assignor's assets, their authorization could be used to validate the transfer and sign the DOA. This approach is likely to be acceptable to the TMO, provided that supporting documentation confirming the trustee's authorization is attached to the agreement.
c. Delegation through a special Power of Attorney:
If the assignor company has been liquidated or gone bankrupt and an authorized signatory can still be located to execute a legalized document, they could issue a special power of attorney (‘POA’) to a local representative or agent to advance the formalities. This would authorize the representative to sign the DOA on their behalf and complete the assignment process. This should be carefully considered and only to complete formalities of what was assigned during the winding down of the legal entity and not to act on transfer of rights after the liquidation of an entity.
This could provide a practical and efficient way to fulfill the signing requirement without prolonged delays. The TMO however may request additional documentation to verify the validity of the POA and ensure that the signatory has the legal authority to delegate such rights.
d. Legalised Affidavit:
One of the alternative approaches is to execute a legalised affidavit confirming the details of the assignment, the assignor’s status and the challenges in obtaining their signature. The affidavit, signed solely by the assignee, would include a copy of the electronically signed agreement as supporting evidence, may or may not work but it could show to the TMO some substances to request the transfer of rights.
This affidavit would serve as a declaration that the assignor is no longer operational due to bankruptcy and that the affidavit has been executed to facilitate the recordal of the assignment. Ideally, this affidavit should be signed by a representative of the assignor entity. If it is signed only on behalf of the assignee, it is advisable to consult with the TMO regarding the circumstances to confirm its approval.
This option offers the benefit of reducing delays linked to court proceedings or the need for additional documentation to finalize the transfer, making it a practical solution when other alternatives are not viable. However, as this approach remains untested and involves certain risks, its acceptance by the TMO is uncertain and may not be approved. It is recommended to engage in a detailed discussion with the TMO, when possible, to clarify their stance on this matter as the TMO is always open to discussions and information that facilitate and support applicants effectively.
Final Thoughts
Navigating the complexities of trade mark assignment recordals in cases involving absent assignors or strict notarial requirements, requires both strategic planning and adaptability but also some works to advocate for a better practice based on the international trade mark offices latest practice. By exploring workable solutions and ensuring compliance with UAE regulations, businesses can safeguard their trade mark rights and maintain seamless operations. Also, the options discussed allow you to consider presenting the TMO with authenticated documents to fulfil the Law and practice.
The information in this article is for general informational purposes only and should not be considered as professional or legal advice. Please get in touch with us should you like to discuss further.
