This article discusses a trade mark infringement case to illustrate several practical issues that are likely to be of interest to anyone involved in, or contemplating, trade mark action in Saudi Arabia. Although the case raises interesting issues of substantive law, these are better left for discussion when the final outcome of the case is known – the appeal decision is yet to be given.
The case involves a product that had been on sale in Saudi for many years (some decades) in various packaging variants (the original product). Until a couple of years before the case began, it had been the market leader in its sector. Then, its market share collapsed. Shortly before this collapse, but quite unrelated to it, a third-party product had been launched, using a similar product packaging, but different brand name (the defendant’s product). The packaging of the original product was protected by a trade mark registration.
FILING THE CASE
The owner of the original product became aware of the defendant’s product in 2003. In 2004/05, it arranged for a cease and desist letter to be sent and, when there was no response, an administrative complaint to be filed. No action was taken by the administrative authorities.
In early 2007 the original product owner decided to seek advice in relation to the institution of civil proceedings. Almost 12 months later – after detailed investigation, evidence gathering, preparation of witness statements, and execution, notarisation, legalisation and translation of relevant documents – a claim was filed. There was no obvious delay or dragging of heels. There were simply many issues to be considered and steps to be taken to ensure that the originating claim was properly expressed.
Although it is possible to file evidence and refine arguments during proceedings, anything the court views as a change in position can be damaging. It is important to get the claim right at the outset. In this case, the issue of damages and the ability to substantiate loss was particularly important; considerable time was spent on this aspect.
PROCEEDINGS: START TO FIRST INSTANCE DECISION
Proceedings in civil law jurisdictions do involve a certain amount of ‘memorandum ping pong’, and in few places more so than the Middle East and North Africa region. The timeline in this case was as follows:
January 2008: Claimant files fully argued claims in a memorandum supported by a notarised and legalised witness statement with exhibits, all translated into Arabic.
April 2008: First hearing. Defendant submits a memorandum in defence.
July 2008: Second hearing. Claimant submits reply to defence.
October 2008: Third hearing. Defendant submits response to reply.
January 2009: Fourth hearing. Claimant submits reply.
April 2009: Fifth hearing. Defendant submits reply. Claimant notifies court that no further arguments will be submitted. Court gives the claimant until June 2009 to submit additional evidence to support its damages claim.
June 2009: Sixth hearing. All judges involved in hearing the case so far are replaced by new judges. Next hearing set for July 2009.
July 2009: Seventh hearing. Judges require claimant’s lawyers to submit a notarised and legalised engagement letter at a hearing in three days’ time to establish their right to claim lawyers’ fees.
July 2009: Eighth hearing. Engagement letter submitted. Judges adjourn the matter for five days to prepare decision.
July 2009: Ninth hearing. Judgment given in favour of the claimant.
The progress of the case raises several issues that are worthy of comment:
- The originating memorandum is, in most cases, served by the court on the defendant. In exceptional cases, the court might not serve the originating memorandum on the defendant until the first hearing. It will seem unusual to many to have to attend a hearing not knowing what the case involves.
- This case took 18 months from filing to first instance decision – many cases will take longer.
- No hearings were postponed due to the non-attendance of either party, or simply to one party requesting an adjournment, both of which are a common delaying tactic in the region.
- The use of terminology such as ‘defence’, ‘reply’ and so on is useful, but slightly misleading. The documents are principally memoranda in which one party argues its case and counters the other party’s case.
- The rules of procedure in Saudi Arabia provide that the defendant always has the right to respond to a memorandum submitted by the claimant. Proceedings are, therefore, largely in the hands of the claimant who can call an end to the exchange of memoranda or keep them going for some time. The claimant can simply state in writing that there is nothing to add and the case will be closed and referred for a decision.
- There are no hearings for the review of evidence. There is no need for the submission of concluding arguments.
- Costs are not awarded on the basis of costs incurred. There are no court fees. Any award of costs will not cover even a small part of the costs of running a sensibly managed case.
Evidence in proceedings in Saudi is simply introduced by the party seeking to rely on it. There is no discovery process nor a requirement to disclose all relevant evidence held. Generally, evidence is simply attached to a memorandum submitted by a party.
Perhaps as a consequence of this procedure, courts are generally sceptical of evidence adduced by a party in support of its own case. In the case being used here as an example, efforts were made to increase the weight likely to be given to evidence by including it in a witness statement sworn before a notary and legalised. Another way to ensure that evidence is given appropriate weight is to provide the original documentation.
For example, to establish that a mark is registered in another country it would be possible to submit a notarised and legalised witness statement confirming that the mark is registered and attaching a copy of the registration certificate. Another way would be to seek a certified copy from the relevant registry and have that legalised. It is possible that the court would give more weight to a certified copy issued by a government department than to a copy submitted by a party.
It is also worth mentioning that all documents and evidence must be submitted in Arabic. Any document in another language will need to be translated by a suitably licensed translator. The time needed for translations must be factored into many deadlines.
As damages in Saudi Arabia are awarded on the basis of actual provable damage, no account will be taken of possible future losses. The burden of proof is high: the best possible independent evidence of any loss must be submitted, otherwise the claim may fail.
The decision was given at the ninth hearing in July 2009, with a written decision being made available at a subsequent hearing a month later in August 2009. The court ordered that the defendant’s products be confiscated and destroyed, and that the defendant refrain from using any packaging similar to that of the original product.
WHAT HAS HAPPENED SINCE
The deadline for filing an appeal was September 2009. At the end of September, the claimant’s lawyers asked the court if an appeal had been filed. The court confirmed that it had, and that the claimant was not a party to the proceedings, and, therefore, not entitled to see a copy of the appeal documents.
Where the claimant is not a party in the appeal, it will not normally receive any notification from the court that an appeal has been filed. It will seem unusual to many that an appeal can be filed in a case and one of the parties not be notified.
A decision in the appeal is awaited.
WHAT MIGHT HAPPEN IN THE FUTURE?
The Court of Appeal will either confirm the judgment of the Court of First Instance or transfer the case to the Court of First Instance to be reviewed again.
If the Court of Appeal confirms the decision, then the decision will become automatically final and binding, and the Court will serve the decision on both parties. Enforcement of the decision is then made by the successful party filing an application with the Ministry of Commerce and Industry to enforce the judgment.
If the Court of Appeal transfers the case back to the Court of First Instance to be reviewed again, it will serve the decision on the parties along with a copy of the memorandum of appeal and notification of the date of the first re-hearing before the Court of First Instance. The claimant will then have the opportunity to file a memorandum in response to the defendant’s memorandum of appeal and to submit it during the first hearing.
In many ways, proceedings in Saudi Arabia are similar to proceedings in other countries, but there are some practical procedural issues of which potential litigants should be aware.