Dh1,000 saving leads to Dh1.5m intellectual property loss

Dubai: A business owner’s decision to save Dh1,000 on a contract eventually contributed to the loss of a commercial trademark and compensation of more than Dh1 million, according to UAE lawyer Ibrahim Al Hossani, who warned businesses and creators against delaying intellectual property protection.

The dispute lasted about a year and a half and went through several levels of litigation before reaching a final judgment. Al Hossani said the case involved a contract that the client had declined to sign because of its Dh1,000 cost. The case ultimately ended with the loss of the commercial mark and compensation exceeding Dh1 million, with the total loss described as around Dh1.5 million.

The lawyer said trademark registration from the beginning would have cost about Dh6,500 to Dh6,700, with additional fees possible if a registration agent was used.

Speaking on Sharjah TV’s Qadiya Lil Hiwar, which means in English “An issue for discussion” ,lawyer Ibrahim Al Hossani, a specialist in criminal law, corporate law, commercial litigation, arbitration and intellectual property, warned that many entrepreneurs mistakenly believe a commercial licence, a launched business or the public sharing of an idea automatically grants legal protection.

Al Hossani said the misconception has left some business owners facing lengthy court battles and significant financial losses, stressing that trademarks, inventions and creative works require proper legal protection to safeguard ownership rights. 

Al Hossani said one of the most common mistakes is believing that obtaining a commercial licence automatically protects a business name as a trademark.

A commercial name identifies the company, while a trademark identifies what the business presents to customers, he explained.

He cited court cases in which one party had registered a trademark while another later obtained a commercial licence using the same name. The trademark owner could challenge the commercial name, with courts ruling in some cases that the commercial name had to be cancelled or changed.

However, prior use can also be important. A business that used a mark before another party registered it may be able to establish its rights by proving its earlier use through accounts, customers, emails and other records.

Al Hossani described a case involving two rice companies.

The second company used a different name but packaged its rice in a similar colour, with a similar frame and the same style and colour of writing. The question was whether the similarities could cause an ordinary consumer to believe the products were connected.

He said courts do not simply count the differences between two marks. The key consideration is the degree of similarity and whether the ordinary consumer could confuse one product with another.

Even a difference of one letter can therefore be significant in one case but not another, depending on the circumstances, including the target consumers and geographical area.

In another case, a well-known author copied about 30 pages from another book and included them in a book of more than 200 pages without identifying the original author.

According to Al Hossani, the court ordered compensation of almost Dh300,000 to the original author.

While limited quotations with proper citation are generally permitted, he said substantial copying or commercial use of another person's work without permission can result in legal liability.

He noted that adapting a poem into a song, translating a book into another language or turning a novel into a play typically requires the author's approval, even if the original creator is credited.

Al Hossani also warned that legal liability is not limited to those who manufacture counterfeit products.

Retailers and distributors who sell counterfeit goods or pirated software can also face legal action.

He said shops that distribute copied software, install unauthorised programs on devices or sell infringing products may be held accountable under the law, even if they were not involved in creating the counterfeit item.

Trademark owners have several options when infringement occurs, including filing criminal complaints, seeking emergency court orders to stop the use of a mark, requesting product seizures and pursuing compensation through civil lawsuits.

The lawyer said an idea existing only in a person's mind is not, by itself, something that can simply be claimed as intellectual property.

He gave the example of a poem. The idea of writing a poem may exist in someone's mind, but once it is written down, it becomes an expressed work that can be documented and protected.

He also described an old practice known as “intellectual protection for the poor”, in which authors mailed a copy of their work to themselves in a sealed envelope to establish a date. The postmark served as evidence that the work existed on that date. If a dispute arose later, the envelope could be presented in court. He said courts, particularly in the United States, later stopped relying on this method after concerns that the process could be manipulated.

Another major area of dispute involves employees leaving companies with inventions, designs, ideas, customer information or other commercial assets.

Al Hossani said courts deal with cases involving former employees who attempt to use work developed during their employment.

Factors include whether the invention was created as part of the employee’s duties, whether company resources were used and whether the employee was being paid to carry out development work.

A designer employed to create logos, slogans and other material for a company, for example, cannot automatically assume that such work belongs to him personally after leaving.

Al Hossani said trademarks can include words, drawings, numbers, colours, sounds and movements, while rare cases can involve  scents.

He referred to an international dispute over the red colour used on the sole of a luxury shoe, where the issue was whether the colour in that particular position could function as a trademark.

He also noted that companies and digital platforms may use distinctive sounds or movements associated with their brands.

Al Hossani said businesses should distinguish between the main branches of intellectual property.

A trademark identifies what is presented to customers; copyright protects creative works such as books, poems and programmes; a patent concerns a technical solution or invention; and an industrial design concerns the appearance of a product.

Al Hossani urged entrepreneurs, inventors and content creators to secure protection early, warning that intellectual property disputes often arise not because ideas lack value, but because owners fail to formally protect them before others do.

If a registered trademark is being copied or used without permission, lawyer Ibrahim Al Hosani said owners can:

• File a criminal complaint with the police or Public Prosecution.

• Report the infringement to the Ministry of Economy and relevant economic authorities.

• Seek an urgent court order to stop use of the trademark and withdraw infringing products from the market.

• File a civil case seeking compensation for losses caused by the infringement.

Key point: Owners should be able to prove that they are the registered owners of the trademark.