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By Mohammed AlHashem Law FirmIn the modern economy, the value of companies is no longer measured solely by their physical assets. Intangible assets, such as trademarks, now represent a significant portion of a company’s real capital.
A trademark is not merely a name or a logo—it is a strategic identity that reflects the company’s values and mission, directly influencing consumer decisions and purchasing behavior. With this growing importance, the legal framework for trademark protection has become essential to preserving the value of these assets and ensuring their continuity.
A trademark is considered one of the most important intangible assets a company can possess, as it contributes to building trust, differentiation, and achieving sustainable profits. However, this value can be negatively impacted if the trademark is not legally protected, exposing it to imitation or infringement by competitors. This is where laws and regulations governing trademark registration and protection come into play.
In the Kingdom, trademarks are subject to the Trademark Law issued under Royal Decree No. (M/21) of the year 1423 AH, which provides legal protection for registered trademarks and grants the trademark owner the exclusive right to use it and to prevent others from copying or infringing upon it.
Conditions for Trademark Registration According to Saudi Law:
- Distinctiveness: Trademarks that lack a distinctive character or are used solely to describe the product cannot be registered.
- Compliance with Public Order and Morality: The trademark must not conflict with religious or cultural values.
- No Similarity or Identity with Previously Registered Marks: To prevent confusion between different trademarks.
- Exclusive Right to Use the Trademark on the products or services covered by the registration.
- Right to Take Legal Action against any infringement or unauthorized use of the trademark.
- Ability to License the Trademark to others for financial compensation, increasing its value as an investment asset.
The Strategic Value of the Trademark from a Legal Perspective:
- Protection from Imitation and Unfair Competition: A registered trademark protects the company from unfair competition, as legal action can be taken against any entity attempting to exploit the name or logo unlawfully.
- Increase in the Company’s Market Value: Companies with registered trademarks can evaluate their trademark during mergers or acquisitions, making it a valuable financial asset.
- Trademark as an Investment Asset: Some companies rely on licensing their trademarks to distributors or agents, generating additional income without the need for direct production.