Trademark holders should therefore ensure that agreements (including summary agreements and declarations of the authorities) established for registration purposes are carefully reviewed to avoid future difficulties. Trademark holders should also not overlook the requirements and potential benefits of registering trademark licences in Saudi Arabia. Earlier this year, the Saudi Ministry of Trade and Industry (the Ministry) reminded importers and distributors of products in Saudi Arabia (known as commercial agents) that they must register their agreements. The ministry also provided for an additional delay until September 22, 2015. Officers who did not register their agreements on that date should expect fines. The law and regulations do not require that certain restrictive agreements be established in the agreement. However, there are minimum requirements for a valid registration agreement, which means that many commercial agents who have not yet registered their agreements with the department are taking steps to ensure compliance. If the relationship between the trademark holder and the sales agent is not yet properly documented, this means that the sales agent can contact the trademark holder to correct the position. Specifically, the commercial agent may attempt to enter into a trade agency agreement on the importation, marketing and sale of branded goods in Saudi Arabia. In addition, the commercial officer may attempt to enter into a summary agreement (or a short letter of administration) that must be registered with the department (which contains only relatively basic provisions).
In addition to the obligation to register agency agreements under the Agency Act, the Saudi Trademark Act (such as Royal Decree No. M/21 of 28.05.1423H) (the Trademark Act) requires trademark licenses from the Saudi Trademark Office. 1. The agreement must be concluded with the original manufacturer of the products or the holder of services that are submitted to the Agency or its representative in its country of origin, directly and without intermediaries outside its country of origin, for registration; and the Saudi Arabian Commercial Agency (as per royal decree no. M/5 of 11.06.1389H, in accordance with 25.08.1969) and its enforcement provisions (the Law on Agencies) oblige all commercial agents to register their agreements with the ministry. The definition of a sales agent within the meaning of the law is broad and covers representatives, distributors and franchisees. The regulations apply to “any person who enters into commercial activity contracts with a manufacturer or his representative in his or her country, whether as a representative or distributor in any form of agencies or means of distribution of profits, commissions or organizations of any kind, including shipping, aviation or country agencies and any other agency that would be decided by the Minister of Commerce and Industry.”