October 5, 2014

October 5, 2014December 1, 2020

Scope of Copyright Protection

Copyright is the exclusive right that is granted to authors or artists for the literary or artistic works they create to publish, broadcast, assign or sell their work for a fixed period of time. Copyright protection is granted for the expression of ideas and not for the ideas themselves. A person having an idea regarding a flying horse communicates the idea to another who creates a sketch of the same. Here the copyright protection is given to the second person who expressed the idea of a flying horse through a sketch and not to the first person even though the original idea regarding the flying horse had emerged out of him. Also every different form of expression is granted a separate protection.

In the above mentioned example, if a third person looks at the sketch of the flying horse and writes a poem describing the same then again this third person is granted a separate copyright protection for his work. Here it is noticed that the idea of the flying horse is one but the manner and form of expressing it varies from person to person. Two people may get inspired by the same idea and express it in their own original ways. It is essential that the expression should be original.

In the above mentioned example, a fourth person getting inspired by the painting also composes a poem describing the flying horse, he is also granted copyright protection. The mode of expression of the third and the fourth person is the same and they both got inspiration for the poem from the sketch of the flying horse but their expression is original and emerges out of their own mind. Had it been that the fourth person copied the poem of the third person then it would amount to infringement and he would not be granted any copyright protection. The reason for granting protection only to expressions of ideas and not ideas themselves is that if a person is granted monopoly in ideas then it would greatly hinder the various creative expressions. Also, there is no way to record and evidence the emergence of an idea in a person and hence it would create confusion and would result in more infringements.

According to the Berne Convention all “literary and artistic works” are given copyright protection. The expression “literary and artistic works” according to article 2 of the Berne Convention includes every production in the literary, scientific and artistic domain, whatever may be the mode or form of its expression, such as books, pamphlets and other writings; lectures, addresses, sermons and other works of the same nature; dramatic or dramatic-musical works; choreographic works and entertainments in silent show; musical compositions with or without words; cinematographic works to which are assimilated works expressed by a process analogous to cinematography; works of drawing, painting, architecture, sculpture, engraving and lithography; photographic works to which are assimilated works expressed by a process analogous to photography; works of applied art; illustrations, maps, plans, sketches and three-dimensional works relative to geography, topography, architecture or science.

The Berne Convention also further provides that it is the matter of the country’s legislations to decide the exact scope and extension of the copyright protection it shall grant. The present article discusses the scope of copyright protection granted by UAE through its federal law no. 7 of 2002 (hereinafter referred to as ‘the law’).

Article 2 of the law provides for a list of works created by authors that shall enjoy copyright protection. This protection is enjoyed by authors, the assignees and licensees as the case may be. The list provided by the law goes as follows:

2. Computer programs and applications, databases, and similar works as determined by a ministerial decision.

3. Lectures, speeches, sermons, and any other works of similar nature.

4. Theatrical works, musical shows and pantomime.

5. Musical compositions with or without words.

6. Audio, visual or audiovisual works.

7. Architectural works, and engineering drawings and layouts.

8. Works of drawing in lines or colors, sculpture, engravings, lithography, printing on textiles, wood and metals, and any similar works of fine arts.

9. Photographic and analogous works.

10. Works of applied arts and plastic arts.

11. Illustrations, geographical maps, sketches, and three – dimensional works relative to geography, topography or architecture and others.

12. Derivative works (works derived from other works, the poem that was inspired from the painting in the example discussed is considered as a derivative work). The protection granted to derivative work in no way prejudices the protection to the original work.

13. Title of the works when they have innovation and creativity in them.

14. Written innovative broadcast programs.

Article 3 further defines the scope of copyright protection by specifying the works that are excluded from the protection. It provides that the protection is not granted to ideas, procedures, work methods, mathematical concepts, abstract principles and facts themselves. The copyright protection is however granted to the innovative expression of the same.

There are certain works that are meant for the use of the public and therefore allowing any monopoly rights to anyone over such works would prove to be prejudicial to the public at large. Such works are enlisted by the law as under:

2. News and reports about incidents and current events which constitute mere information releases.

3. Works that have fallen into public domain.

The information or content in such work cannot be granted copyright protection but the creative expression of the same maybe granted protection. Creative expressions may be in the form of compilation, arrangement or any such innovative method.

The copyright protection is granted from the date of the first publication of the work. There is no necessity for the work to be registered with the Ministry of economy for receiving protection. But the registration of the work has better evidentiary value and therefore recommended.

———————————————————————————————————————–
For legal advice regarding the subject, please call +971 4 4221944, or call 800-LAWYER (529937).

October 5, 2014December 1, 2020

Fair Use – An Exception to Copyright

The term ‘Fair Use’ in the context of copyright law refers to the use of material subject to copyright protection without permission or authorization from the copyright owner, in a way that would not infringe the copyright of the owner. The rationale behind the provision of the ‘Fair Use’ concept is to allow the general public to reap the benefits of the literary or artistic work in a way that would not be prejudicial to the moral and financial rights of the author. It allows the public to analyze, comment and criticize the works and helps in creating and sustaining a healthy environment for the growth of art and literature in the society.

The Berne Convention through its Article 10 permits the making of quotations from a work with appropriate details as to the source from where the quotation is taken and the author of the said quotation provided that the following conditions are met:

1. The work should have been made lawfully available to the public. This rule clarifies that only the work that is published (made available to the public through any of the modes of communication) lawfully can be subject to fair use. The word ‘lawfully’ included in the above rule stresses on the fact that fair use shall not rise from unauthorized publications.

2. The making of the quotations must be compatible with the fair practice. Every country has the right to provide the limitation regulation for the extent and purpose of the fair use of a work that is permissible. The use of a work should be compatible to the said regulations.

3. The extent of the quotations must not exceed the extent that is justified by purpose. There may be various reasons that justify fair use such as critic, comment, parody, education etc., and thus for each the extent of use varies. A parody may require much more use than a critic, and therefore it is essential to limit the use only to the extent of requirement.

The UAE provides for ‘Fair Use’ through its articles 22, 23 and 24 of the Federal law no. 7 of 2002 regarding Copyrights and Related Rights (herein after referred to as ‘the law’).

Article 22 of the law provides for the use of the copyrighted work in the following ways and circumstances provided that two conditions namely 1) the moral rights of the author are not being prejudiced and 2) the work has been lawfully published, must be satisfied:

1. The reproduction of a single copy of the work for the purpose of personal, non-profit and non-professional use. Works of fine or applied arts are an exception to this rule and they are subject to fair use only when they are exposed in a public place with the consent of the right owner or his successor. Architectural works are also an exception to the concept of Fair Use and would be subject to Fair Use only when they permanently exist in public places.

2. The Fair Use of computer programs, applications or databases is allowed only for making a single copy with the knowledge of the legitimate possessor for the following purposes:

a) For a purpose that falls within the licensed purpose.

b) For the purpose of saving or substitution in case the original copy is lost, damaged or becomes unfit for use, on a condition that the spare of extracted copy be destroyed when no more necessary.

3. Reproduction of protected works for use in judicial proceedings, or their equivalent, within the limits prescribed by such procedures, with mention of the source and the name of the author.

4. Making a single copy of the work through the non-profit archives, libraries or authentication offices, either directly or indirectly, in one of the two following instances:

a) Reproduction is made for the purpose of preserving the original copy or of substituting a lost, damaged copy or one unfit for use, if it has become impossible to obtain a substitute thereof under reasonable conditions.

b) The purpose of reproduction is the satisfaction of a request made by a physical person, to use it in a study or research provided it is done only once and on different intervals in case it was impossible to obtain a license for reproduction pursuant to the provisions of the present Law.

5. For citations of short paragraphs, excerpts, or analyses, within the customary limits of the work, for the purpose of criticism, discussion or information, with mention of the source and name of the author.

6. Performance of a work in meetings with family members or by pupils in an educational institution, so long as such performance has not been made for direct or indirect consideration.

7. Exhibition of works of fine, applied, plastic or architectural arts in broadcasts, if such works permanently exist in public places.

8. Reproduction within justified and reasonable limits, of short abstracts of a work in the form of manuscripts or audio, visual, or audiovisual recordings, for the purposes of cultural or religious education, or vocational training. The name of the author and the title of the work are to be mentioned whenever possible. The reproduction should not be made for the purpose of direct or indirect profits. Such reproduction is allowed only in case the license for the same cannot be availed.

Further, article 23 of the law brings under the scope of ‘Fair Use’ the reproduction of the work in such a way and limit that it justifies the objective behind the reproduction which is done through newspapers, periodicals or broadcasting organizations. This provision of the law applies to the following works:

1. Extracts of the works regarding current incidents that have been lawfully made available to the public. The source and author of the work must be mentioned.

2. Published articles relating to discussions of issues, which have preoccupied public opinion at a certain time. Here too, the source and name of the author of the article used must be mentioned. The articles that are prohibited upon publication cannot be used.

3. Speeches, lectures, and addresses delivered in the course of public sessions of the Parliament, judicial councils and public meetings; so long as such speeches, lectures and addresses are addressed to the public, and are reproduced within the framework of reporting current news.

This also provides that ‘Fair Use’ is allowed while using works that are protected under the title of ‘related rights’ of copyright. Thus even the owners of such related rights cannot complain of infringement if the use of the work falls within the scope of ‘Fair Use’ as provided for by the law.

October 5, 2014December 1, 2020

Copyright – Infringements and Remedies

Copyright being the exclusive right of the owner to exploit the work through publication, broadcasting, printing, making copies etc., any such act done by a person who is not the owner of the copyright and has not been assigned the copyright in a given work by the owner of the rights or without the written authorization from the copyright owner amount to copyright infringement and shall be liable to the owner of the copyright to provide for damages that owner suffers due to the said infringement of his copyright.

The UAE law regarding copyright and its related rights (federal law no. 7 of 2002) (hereinafter referred to as ‘the law’) deals with the various ways in which copyright infringement may take place and has provided for penalties for them. A list of the infringements and the penalties provided for them is as under:

1. Trespassing one of the moral or financial rights of the author or the holder of the related rights provided for in this Law which also includes the publication of any work, performance, sound recording or broadcast that is protected by the law. The publication may be through any means including but not limited to the means of computers, internet, information and communication networks. The offender in this case is sentenced to imprisonment for a minimum period of two months, and to a fine amounting to ten thousand dirhams (AED 10,000) at least to a maximum of fifty thousand dirhams (AED 50,000), or to either penalty. On recurrence of the offence the penalty increases to a six months imprisonment and a minimum fine of fifty thousand dirham (AED 50,000).

2. The selling, renting or offering for circulation, in any manner or by any means, a work, sound recording, or broadcast that is protected by the law is an offence punishable with an imprisonment for a minimum period of two months, and to a fine amounting to ten thousand dirhams (AED 10.000) at least to a maximum of fifty thousand dirhams (AED 50,000), or to either penalty. On recurrence of the offence the penalty increases to a six months imprisonment and a minimum fine of fifty thousand dirham (AED 50,000).

3. The undue manufacture or import, for the purpose of sale, rental or circulation, any counterfeited work or copies thereof, any apparatuses, equipment, devices or materials specially designed or prepared for defrauding protection or technology used by the author or holder of related right for transmitting, offering for circulation, regulating or managing such rights; or preserving a specific standard of purity of the copies is an offence under the law and is subject to a penalty of imprisonment for a minimum period of three months and a fine amounting to a minimum of fifty thousand dirhams (AED 50,000) to a maximum of five hundred thousand dirhams (AED 500,000). In case of repetition of the offence, the increased penalty is imprisonment for a minimum period of nine months and a fine amounting to a minimum amount of two hundred thousand dirhams (AED 200,000).

4. The Undue disruption or impair of any technical protection or electronic data that is aimed at regulating and managing the rights prescribed by the law is an offence that subject to a penalty of imprisonment for a minimum period of three months and a fine amounting to a minimum of fifty thousand dirhams (AED 50,000) to a maximum of five hundred thousand dirhams (AED 500,000). In case of repetition of the offence, the increased penalty is imprisonment for a minimum period of nine months and a fine amounting to a minimum amount of two hundred thousand dirhams (AED 200,000).

5. The downloading or storing in the computer any copy of the computer program or applications thereof or databases, without obtaining a license from the author or right holder or successors thereof is penalized by the law with an imprisonment for a minimum period of three months and a fine amounting to a minimum of fifty thousand dirhams (AED 50,000) to a maximum of five hundred thousand dirhams (AED 500,000). In case of repetition of the offence, the increased penalty is imprisonment for a minimum period of nine months and a fine amounting to a minimum amount of two hundred thousand dirhams (AED 200,000).

6. The using of a computer program or applications thereof or databases, without obtaining in advance a license from the author or successors thereto is penalized with a fine amounting to a minimum of ten thousand dirhams (AED 10,000) upto a maximum of thirty thousand dirhams (AED 30,000) for each program, application or database. In case of recurrence the offence shall be penalized with a minimum of thirty thousand dirhams (AED 30,000). This provision is an exception of the offences number 1 and 2 mentioned above.

Apart from the above mentioned penalties the court may also order the following:

Confiscation and destruction of counterfeited copies subject of the offence or copies reproduced therefrom.
The confiscation of the equipment, and devices used in the perpetration of the offence, and which cannot be used for any other purpose.
Closing of the establishment in which the counterfeiting has been committed; for a period not exceeding six months.
Publication of the summary of the court ruling in one or more daily newspapers on the expense of the condemned party.

Apart from the penalties for the offences, the law also provides for some intermediate measures for immediate relief to the claimant. The claimant i.e. the author or his successor may request to the President of the Court of First Instance to make any of the following orders along with an injunction order:

1. Making detailed description of the work (subject to infringement).

2. Stopping the publication, exhibition or production of the work.

3. Seizing the original or copies of the work, (whether books, pictures, drawings, performances, photographs, sound recordings or broadcasts, or otherwise); as well as the devices that are used in re-publishing or reproducing such work, provided that such devices are not valid except for re-publishing or reproducing of the work.

4. Establishing public performance as regards playing, acting or reciting a work to the public and preventing the going exhibition or prohibiting it for the future.

5. Computing the income generated from the publication, performance or exhibition, by an expert appointed for this purpose, if necessary, and seize such income in all instances.

6. Establishing the fact of trespassing on any of the rights protected under the law.
In order to execute the Injunction order, the claimant must submit the dispute to the competent court within a period of fifteen days from the date of the issue of the injunction order.

October 5, 2014

Creditor’s Rights During Liquidation

With the ongoing frauds investments always pose a risk of losing all your savings. There have been many cases wherein and individual after investing in some company later finds out that the company has vanished or is liquidated. Also it appears that many Real Estate Buyers or individuals/companies dealing with companies in the UAE are discouraged to initiate legal proceedings against a company that went to or under liquidation.

It often happens that the concerned parties are worried with the method that will be required to be complied with in order to be added with the list of Creditors and whether litigation or arbitration, as may be provided for in the Agreement between the parties, permit such method of recovery of the debt owed.

The answer to this dilemma is found in Commercial Companies Law (CCL). The CCL permits for a claim to be referred to the court or arbitration to recover a debt from a company under liquidation. Unlike insolvency where court actions shall cease, court actions can be filed or can be continued with in case of liquidation (Article 691 of the UAE Commercial Code). The UAE Commercial Companies Law No. 8 of 1984 (“CCL”) states that immediately upon its dissolution the company shall be considered to be in liquidation. During the liquidation period it shall retain its corporate personality to the extent required for the liquidation formalities. The authority of the managers or the board of directors shall cease with the dissolution of the company. The company institution shall continue to exist during the liquidation period, and their authorities shall be limited to liquidation business that is not within the authority of the liquidators. The liquidator shall perform all the required liquidation functions, particularly to represent the company before the courts of law, settle the company debts and sell its movable assets or real estate by auction or any other method unless the document appointing the liquidator stipulates that the sale should be performed in a specific method.

Thus, as a matter of law, when the company is dissolved and liquidated, the company conserves its corporate body during the liquidation process and the liquidators represent the company under liquidation before the court of law.

Thus, as only the representatives of the company change, no extinction of the corporate body occurs before the liquidation completion and closure. There is neither assignment nor transfer of any agreement that intervenes between the company and the liquidators to consider the latter as a party to court or arbitration proceedings.

As to the appropriate method of recovery of a debt it is commonly found in the agreement between the parties, namely a clause stipulated the method of solving a dispute. Such method is complimentary to any other method of a debt recovery available to the creditor under the Law.

This means that a creditor can either follow the rules provided for a debt recovery at the CCL or initiate arbitration or court proceedings. Any other interpretation to the contrary shall be deemed as undue limitation of a constitutional right to litigate. The creditors can always contact lawyers and take the appropriate legal action against the debtor company.

The debtor may insist that the creditor should not or did not submit a formal claim to the Company’s liquidators and as such shall be responsible for the costs of arbitration or litigation. However, there are certain procedures the liquidators shall have to comply with. The UAE Companies Law No. 8 of 1984 states that the purpose of liquidation is to ensure that all the company’s affairs have been dealt with properly. This involves:

• Ensuring all company contracts are completed;
• Transferred or otherwise brought to an end;
• Ceasing the company’s business;
• Settling any legal disputes;
• Selling any assets;
• Collecting in money owed to the company;
• Distributing any funds to creditors and returning share capital to the shareholders.

The Company in liquidation or its liquidators shall formally and as required by the law to contact the creditors in order to review their claims that they may have against the Company under liquidation and to invite them to present their claims in the liquidation. However, even if the liquidators failed to formally notify creditors of the liquidation in 2 local newspapers, the liquidators shall nevertheless make all reasonable provisions to pay all claims and obligations, including all contingent, conditional or un-matured contractual claims known to it at the time of liquidation. Provisions also need to be made as reasonably likely to be sufficient to provide compensation for any claim against the debtor company.

Thus, the liquidation proceedings do not affect the rights and claims that the creditors may have under the Agreement(s) with the debtor company as the arbitration or litigation proceedings are necessary in order to preserve the claims of the creditors and the repayment of the same by the liquidators to the creditors.

Therefore, the creditors can always enforce their rights to be paid the amount due to them by the company under liquidation through the Dubai Courts. For further details as to how to go about with the legal procedures for debt collection one must consult lawyers.

October 5, 2014

Dissolution of a Company Incorporated in UAE

The procedure for termination or dissolution of companies in the United Arab Emirates can be examined under the provisions Commercial Companies Law. This Article talks about termination of companies under this Law.

Companies located in Free Zones and Offshore companies are not governed by the Commercial Companies Law. Apart from Free Zone Regulations and Dubai offshore company, termination of companies is covered by the Commercial Companies Law (hereinafter referred to as ‘the law’).

The law provides that a company can be dissolved for any of the following reasons:

A company can be incorporated for a fixed period of time which is to be incorporated in its articles of association. On expiry of this fixed period the company dissolves automatically.

b. completion of the objective for which the company was established

Sometimes companies are incorporated only for specific projects or tasks and therefore they continue to be in existence only till the completion of the said project or task after which they are terminated.

c. loss of all or most of the company’s assets

In order to run, a company needs to have sufficient assets without which it is not possible for it to continue to function and needs to be terminated.

For the dissolution of the company to be effected, in case the share capital of a limited liability company is half, directors are to put the matter of dissolution before a general meeting. In case the losses suffered by the company amount to more than half of the capital, the partners who hold 1/4th of the capital may request dissolution.
Liquidation is to be carried out by one or more liquidators to be appointed by the partners or the general meeting approved by the majority by which the company’s decisions are taken.

Further a notice is to be given of the dissolution of a company by entry in the Commercial Register, and publication of dissolution notice in two Arabic newspapers.

A company has a legal personality only to the extent required by the liquidation process and it is thereby required that the name of the company should have the suffix “under liquidation” added.

Immediately upon his appointment and by agreement with the Board of Directors, the liquidator is to take stock of the company’s assets and liabilities, and the Board of Directors are to make available to the liquidator all ledgers, accounts and documents of the company. The Liquidator is then to undertake the following tasks:

2. Do everything necessary to safeguard the assets and the rights and obtain all company’s claims and deposit the monies received into the company bank account as soon as received.

3. Perform all the tasks required by the liquidator, including settlement of the company’s debts and sale of the company’s movable and immovable property by public auction. However, liquidator cannot commence any new business, and if he does he will be personally liable.

4. Inform all the creditors by registered letter inviting them to present their claims. Notification shall be made in two Arabic daily newspapers. Time limit for submission of claims shall be not less than 45 days.

5. In case the company’s assets are not sufficient for the settlement of all debts, the liquidator is to discharge the debts proportionately without prejudice to the rights of the privileged creditors.

6. Liquidator is obliged to submit to the partners or the general meeting a provisional account every six months of the liquidation process.

7. Assets of the company resulting from the liquidation shall be divided among the partners after settlement of its debts and at the division each partner shall receive a sum equal to the value of the stake in the capital he contributed. Remainder of the company’s assets shall be divided between the partners in proportion to their respective share in the profit.

8. If the net assets of the company are insufficient to repay the partners stake in full, the deficit shall be distributed between them in accordance with the proportion laid down for the distribution of losses.

9. Upon completion of the liquidation, the liquidator is to submit a final account to the partners or the general meeting for the liquidation process. Such process is to be concluded with the approval of the final accounts. Furthermore, liquidator is to record the conclusion of the liquidation in the Commercial Register and request that the entry of the company be deleted from the Commercial register.

It is to be noted that liquidator is held liable to the company if its affairs are mismanaged during the period of liquidation. The authority appointing the liquidator also has the power to dismiss the Liquidator and appoint another liquidator as his replacement (Article 312).

Apart from the above mentioned procedure for termination of a company. A company can also be terminated due to it being declared bankrupt. Bankruptcy and composition with creditors are separately governed by detailed provisions of the Commercial Transactions Law.

A commercial company may be declared bankrupt if it ceases to pay its commercial debts at the time they fall due because of disruption of its financial operations. A company may be declared bankrupt even if it is in the process of liquidation.

In case of public joint stock companies and limited liability companies, if the declaration of bankruptcy is requested then the liquidation proceedings are suspended, and it may not be liquidated before completion of the bankruptcy.