MULTI-JURISDICTIONAL GUIDE 2014/15

IP IN BUSINESS TRANSACTIONS

© This article was first published in the IP in Business Transactions Multi-Jurisdictional Guide 2014/15 and is reproduced with the permission of the publisher, Thomson Reuters. The law is stated as at 1 June 2014.

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IP in business transactions: Gibraltar overview Peter Howitt and David Borge Ramparts

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OVERVIEW OF MAIN IPRs

1. What are the main IPRs in your jurisdiction? How are they protected?

Gibraltar is within the EU for the purposes of protection and enforcement of any EC- wide intellectual property rights. In most respects Gibraltar follows English law in relation to registration of IPRs and protection of registered and unregistered IPRs.

Patents

Definition and legal requirements. A patent gives the owner the exclusive right to exploit the invention, which must comply with all of the following:

• Be new.

• Involve an inventive step.

• Be capable of industrial exploitation.

• Not be specifically excluded from protection.

The UK Patents Act 1997 operates in Gibraltar by virtue of the Gibraltar Patents Act. It is not possible to make an original application to register a patent in Gibraltar.

Protection. Protection will run for as long as the UK patent is valid, which is 20 years from the date of issue in the UK (provided that the appropriate annual renewal fees are paid from the fourth anniversary of the filing date). Additional protection for up to five years may be available in the form of supplementary protection certificates for medicinal, veterinary or plant protection products, with a possible further six months for paediatric medicinal products.

Gibraltar registration requirements. The application must be made to the UK Intellectual Property Office (UKIPO) and then be extended to include Gibraltar within three years of the date of issue of the UK patent. Guidance can be found at www.ipo.gov.uk). The registrar for patents is based at Companies House, Gibraltar.

To be registered in Gibraltar, the following documents must be delivered to the registrar:

• Application for Registration (Form 1).

• A certified copy of the specification(s) (including drawings if any) of the UK patent.

• A Certificate of the Comptroller-General of the UK Patent office.

• The filing fee of GBP30.00.

The registrar issues a certificate of registration.

Enforcement and remedies. The patent holder can take action through the UK or Gibraltar courts to enforce a patent. Remedies can include injunctive relief, damages, accounting for profit made, delivery or destruction of the infringed patented product. Patent infringement is not a criminal offence.

Trade marks

Definition and legal requirements. A trade mark is a mark capable of being represented graphically, by which a business's goods and services are branded, and distinguishable from those of its competitors. The definition covers words, logos, designs and 3D shapes, or a combination of these.

Protection. UK registration, which can be obtained directly through the UKIPO can be extended to cover Gibraltar at Companies House, Gibraltar, by following the procedure described below.

Registration of UK and EU trade marks are renewable every ten years, and valid in Gibraltar while valid in the UK or the EU.

International registrations (under the Madrid Protocol) can be filed with the World Intellectual Property Organisation (WIPO) by designating the UK or the EU.

Gibraltar registration requirements. There are two forms of registration:

• Application for registration in Gibraltar of a UK trade mark or a Madrid Protocol trade mark designating the UK. The following documents must be delivered to the Registry:

- application for registration of a trade mark (Form 1);

- a certified representation of the trade mark;

- a certificate of the Comptroller of the United Kingdom Patent Office (under his title of registrar of trade marks) giving full particulars of the registration of the trade mark;

- two prints of the trade mark if the trade mark is to be a registered device; and

- the filing fee of GBP30.00.

• The Registry will accept the original or a certified true copy certification issued by:

- the Office for Harmonization in the Internal Market (OHIM), based in Alicante, Spain, in the case of a Community Trade Mark (CTM); or

- the Internal Bureau of the WIPO, based in Geneva, Switzerland, in the case of a Madrid Protocol trade mark designating the EU.

• The registrar issues a certificate of registration.

• Registration of a CTM or a Madrid Protocol trade mark designating the EU. The Gibraltar Trade Marks registrar will allow registration of a CTM and Madrid Protocol trade mark designating the EU in Gibraltar. As Gibraltar is within the EU, it is not necessary to register CTMs in Gibraltar.

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Trade marks that are unregistered can be protected by the common law tort of passing off. This protection exists where a mark has sufficient goodwill that is being taken advantage of in a way that both:

• Has caused or could cause a misrepresentation that will confuse customers.

• Leads to damages or a probability of damages being suffered.

Enforcement and remedies. The trade mark owner can take action through the UK or Gibraltar courts to enforce the trade mark. Remedies can include injunctive relief, damages and accounting for profit made. Trade mark infringement is also a criminal offence.

Registered designs

Definition and legal requirements. A registered design is a legal right that protects the overall visual appearance of a product or a part of a product in the territories in which it is registered.

For the purposes of registration, a design is legally defined as being the appearance of the whole or part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture or materials of the product or ornamentation.

The design must comply with all of the following:

• Be new.

• Have individual character that is not dictated solely by function.

• Must not have been published or publicly disclosed within the EEA (including being available electronically from the EEA) before registration. However, there is a 12 month grace period following disclosure in which the designer can make its application.

Registration of a UK or EU registered design provides an effective monopoly on use of the design. Registration protects against both deliberate copying and independently created designs that do not produce a different overall impression.

Registration. Designs registered in the UK are automatically protected in Gibraltar by virtue of the Gibraltar Designs Act 1928. There is no design registry and no need for an application to be made in Gibraltar.

Designs registered in the EU (by way of a Registered Community Design (RCD)) are automatically protected in Gibraltar under the Treaty on the Functioning of the European Union.

UK designs are registered by the UKIPO and RCDs are registered by the OHIM. Further international protection is available under the WIPO Hague Agreement Concerning the International Deposit of Industrial Designs 1925.

Enforcement and remedies. Registered ownership is transferable and the owner of the design can enforce a registered design. Remedies are similar to those specified for patents (see above, Patents, Enforcement and remedies).

Length of protection and renewability. The registration can be renewed every five years up to 25 years, subject to payment of fees.

Unregistered designs

Definition and legal requirements. A UK design right prevents others from copying a design. It gives automatic protection for the internal or external shape or configuration of an original design. It is not a complete right as it covers only the 3D aspects of the item. It does not protect the surface decoration of the product or any 2D pattern such as a wallpaper or carpet design.

An unregistered UK design right gives the right to prohibit others from reproducing the design for commercial purposes without permission. It is therefore a right to prohibit copying of the design and it is not a monopoly right capable of restricting any similar independently created design.

Protection of an unregistered UK design right is automatic once the design is recorded in a tangible form. It:

• Applies to designs that are new and have individual character.

• Excludes any design features that enable one product to be functionally fitted or aesthetically matched to another product ("must-fit" and "must-match" exceptions). This allows for competition in the spare parts market.

Protection. Designs made in Gibraltar qualify for reciprocal protection under UK law under the Design Right (Reciprocal Protection) Order 1989 (No.2) 1989 (SI 1989/1294). Protection only extends to the UK and Gibraltar, and prevents others from making, marketing, importing or exporting a product using the relevant design.

Enforcement remedies. The owner can take action through the UK or Gibraltar courts to enforce. Remedies can include injunctive relief, damages and accounting for profit made.

Length of protection. Unregistered designs are protected for the lesser of:

• 15 years from creation of the design.

• Ten years from when the design was first marketed.

Unregistered Community Design Right (UCD). UCDs arise under EU law and their criteria and exclusions are the same as for UK design rights. As with UK design rights, a UCD only provides a right to prohibit copying of the design. It is not a monopoly right capable of restricting any similar independently created design. Protection only lasts for three years from when the design is first made available to the public in the EU.

Copyright

Definition and legal requirements. Copyright protects the authors of works by preventing others from copying or reproducing the work. Copyright protection applies to the following types of work:

• Original literary (including databases, computer programs and preparatory design materials for computer programs), dramatic, musical or artistic works.

• Sound recordings, films or broadcasts.

• The typographical arrangement of published editions.

Protection. The protection arises automatically on creation of the qualifying work and registration is therefore not required.

Enforcement and remedies. The copyright owner or licensee in some cases can bring an action for infringement of copyright. Remedies are similar to trade mark infringement remedies (see above, Trade marks, Enforcement and remedies). Copyright infringement is a criminal offence.

Length of protection and renewability. This depends on the type of work but can last for up to 70 years from the death of the work's author.

Confidential Information

This is a common law right. To qualify, the information must be all of the following:

• Confidential in nature.

• Communicated in confidence.

• Clearly identifiable as being confidential.

Registration is not available.

The owner can take action to enforce through the UK or Gibraltar courts. Remedies can include injunctive relief, damages and accounting for profit made. Damages for breach of confidence depend on whether the breach is contractual or non-contractual.

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Breaches can only occur while the information remains confidential.

MAINTAINING IPRs Search and information facilities

2. What facilities are available to conduct IP searches and obtain IP information on registered IP rights?

The websites listed below contain databases which can be searched before IPR registration applications and after such registrations to maintain the IPRs and monitor possible infringement.

Patents

UK and European patents and patent applications can be found on the:

• UK Online Patent Services website: www.ipo.gov.uk/p-find.htm.

• European Patent Office website: www.epo.org/searching.html.

• WIPO website: www.epo.org/searching.html.

Trade marks

UK and European trade marks and applications can be located on the:

• UK Online Patent Services website: www.ipo.gov.uk/types/tm/t-os/t-find.htm.

• OHIM website: http://oami.europa.eu/ows/rw/pages/QPLUS/databases/searchCTM.en.do.

• WIPO website: www.wipo.int/romarin.

Design rights

UK and European registered design rights and applications can be located on the:

• UK Online Patent Services website: www.ipo.gov.uk/d-find.htm.

• OHIM website: https://oami.europa.eu/ohimportal/en/.

Confidential information

Due to the nature of confidential information, searches are not possible.

In addition to the above, it is advisable to set up a watch service (on-line or through specialist agents or patent attorneys) to identify and monitor any subsequent and potentially infringing applications.

Maintenance of main IPRs

3. What steps must a business take to maintain the registration and status of its main IPRs?

Patents

Renewal fees must be paid annually from the fourth anniversary of the filing date.

Trade marks

UK and CTM registrations must be renewed on the tenth anniversary of the filing date and every ten years after that.

There is no limit to how long a mark can remain registered but there is a risk that registration can be revoked if the mark either:

• Has not been used within five years of registration (or subsequently not used for a continuous period of five years).

• Becomes generic or misleading,

Registered design rights

UK registered designs and RCDs are initially protected for five years from the date of registration and registration can be renewed for a maximum of four subsequent five year periods (for a maximum period of 25 years).

Monitoring infringement

4. What steps can a business take to avoid committing an infringement of another party's IPRs and to monitor whether a competitor is infringing its IPRs?

Patents

Patent searches should be undertaken in applicable jurisdictions, ideally by specialist search agents.

Trade marks

Searches should be made of the registers at the UKIPO, OHIM and WIPO for any potentially conflicting registered UK or EU marks or applications.

Searches for unregistered marks should also be undertaken to avoid passing off claims. As well as searching online, searches in Gibraltar should be extended to the Gibraltar phone book and local media for any marks that do not have an online presence.

Trade mark watch services are advisable.

Copyright

To prove ownership of copyright, the author must provide evidence of creation of the work and proof of authorship. The author must also demonstrate that he is an individual domiciled or resident in Gibraltar, the UK or another EEA state, or that the work was first published in an EEA state.

Design rights

The steps are similar to trade marks but design rights more difficult to monitor.

Confidential information

Procedures should be put in place to ensure that confidential information is not divulged or used without permission. Preferably confidential information should be marked as such.

EXPLOITING IPRs

5. What are the main steps in an IP audit in your jurisdiction to determine the content of an IP portfolio?

The main steps in an IP audit are:

• Identifying registered and unregistered IPRs that exist in the portfolio and the territory covered (that is, patents, trade marks, unregistered trade marks, designs (registered and unregistered), copyrights, know-how and domain names).

• Considering the ownership of the IPRs (that is, whether they are licensed or sub-licensed).

• Confirming title to the different IPRs (that is, by searching available IP registers and online databases (and domain name databases) (see Question 2)). These searches should also reveal registration, renewal and expiry dates.

• Checking all IP licences and assignments for key items such as territoriality, exclusivity, exploitation rights, scope, restrictions, indemnities and any other adverse clauses.

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ASSIGNMENT Scope of assignment

6. On what basis can main IPRs be assigned?

Patents

To register a patent assignment in Gibraltar, the following documents must be delivered to the Registry:

• Application form for assignment or transmission (Form 4).

• An office or certified copy of the assignment or transmission document.

• The filing fee of GBP20.00.

See Question 7 for assignment formalities.

Trade marks

To register a trade mark assignment in Gibraltar, the following documents must be delivered to the Registry:

• Application form for the entry of the assignment, transfer or devolution of the proprietorship (Form 2).

• A certified copy of the documents showing the assignment or transfer of the privileges and rights.

• The filing fee of GBP20.00.

See Question 7 for assignment formalities.

Copyright

Copyrights can be assigned. There are no Gibraltar-specific notification requirements.

See Question 7 for assignment formalities.

Design rights

Registered and unregistered designs can be assigned. There are no Gibraltar-specific requirements for this, as the assignment provisions of the UK Registered Designs Act and the UK Copyright, Designs and Patents Act 1988 apply.

See Question 7 for assignment formalities.

Confidential information and other intangibles

Confidential information (like good-will, know-how and other intangible assets not forming part of normal IPRs) are assignable under the normal principles of contract law.

Formalities for assignment

7. What formalities are required to assign each of the main IPRs?

Patents

Patent assignments must be in writing and signed by or on behalf of the owner. Any patents that are jointly owned can only be assigned with the consent of all other co-owners.

The assignment should be registered at the UKIPO both:

• To prevent someone with a later claim acquiring a better title than the assignee.

• Within six months of the assignment, to prevent the assignee losing the right to claim costs and expenses in any infringement action relating to possible infringements that occur before the date of registration.

Only exclusive licensees are entitled to bring proceedings in respect of any patent infringement committed after the date of the licence.

Any assignments registered at the UKIPO can also be registered in Gibraltar by delivering the following documents to the Registry:

• Application form for assignment or transmission (Form 4).

• An office copy or certified copy of the document showing the assignment or transmission.

• The filing fee of GBP20.00.

Trade marks

Licences of UK trade marks are only effective if in writing and signed by or on behalf of the licensor. Each owner can use the trade mark individually, but the consent of all co-owners must be obtained for the licence to be granted.

A licence must be registered at the UKIPO within six months of grant or both:

• It will be ineffective against someone acquiring a later conflicting interest without knowledge of the licence.

• The assignee will lose the right to claim costs and expenses in any infringement action relating to possible infringements that occur before the date of registration.

Only exclusive licensees are entitled to bring proceedings in respect of any patent infringement committed after the date of the licence.

Any assignments registered at the UKIPO can also be registered in Gibraltar by delivering the following documents to the Registry:

• Application form for the entry of the assignment (Form 2).

• An office copy or certified copy of the document showing the assignment.

• The filing fee of GBP20.00

Copyright

Assignments of copyrights must be in writing and signed by or on behalf of the assignor. There is no express provision for joint owners, but it is safest to obtain the consent of all owners.

Design rights

The assignment of a registered or unregistered UK design right must be in writing and signed by or on behalf of the assignor (this also be applies to CDRs). The assignment of UK design rights may be partial and of existing or future rights. There are no express requirements for either type of right in relation to joint owners, but it is safest to obtain the consent of all owners.

Where an assigned design consists of both registered and unregistered design rights, the assignment of one automatically assigns the other unless there is a contrary intention. However, the assignment of a UK registered design does not automatically assign CDRs.

The assignment of registered design rights must be recorded on the UKIPO (using Form DF12A) or OHIM register, to secure evidence of title.

Confidential information and other intangibles

See Question 6.

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A Main terms for assignments

8. What main terms should be included in an assignment of IPRs?

The following main terms should be included in an assignment of IPRs:

• The parties (whether the buyer or seller is part of a group, and whether they need to be joined into the assignment).

• Definition of the IPRs being assigned (including physical identification of any embodiments of the IPRs) and whether other intangible assets are included (for example, goodwill and confidential information).

• Registration requirements.

• The right to take action in respect of infringements taking place before the assignment date.

• Consideration, title and treatment of other intangible assets (for example, goodwill).

• Warranties.

• Indemnities.

• Waiver of moral rights.

• Further assistance clauses.

• Law, jurisdiction and dispute resolution clauses.

LICENSING Scope of licensing

9. On what basis can the main IPRs be licensed?

A licence can be granted on a sole, exclusive or non-exclusive basis. Depending on the IPR, the licence can be express, implied, oral or in writing.

Formalities for licensing

10. What are the formalities to license each of the main IPRs?

Patents

There is no requirement for a patent licence to be in writing or signed by any of the parties (although it is advisable that it is). A licence cannot be granted without the consent of all the co-owners (if any).

Gibraltar registration requirements are the same as for assignments (see Question 7, Patents).

Trade marks

Licences of UK trade marks are only effective if in writing and signed by or on behalf of the licensor. Each owner can use the trade mark individually, but the consent of all co-owners must be obtained for a licence to be granted.

Copyright

There is no need for a copyright licence to be in writing. However, an exclusive licence must be in writing and signed by the licensor to confer the copyright owner's rights onto the licensee. Copyrights cannot be validly licensed without the consent of all the co-owners (if any).

Design rights

There is no need for a licence of registered/unregistered rights to be in writing. However, exclusive licences must be in writing and signed by the licensor to confer full rights onto the licensee.

Licences of registered designs should be recorded at the UKIPO registry. However, the registrar will not record a licence of a UK registered design unless satisfied that the licensee has also been granted a corresponding licence of a UK design right that subsists in the relevant design.

Confidential information and other intangibles

Standard written contracts apply.

Main terms for licences

11. What main terms should be included in an IP licence?

The main terms that should be included in an IP licence are:

• The parties.

• A clear definition of the licensed IPR.

• The scope of the licence (for example, whether it is exclusive, non-exclusive or there is sole proprietor and field of use restrictions).

• Ownership and exploitation.

• Territory.

• Term.

• Marketing and promotion.

• Consideration.

• Quality control.

• Warranties, indemnities and insurance.

• Maintenance obligations.

• Infringement obligations.

• Rights to assign.

• Sub-licensing and sub-contracting.

• Exclusions and limitations of liability.

• Further assurance and technical assistance.

• Improvements.

• Quality control.

• Confidentiality.

• Waiver.

• Force majeure.

• Notice.

• Inadequacy of damages.

• Variation.

• Severance.

• Counterparts.

• Third party rights.

• Termination and effect of termination.

• Law, jurisdiction and dispute resolution.

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TAKING SECURITY

12. Is security commonly taken over IPRs?

Security can be taken over IPRs. It is easier to take security over registered IPRs.

13. What are the main security interests taken over IPRs?

Security is usually taken over IPRs by way of a legal mortgage or a fixed or floating charge.

The following charges or mortgages in respect of Gibraltar companies must be registered at Companies House Gibraltar within 21 days of their creation:

• Over goodwill.

• Over a patent or a licence under a patent.

• Over a trade mark.

• Over a copyright or licence under a copyright.

In practice, it is advisable to use:

• Fixed charges over registered IPRs.

• Floating charges over unregistered IPRs and other intangible assets.

• A mortgage and licence-back approach for higher value unregistered IPRs and other valuable unregistrable intangible assets.

M&A Due diligence

14. What IP-related due diligence is commonly carried out in both a share sale and an asset sale?

For a share or asset sale, the buyer company obtains information regarding IPRs owned by the seller company, including IP owned or used by the seller company.

An asset-based transaction (as opposed to a share purchase) distinguishes between IPRs owned by the business and IPRs used by the business. It is key to distinguish between IPRs which are exploited and owned by the seller, and those that are used under licence or assignment from a third party.

The buyer seeks details regarding, at least:

• Registered IPRs owned (exclusively or jointly with a third party) by the seller.

• Unregistered IPRs.

• Creation of IPRs by third parties.

• Registration of assignments of IPRs with the UKIPO and, where applicable, local registration.

• Costs incurred for maintenance of the registered IPRs relating to the seller.

• Costs required to complete the registration of IPRs relating to the seller that are capable of registration, but are not yet registered.

• Security interests, options, charges or liens to which IPRs owned/used by the seller are subject.

• Licences of IPRs granted by the seller to a third party (including members of all companies in the seller group of companies, whether formal or informal, registered or unregistered).

• The confirmation that fees owing to third parties and owed by third parties (principally but not limited to licensing) are fully paid up.

• Whether any agreement (for example, a joint venture arrangement) will lapse following a change of control of the seller (including members of all companies in the seller group of companies).

• Details of any disputes, complaints, objections, challenges, proceedings or claims for infringement, subsistence, validity or ownership of any IPRs involving or concerning the seller.

• Details of any existing, suspected or alleged infringement of third party IPRs by the seller, and any obligation on the seller to pay any fee, compensation or any other sum in respect of that infringement.

Warranties/indemnities

15. What IP-related warranties and/or indemnities are commonly given by the seller to the buyer in both a share sale and an asset sale?

Share sale

The seller typically warrants that:

• The schedule of IPRs owned is complete and accurate, and that the company is the sole owner of the IPRs.

• It is the sole legal and beneficial owner of all rights and interest in, and title to, the relevant IPR and the IPR is free from any encumbrances (for example, licences, options, charges and mortgages).

• The list of the seller's registered IP is accurate and complete.

• All fees paid for maintenance and renewal of IPRs are paid up.

• The IPRs have not been subject to challenge, opposition or attack, and have not been infringed by a third party.

• The use or exploitation of the seller's IPRs will not infringe the IPRs of any third party.

• No third party is infringing any IPRs owned by the seller.

• The seller has not disclosed any confidential information to third parties (except in the ordinary course of business and subject to obligations of confidence).

• The conduct of the seller is not restricted by virtue of confidentiality obligations undertaken to third parties.

Asset sale

The warranties are similar to those of a share sale.

Warranties provided in both a share and asset sale are negotiated between the parties and may be limited or qualified by:

• Issues that are material or which might cause a material adverse effect (materiality).

• What a party knows or should know (awareness).

• Time limits.

• Scope, for example to certain types of documents.

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A Transfer of IPRs

16. How are the main IPRs transferred in both a share sale and an asset sale?

Share sale

In a share sale, the main IP assets remain owned by the company when the company's shares are transferred under a share purchase agreement. No further additional transfer documents are required, unless an assignment or licence of IP is required from a company in the seller group that is not transferring to the buyer. In these circumstances, the share purchase agreement should include an obligation on the seller to assign or licence, or procure the same, to the buyer at completion.

IP licences granted to the seller can terminate on a change of control, requiring further negotiation with third party licensors to seek a new licence or waiver.

Asset sale

Title in each IP asset sold must be transferred. This is often dealt with in the asset purchase agreement and by using specific secondary assignment agreements. In addition, the asset purchase agreement and, often, specific secondary assignment agreements also specify the assignment of unregistered IPRs and other intangibles such as goodwill, know-how and confidential information.

Following transfer of the relevant assets, the relevant IP registers should be updated to reflect the new owner of the IP.

It is usually necessary to have third party licensor consent to assignment or novation of licensed IPRs. It is reasonable for a buyer to require a seller to obtain the consent of the licensor to the transfer or novation of the IPRs, as a condition precedent to the transaction.

JOINT VENTURES

17. Is it common for companies to set up joint ventures in your jurisdiction to develop projects that heavily involve IPRs?

It is common to use a company to hold IPRs. This allows for joint venture arrangements that specify the respective positions of each party using a shareholder agreement.

COMPETITION LAW Main provisions and common issues

18. What are the main provisions of your national competition law that can affect the exploitation of the main IPRs?

The Treaty on the Functioning of the European Union (TFEU) is directly applicable in Gibraltar. It can be invoked by natural and legal persons in Gibraltar's national courts. Gibraltar has not enacted any national competition laws.

The following are prohibited:

• Agreements which have the effect of preventing, restricting or distorting competition, and which may affect trade between member states.

• Conduct which constitutes an abuse of a dominant position and which has a potential effect on trade between member states.

However, the following agreements are exempt, unless they contain hardcore or excluded restrictions:

• Agreements concluded between competing undertakings where the market share does not exceed 20% of the relevant market.

• Agreements concluded between non-competing undertakings where the market share does not exceed 30% of the relevant market.

19. What are the most common national competition law issues that arise in the exploitation of the main IPRs?

See Question 18.

Exclusions/exemptions

20. What exclusions or exemptions are available for national competition law issues involving the exploitation of the main IPRs?

The exclusions and exemptions in Article 101(3) of the TFEU and the EU block exemptions apply (that is, those relating to vertical agreements, research and development, technology transfer and agreements of minor importance).

ADVERTISING

21. To what extent do advertising laws impact on the use of third party trade marks?

A person responsible for comparative advertising must ensure that the relevant advertising:

• Does not mislead contrary to MCAA provisions.

• Compares goods or services meeting the same needs or intended for the same purpose.

• Objectively compares one or more material, relevant, verifiable and representative features of those goods or services, which may include price.

• Does not create confusion in the market place between the:

- advertiser and a competitor;

- advertiser's goods, services, trade marks, trade names or other distinguishing marks and those of a competitor.

• Does not discredit or denigrate the goods, services, activities, circumstances, trade marks, trade names or other distinguishing marks of a competitor.

• In the case of goods with designation of origin, the advertising relates in each case to goods with the same designation.

• Does not take unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor, or of the designation of origin of competing goods.

• Does not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name.

Injunctions can be obtained for breaches of these requirements.

EMPLOYEES AND CONSULTANTS

22. Who owns each of the main IPRs created by an employee in the course of his employment? Is compensation payable to the employee? What main steps can an employer take to ensure it owns each of the main IPRs?

Ownership

The employee's contract of employment usually outlines ownership of the main IPRs created by an employee during his term of employment. Unless otherwise agreed in writing, ownership devolves to the employer.

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Compensation

Statutory compensation may be paid by employers to their employees who have made patented inventions that are of outstanding benefit to their employers. For patents registered before 1 January 2005, the employer is only liable to pay compensation if the patent is of outstanding benefit to the employer.

Main steps

A clause should be incorporated into the contract of employment stipulating that the employee must do all of the following:

• Acknowledge that all IPRs created in the course of employment are created for the employer's benefit.

• Execute all documents, make all applications and do all acts and things as may be necessary/desirable to:

- vest the IPRs in the works;

- register the IPRs in the name of the relevant company.

• Defend the company against claims that works embodying IPRs infringe third party rights, and protect and maintain the IPRs.

• Waive any moral rights in the IPRs to which he now or may at any future time be entitled.

Depending on the employee's role, it may be appropriate to incorporate a clause appointing the relevant company as attorney in the employee's name and on their behalf. This is so that the company can execute documents and use the employee's name, to obtain the benefit of all IPRs for which an employee may be responsible. The power of attorney must be executed as a Deed.

23. Who owns each of the main IPRs created by an external consultant? What main steps can a business take to ensure it owns each of the main IPRs?

Ownership

External consultants own most IPRs they create, unless agreed otherwise in writing. However, in relation to:

• (UK) Design rights, the person who commissioned the design owns the design right.

• Database rights, the person who takes the initiative in and assumes the risk in obtaining, verifying or presenting the contents of the database owns the database right. The level of risk assumed by the consultant is therefore conclusive in determining the owner of the database right.

Main steps

A written agreement between the person retaining the consultant and the consultant should include details of the IPRs created and assigned by the consultant and a moral rights waiver.

TAX

24. What are the main taxes payable by a licensor on the licensing of the main IPRs?

A licensor is liable to pay tax on royalty income accrued in and derived from Gibraltar. Royalties will be deemed to "accrue and derive" in Gibraltar where the company receiving the royalty is Gibraltar-registered. The licensor is subject to corporation tax at 10% or income tax if it is an individual.

There are no withholding taxes except for in relation to payments to subcontractors in the construction industry and payments to employees under the Pay As You Earn (PAYE) system.

There is no VAT.

25. What are the main taxes payable by a seller on the disposal of the main IPRs?

Sums received on the disposal of IPRs by a company that is tax resident in Gibraltar may be subject to corporation tax at a rate of 10%. Capital gains are not subject to tax in Gibraltar.

CROSS-BORDER ISSUES

26. What international IP treaties is your jurisdiction party to?

Gibraltar is not a party to any of the WIPO administered treaties.

27. Are foreign IPRs recognised in your jurisdiction?

Patents

UK patents are recognised in Gibraltar following an application for an extension to Gibraltar. The patentee can protect his interest by suing for infringement.

Trade marks

Trade mark rights with effect in the UK are recognised by the Gibraltar courts, including:

• UK trade mark applications/registrations.

• Community trade mark applications/registrations.

Copyright

The following may qualify (see below) for copyright protection if it is first published in Gibraltar, the UK or another EEA state at the material time (as defined by the Intellectual Property (Copyright and Related Rights) Act):

• A literary, dramatic, musical or artistic work.

• A sound recording or film.

• The typographical arrangement of a published edition.

These qualify if the author is either:

• A Gibraltarian or a national of the UK or another EEA state.

• An individual domiciled or resident in Gibraltar, the UK or another EEA state.

• A body incorporated under the law of Gibraltar, the UK or another EEA state.

A broadcast qualifies for copyright protection if it is made from a place in Gibraltar, the UK or another EEA state.

Design rights

Owners of registered design rights in the UK or the EU are automatically protected in Gibraltar.

Unregistered designs created in the UK and Gibraltar are subject to reciprocal protection.

All other foreign registered and unregistered designs are not recognised in Gibraltar unless registered in the UK or the EU.

REFORM

28. Are there any proposals for reform?

There are no current proposals for reform of IPR law in Gibraltar. There are proposals for a number of changes in the UK IPR regime which, given the close statutory and common law relationship, would likely affect Gibraltar.

global.practicallaw.com/ip-mjg

Country Q&

A

ONLINE RESOURCES

Gibraltar laws

W www.gibraltarlaws.gov.gi/full_index.php

Description. A full index of Gibraltar legislation (official), maintained by the Government of Gibraltar.

UK legislation

W www.legislation.gov.uk/

Description. Contains enacted UK legislation (official).

Practical Law Contributor profiles

Peter Howitt, Founder

Ramparts Law T +350 200 61061 F +350 200 64756 E peterhowitt@ramparts.eu W www.ramparts.eu

Professional qualifications. Legal Practice Course, 1999; England and Wales, Solicitor, 2002; Gibraltar, Solicitor, 2012

Areas of practice. Commercial; corporate; e-commerce; payments; gaming; tax.

Non-professional qualifications. BA Law & Criminology, University of Sheffield

Languages. English

David Borge, Associate

Ramparts Law T +350 200 61061 F +350 200 64756 E davidborge@ramparts.eu W www.ramparts.eu

Professional qualifications. England and Wales, Solicitor, 2012; Legal Practice Course, 2010

Areas of practice. Gaming/online gambling; tax; intellectual property.

Non-professional qualifications. Pharmacy MPharm (Hons), Cardiff University

Languages. English and Spanish