Business opportunities under the Industrial Property Act 2019
Mauritius is considered as an ideal location for setting up subsidiaries to hold intellectual property (IP) rights of their parent companies. The advantages of separating the IP rights from the parent company and bringing them under the aegis of an IP holding company are multifold, in as much as:
- It allows the centralization of all IP rights of a group of companies.
- It protects the parent and other operating companies of a group from getting involved in any lawsuit concerning the IP rights.
- It enables the payment of a reduced tax on income received from licensing royalties.
- It enables the segregation of IP assets from other assets, thus becoming available to be used as security.
- It protects the IP rights from hostile takeovers of the parent company.
Besides the political, financial and tax considerations, the coming into force of the new Industrial Property Act 2019 (the “IP Act”) can be another important consideration for using Mauritius to hold IP rights as the IP Act provides a robust and enhanced IP right protection regime to the owner.
The IP Act repeals and replaces the Patents, Industrial Designs and Trademarks Act 2002 and together with the Copyright Act 2014, is the governing law for the protection of intellectual property rights in Mauritius. The IP Act was enacted to modernise the industrial property framework in Mauritius by promoting innovation, strengthening the protection of IP rights and creating better conditions to attract high quality investment.
The IP Act provides protection to Patents, Trademarks and Industrial Designs as was the case under the repealed legislation, but also extents protection to new industrial property rights, such as, utility models, plant breeders’ rights, geographical indications and layout designs of integrated circuits. The IP Act also makes provision for the accession of Mauritius to the Madrid Protocol, the Patent Cooperation Treaty and the Hague Agreement.
For the purposes of this article, we will focus on the Madrid Protocol.
The Madrid System
Assession to the Madrid Protocol provides a one-stop solution for trademark owners to obtain and maintain protection in multiple jurisdictions. Thus, trademark owners need to file a single international trademark application, in one language, and pay one set of fees to the Industrial Property Office of Mauritius (the “IPOM”) and such application will give the possibility of being registered in 130 countries of the Madrid System. Such countries include the Benelux Countries (Belgium, Netherlands and Luxembourg), the European Union (EU) member states and the members of the African Intellectual Property Organization (OAPI) comprising of some 18 African countries.
International trademark application under the Madrid System
In order to make an international application under the Madrid System, the applicant should be a Mauritius national or have a real and effective business in Mauritius. The application is made to the IPOM and the applicant designates the contracting state(s) of the Madrid System in which the trade mark should be registered . The IPOM will conduct a preliminary check and once satisfied, the application will be sent to the World Intellectual Property Organisation (the “WIPO”) which administrates the Madrid System and which will issue a certificate of registration if the application is in compliance with WIPO’s formal requirements.
Trademark owners who are not based in Mauritius do have the possibility to designate Mauritius when filing their new international applications. Additionally, existing international registrations can be amended to include Mauritius as a new country of protection.
Fostering of business in Mauritius using the Madrid System
As highlighted above, the Madrid System eliminates the necessity of having to carry out individual applications in different countries, in different languages and pay different fees. An international application under the Madrid System is less burdensome for the IP right holder and it is a cost effective way of protecting rights of Mauritian trademark owners on international markets. By acceding to the Madrid protocol, it is expected that the number of trademark applications in Mauritius will increase by at least 30% over the next four years and the number of applications will keep on increasing as and when there are more countries joining the Madrid System. This means more work for company secretaries, trademark agents as well as the legal professionals as there will be more representations before the IPOM on behalf of foreign clients, more litigation work in terms of oppositions and invalidations and more trademark infringement matters.
Readiness of Mauritius to accept international applications under the Madrid System
On 6 February 2023, the Government of Mauritius deposited its instrument of accession to the Madrid Protocol. Following the publication of the Industrial Property Regulations 2022 which provides for a schedule of fees for the international registration of trademarks under the Madrid System, Mauritius is all set for the implementation of the Madrid System on 6 May 2023. Ideally, if all goes as scheduled, the IPOM will be able to accept international applications under the Madrid System as from that date.
The Industrial Property Act 2019 has taken more than 3 years to be proclaimed and come into operation. There are great expectations on the contribution of this legislation to the modernisation of the industrial property framework in Mauritius and the transformation of our economy into a modern and dynamic one.