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The new political approach of Libya’s trade ministry is creating yet more barriers to foreign investment, says Inês Monteiro Alves and Sofia Araújo of Inventa.
Libya has imposed, by means of a directive, a restriction on foreigners registering trademarks in the country, with effect from November 1, 2022. The European Commission’s website states that “Libya’s trademark office has suspended the acceptance of trademark applications and registrations filed by foreign applicants”.
According to the administrative directive of Libya’s Ministry of Economy and Trade, the trademark office limited its operation of new trademark registrations arising from foreign applicants, while the status of pending procedures concerning foreign-owned trademarks is still not clear.
List of restrictions
The office has reported that its activities will be limited to the following:
- It will only accept applications from companies owning national production and service units.
- It will archive issued trademark decisions.
- It will prepare information systems, in accordance with international standards, in a manner that does not violate the regulations and decisions issued, in cooperation with the Economic Information and Documentation Center.
- The director of Libya’s trademark office will submit all data not included in the Ministry’s system and not circulated in accordance with the legal procedures and organisational structure of the Ministry, approved by Cabinet Decree No. (235) of 2021, and will deliver the application record from No 22099 to the last mark published in the Official Gazette and up to the last mark filed in the register.
- It will continue to maintain the register of companies dealing with the trademark office in registering trademarks.
- It will continue to maintain the register of transfer and assignment of ownership of trademarks.
- This policy has significant implications for businesses seeking to operate in Libya, as the protection of IP is essential for the economic development of any country. It is necessary to understand the economic and political context that may be behind this decision.
Libya has been going through a context of instability plagued by political conflicts since the overthrow of former leader Muammar al-Gaddafi in 2011, who ruled the country for over 30 years. The country has, since then, been divided between two main factions: the internationally recognised Government of National Accord—which is based in the capital city of Tripoli—and the Libyan National Army (led by General Khalifa Haftar) based in the eastern city of Tobruk.
Apart from this, there are also several armed militias operating throughout the country, each with its own alliances, creating a volatile and unpredictable situation favourable to political instability.
In March, Libya’s High Council of State voted for a constitutional amendment intended to provide a basis for elections and a diplomatic representative from the UN for Libya moved to take charge of a stalled political process to enable elections that are seen as the path to resolving years of conflict.
This ongoing conflict has disrupted the country’s legal and regulatory framework, including intellectual property laws. Furthermore, the country’s economy is heavily reliant on oil and gas exports, which have been severely impacted by the conflict. Thus, the Libya’s economy has suffered greatly with the disruption of production and exports, which led to high unemployment, inflation, and a shortage of basic goods and services.
Foreign investment plays an important role in the economic development of a country, providing wealth, expertise, technology, amongst other factors. However, not allowing foreigners to register their trademarks creates legal uncertainty as it makes establishing a strong and stable presence in the Libyan market difficult. This policy discourages foreign investment, which is crucial for job creation and economic growth.
In addition, the Libyan government has a history of nationalising foreign-owned assets, which has created a lack of trust between foreign investors and the government.
Regarding trademark registration, it’s worth noting that Libya’s legal system is based on Islamic law (Sharia). It has become the country’s official legal system after the overthrow of former leader Muammar al-Gaddafi. The impact on how religion influences trademark registration in Libya is noticeable.
Inês Sequeira approached this subject in an article describing the nuances of such influence: “Libyan trademark law prohibits the registration of certain categories of trademarks, including those seen as ‘violating public morals or public order’ (…) or those that are ‘identical or similar to symbols constituting a pure religious nature’ (…). In practice, this means that trademarks referencing banned substances are regularly refused (eg, pork products in Class 29 and alcoholic beverages in Classes 32 and 33). In addition, trademarks that incorporate non-Islamic religious symbols, such as the Christian cross or Christmas-related goods (eg, Christmas trees in Class 28) are also refused.”
The religious and political influences are quite evident within the trademark protection scope in Libya, which is why this temporary suspension for trademark registration by foreign applicants do not come as a surprise.
Indeed, without a functioning central government, there is a very challenging environment for businesses operating in the country. As a result, obtaining trademark registration can be a complex and difficult process, and there may be significant obstacles to overcoming the legal and regulatory landscape.
Investment on hold
The Libyan government's policy of not allowing foreign trademark registration in the country has significant economic and political implications. The absence of a unified legal system, the leftovers of nationalising foreign assets, and the challenging business climate in Libya have all contributed to making it difficult for foreign investors to operate in the country.
The policy of not allowing foreign trademark registration may well be contributing to the country's economic stagnation and for this reason, it is imperative for the Libyan government to establish a more favourable business environment for foreign investors.
Doing so is crucial for promoting economic growth and prosperity in Libya, by way of unlocking the full potential of foreign investment and long-term economic development in the country.
Inês Monteiro Alves is legal manager at Inventa. She can be contacted at: email@example.com
Sofia Araújo is an IP consultant at Inventa. She can be contacted at: firstname.lastname@example.org
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