Protecting IP Rights in Unstable Regions

By David D. Rodrigues

When considering intellectual property protection in foreign countries, U.S. registrants tend to choose a variety of countries that immediately come to mind, such as Canada, Mexico, the EU, and China. However, other countries which may be subject to global conflict, terrorism, or political instability are either forgotten or avoided due to complexity in obtaining intellectual property therein, either due to political and economic restrictions, despite possibly conducting business or selling their products in those jurisdictions. Furthermore, it is possible for jurisdictions where rights holders already conduct business and secured their intellectual property to become subject to economic sanctions and other restrictions. Since intellectual property rights are generally conferred by local governments, sanctions against entire governments may make it seem untenable to obtain or maintain intellectual property rights in a sanctioned jurisdiction. However, that is not necessarily always the case. Rather, it may be possible for a U.S. rights holder to obtain or maintain intellectual property protections in jurisdictions that are already subject to or have recently become subject to sanctions issued by the U.S. government.

Depending on the rights holder’s business, it may be desirable to obtain intellectual property rights in jurisdictions which may be subject to sanctions. Whether it is to protect a rights holder’s brand from counterfeits or unauthorized use of a patented process, a U.S. rights holder should consider protection in any jurisdictions where it may provide services or import/sell its goods.

In order to better understand the process of obtaining or maintaining intellectual property protections in jurisdictions which may be restricted economically by sanctions, knowledge of current political events in that region are necessary. In addition, when obtaining or maintaining intellectual property protection abroad, it is important to always check the U.S. Department of Treasury Office of Foreign Assets Control (OFAC) Sanctions Programs and Information in order to determine whether a U.S. entity can conduct business in a particular jurisdiction. OFAC provides a list of countries and regions subject to economic sanctions. As of the date of this article, various countries are subject to OFAC Sanctions, including Syria, Iran, South Sudan, Zimbabwe, North Korea, and Russia.

Despite being sanctioned, OFAC does grant general or specific licenses which allow U.S. entities to conduct business with countries that may be subject to sanctions. A general license, which is subject to certain conditions and limitations, allows a U.S. entity to conduct business with governments without seeking explicit permission from the Department of Treasury. For example, as of the date of this article, despite there being numerous sanctions against Syria, there is a general license permitting U.S. entities to make transactions in connection with patent, trademark, copyright or other intellectual property protection in Syria, including exportation of services to Syria, payment for such services, and payment to persons in Syria directly connected to such intellectual property protection. A specific license, on the other hand, is when OFAC on a case-by-case basis considers applications for specific licenses to authorize transactions that are neither exempt nor covered by a general license.

Other jurisdictions which may be assumed to be untenable to obtain rights should not be outright disregarded. Consider the West Bank, which is a landlocked region between Israel and Jordan with a population of over 3 million. Rights holders who already do business in Israel and/or Jordan may wish to obtain intellectual property rights in the West Bank due to its geographic proximity. However, due to the ongoing conflict in this region, U.S. rights holders may forgo obtaining intellectual property rights, despite possibly already doing business in or selling products in that area.

A complete understanding of current sanctions along with politics of the area shows that, as of the date of this article, is possible for a U.S. rights holder to obtain or maintain intellectual property in the West Bank. For example, assume a U.S. rights holder wishes to protect its trademark in the West Bank. The Trademark Authority in the West Bank is administered by the Palestinian Authority. Pursuant to the Global Terrorism Sanctions Regulations, a U.S. entity may conduct business with the Palestinian Authority for intellectual property protection purposes, so long as the Palestinian Authority consists of President Mahmoud Abbas and Prime Minister Salam Fayyad, or any successor Prime Minister appointed by President Abbas. As of the date of this article, Mahmoud Abbas is the president of the Palestinian Authority, so the general license applies. However, should there be a change in the Palestinian Authority presidency, or a change in the sanction rules, it is the duty of the rights holder and their counsel to review and ensure that they remain in compliance with the new rules.

Note that even in the event that a general license applies, it is imperative to also confirm that any business, entity, or person who involved in obtaining intellectual property for the U.S. registrant is not on Specially Designated Nationals and Blocked Persons list, as payment to them or to a prohibited account would violate sanctions rules.

By understanding OFAC Sanctions, it may be possible to obtain or maintain intellectual property protection in jurisdictions subject to economic restraints which rights holders may otherwise think is impossible or untenable, while remaining in compliance with OFAC Sanctions. Obtaining rights in these countries may be an efficient way to prevent flagrant infringements of a rights holder’s intellectual property rights in that jurisdiction or surrounding jurisdictions. Of course, a careful review of the OFAC sanctions lists and rules with an understanding of current politics in the region is necessary before transacting business in any state or jurisdiction affected by sanctions.