In order to attract local and foreign investments and reward local innovation and creativity, countries must be able to assure investors that their intellectual property rights will be protected.  

However, we must emphasize that the attractiveness of local and foreign investments depends on the existence of many determinants essential for host countries to ensure competition in this area, among others the protection of intellectual property rights, which is the one of the main conditions. 

(Rights to patents, copyrights, trademarks, geographical indications, industrial designs and trade secrets) 

While the lack of effective protection of this element can’t attract quality foreign or local investments in the national economy.

• What is meant by intellectual property?

Intellectual property refers to the mind’s creations of inventions, literary and artistic works, designs, logos, names and images used in commerce. Intellectual property is legally protected by rights such as patents, copyright and trademarks that enable people to gain recognition or financial benefit from their innovation or invention. By establishing a healthy balance between the interests of innovators and the interests of the general public, the intellectual property system aims to provide an environment conducive to creativity and innovation flourishing.

• What is the applicable law in Egypt?

The applicable law governing the protection of the intellectual property rights in Egypt is the Law no. 82 of 2002 and its Executive Regulations.

• What are the kinds of the intellectual property rights?

1. Literary property:

1. Copyrights

It is a legal term describing the rights granted to creators with respect to their literary and artistic works. Copyright covers a wide range of works, from books, music, oil paintings, sculptures and films to computer programs, databases, advertisements, geographical maps and technical drawings.

Exhaustive lists of works covered by copyright are usually not to be found in legislation. Nonetheless, broadly speaking, works commonly protected by copyright throughout the world include:

• Literary works such as novels, poems, plays, reference works, newspaper articles
• Computer programs, databases;
• Films, musical compositions, and choreography;
• Artistic works such as paintings, drawings, photographs, and sculpture;
• Architecture
• Advertisements, maps, and technical drawings.

Copyright protection extends only to expressions and not to ideas, procedures, and methods of operation or mathematical concepts as such. Copyright may or may not be available for a number of objects such as titles, slogans, or logos, depending on whether they contain sufficient authorship.

2. Neighboring Rights

It is referred to as the rights associated with copyright, through which protection is granted to performers, producers of sound recordings, and broadcasting organizations, and which helps innovators to communicate their message to the public and publish their work. Protection shall not apply to abstract ideas, procedures, operating methods, laws, decisions, provisions and concepts of sport as long as they are in their initial form and no creative or innovative effort was required to assemble, catalogue and arrange them.

2. Industrial property:

1. Patent

A patent is an exclusive right granted for an invention. In general, a patent grants its owner the right to decide on the manner – or possibility – of third parties’ use of the invention. In return for that right, the patent owner makes the technical information available to the public, about the invention in the published patent document.

Protection is granted for a limited period of time, generally 20 years from the date of filing the application.

2. Trademarks

A trademark is a sign that distinguishes the goods or services of a company from the goods or services of other companies. Trademarks are protected by intellectual property laws.

The duration of protection varies, but the trademark registration can be renewed without limits after the time limit in exchange for additional fees. Trademark protection is enforced by the courts, which in most systems have the power to prevent trademark infringement.

3. Industrial Designs

Industrial design is the decorative or aesthetic appearance of an item. The design can consist of three-dimensional elements, such as the shape or surface of the piece, or two-dimensional elements, such as graphics, lines or colors.

The protection of Industrial Designs is 10 years 

4. Geographical Indications

A geographical indication is a sign used for goods that have a specific geographical origin and have characteristics, reputation or characteristics that are primarily ascribed to that origin. For a mark to have the same role as a geographical indication, it must identify a product as originating from a particular place.

In addition, the product’s qualities, characteristics or reputation must be primarily attributable to the place of origin. Since the qualities depend on the geographical place of production, there is a close connection between the product and its original place of production.

Main ways to protect Geographical Indications:

• Special systems (for protection);
• The use of collective marks and certification marks;
• Methods focused on business practices, including administrative schemes for product approval.
• Through the laws of unfair competition

5. Trade Secrets

Trade secrets are about confidential information that may be sold or licensed to be used.

In general, information must meet the following conditions to qualify as a trade secret and to be protected:

• Information that has commercial value because it is confidential.
• Information only to a small group of people.
• Be subject to reasonable steps taken by the rightful holder of the information to keep it secret, including the use of confidentiality agreements for business partners and employees.

The unauthorized acquisition, use or disclosure of such confidential information in a manner contrary with fair business practices is an unjust practice and even a violation of the protection of commercial secrecy.

6. Plant Variety 

• Importance of the intellectual property?

Legally:

• Protecting the rights of inventors from infringing some of their inventions without obtaining their prior permission.

Economically:

• Protect the product from theft, copying and piracy.

• Protection of the consumer from fraud and commercial imitation

• Establishment of local industries.

• Allow the creator, owner of the patent and trademark, or the author to benefit from and invest in his work.

• Encouraging and attracting foreign investment.

• Reducing the spread of counterfeit and copied works.

• Facilitate Transfer of Technology to the GCC countries and their resettlement.

• Facing the challenges of E-Commerce and the challenges of the communications and Internet community.

• Intellectual Property Protection Office at the Information Technology Authority

This Office applies the provisions of Law No. 82 of 2002 regarding the protection of intellectual property rights and its executive regulations issued by Prime Ministerial Decree No. 497 of 2005 and No. 2202 of 2006 and Minister of Communications and Information Technology Decree No. 107 of 2005 and Circular book No. 11 of 2007 issued by the Adviser to the General Public Prosecutor regarding the protection of computer program works and databases.

Conclusion:

The intangible nature of intellectual property faces difficulties in protecting it when compared to traditional property such as land or merchandise. Unlike traditional property, intellectual property is “indivisible”, as an unlimited number of people can “consume” the intellectual good without draining it. In addition, investments in intellectual goods suffer from problems of appropriation: the landowner can enclose his land with a strong fence as well as employ armed guards to protect it, but the producer of information or literature usually cannot do much to prevent the first buyer from copying and selling it at a lower price. 

Balancing rights to be strong enough to encourage the creation of intellectual goods but isn’t strong enough to prevent widespread use of the goods is a primary focus of modern intellectual property law.

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The Egyptian Commercial law no. 17 of 1999  included in part two, chapter one of the Transfer of Technology Contract (TOT), from Article 72 to 87, regulating all the matters regarding the Transfer of Technology including the significant changes in the technology field and the legal issues and conflicts between its parties.

What does the Transfer of Technology Contract mean?

Looking at it from a legal point of view, a Transfer of Technology Contract is an agreement whereby the (technology supplier) undertakes to transfer technical information in return to the (technology importer) for use in a special technical method for the production or development of a specific commodity, or for the installation, or operation of machines, or devices, or for the providing of services.

Buying, selling and leasing goods is NOT considered a Transfer of Technology

Nor shall the sale of trademarks or trade names or the licensing of their use be, unless this is stated as part of, or is related to, a technology transfer contract.

In other words, a Transfer of Technology Contract must include a transfer of the actual know-how of the technology rather than the product itself.

It is important to keep in mind that the provisions included in The Commercial Law no. 17 of 1999  shall apply to every contract for the transfer of technology to be used in the Arab Republic of Egypt, whether such transfer takes place internationally across the territorial borders of Egypt or internally. In both cases, the nationality of the parties to the agreement or their places of residence aren’t considered, the provisions of this chapter shall also apply to every technology transfer agreement concluded in a separate contract or within another contract.

Form of the agreement

According to Article 74 of the Commercial Code No. 17/1999,

(a)-The technology transfer contract must be in writing, otherwise, it will be null and void.

(b)-The contract must include a statement of the elements of knowledge and its dependents that are transferred to the technology importer.

(c)-This statement may be mentioned accompanied by feasibility studies, instructions, designs, engineering drawings, maps, pictures, computer programs and other documents that show knowledge in appendices attached to the contract and considered part of it.

Restrictions

Every condition under a Transfer of Technology Contract that restricts the freedom of the importer to use or develop it, or to define or advertise the production shall be void.

This applies in particular to the conditions related to obligating the importer to do one of the following:

1. Acceptance of the improvements made by the supplier to the technology and the performance of its value.

1.  Prohibiting the introduction of improvements or modifications to the technology to suit the local conditions or the conditions of the importer\’s facility, as well as prohibiting the acquisition of other technology similar or competing with the technology under contract.

1. The use of certain trademarks to distinguish the goods for which technology was used in their production.

1. Restricting the volume of production, its price, or how it is distributed or exported.

1. The supplier\’s participation in the management of the importer\’s facility or his involvement in the selection of its permanent employees.

1. Purchasing raw materials, equipment, machinery, devices, or spare parts to operate the technology from the supplier alone or from the facilities designated by him exclusively.

Supplier obligations

The technology supplier is obligated to disclose to the importer in the contract or during the negotiations prior to its conclusion the following:

1. The risks that may arise from the use of technology, in particular with regard to the environment, public health, and the safety of life or money, and he must inform him of the means he knows of to prevent these dangers.
2. The lawsuits and any other obstacles that may impede the use of technology-related rights, particularly those relating to patents.
3. Provisions of domestic law regarding authorization to export technology.
   • The supplier is obligated to provide the importer with information, data and other technical documents necessary to absorb the technology, as well as the technical services required by the importer to operate the technology, in particular, experience and training.
   • The supplier is also obligated to inform the importer of the improvements that he may make to the technology during the validity period of the contract and to transfer these improvements to the importer upon his request.

The supplier is obligated, throughout the term of the contract, to provide the importer, upon his request, with spare parts that he produces and that is needed by the machines or devices that are used in the operation of his facilities. If the supplier does not produce these parts in his facilities, he must inform the importer of the sources of obtaining them.

Importer obligations:

Articles 79 to 83

• The importer is obligated to employ workers with a degree of technical know-how in operating the technology and to use technical experts whenever necessary, provided that the selection of these workers or experts is from Egyptians residing in Egypt or abroad whenever that is available.
• The importer is obligated to inform the supplier of the provisions of the national legislation related to the import of technology.
• It isn’t permissible that the importer transfer to a third party the technology he obtained without the approval of its supplier.
• The importer is obligated to pay for the technology and the improvements introduced at the agreed place and time.
• The consideration may be a total amount to be paid in one or in multiple payments, and the consideration may be a share of the capital invested in operating the technology or a share of the proceeds of this operation.
• The consideration may be a certain quantity of a commodity that uses technology in its production or a raw material produced by the importer and who undertakes to export it to the supplier.

Confidentiality obligation for both parties

• The importer is obligated to maintain the confidentiality of the technology he obtains and the confidentiality of the improvements made to it, and he is asked for compensation for the damage that arises from disclosing this confidentiality, whether this occurred during the negotiation stage of concluding the contract or after that.
• The supplier is also obligated to maintain the confidentiality of the improvements introduced by the importer and transferred to him under a condition in the contract, and the supplier is responsible for compensation for the damage that arises from disclosing this confidentiality.

Contract duration/Termination:

Each of the parties of the contract may, after the expiration of five years from the date of the contract, request its termination or reconsider its terms by amending them to suit the existing general economic conditions. 

This request may be repeated whenever five years have elapsed unless another term is agreed upon.

It seems that the legislator wanted to point out in the previous text to the contracting recipient of the technology the necessity of observing the term of the contract and that this period should not belong, and the requirement to review the terms of the contract after a certain period has passed in light of the successive changes in the progress of similar or alternative technology for the sake of the recipient’s economic interests.

Guarantees

• It may be agreed that only the importer of technology shall have the right to use it and trade in the production, provided that this right is specified in a specific geographical area and for a specific period agreed upon by the two parties.
• The supplier guarantees that the technology and the documents attached to it conform to the conditions set forth in the contract, and also guarantees the production of the commodity or the performance of the services agreed upon according to the specifications set forth in the contract unless otherwise agreed in writing.
• Both the importer and the supplier shall be liable, without jointly between them, for the damage caused to persons and funds resulting from the use of technology or from the goods resulting from its application.

Jurisdiction

According to Article 87 of the Commercial Code No. 17/1999, Egyptian courts have the jurisdiction to settle disputes arising from the technology transfer contract referred to in Article (72) of this law. 

It is permissible to agree on settling the dispute amicably or through arbitration that takes place in Egypt in accordance with the provisions of Egyptian law.

In all cases, the determination of the subject matter of the dispute shall be in accordance with the provisions of Egyptian law, and any agreement to the contrary shall be null and void.

Conclusion

Transfer of technology plays a key role in the industrial development of any nation, efficiency and growth are promoted by the rapidity with which new knowledge and new technologies are disseminated.

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