Commercial

Franchising can be defined as the practice of using someone else’s business method, in which the franchisor grants the franchisee, the right to sell a product or service under the franchisor’s systems, procedures and structure.

Under Maltese Law, franchise and franchise agreements are not specifically regulated, thus, this highlights the importance of having franchising arrangements and agreements. There are currently no mandatory elements prescribed by Maltese law concerning the form and content of a franchise agreement, however, such agreements fall under general contract law and anything regulating contracts in general would usually be applicable. Franchise agreements are not required by Maltese law to be registered.

There are a number of franchising formats available which one may opt for and these can be generally categorised as;

• Single-Unit Franchise – which allows a franchisee to open one facility
• Multi-Unit Franchise – which allows a franchisee to open several facilities
• Area Development Franchise – which allows a franchisee to open several facilities in a certain region
• Master Franchise – which allows a franchisee to open and sell the right to the franchisee

At GMX we can assist clients in the drafting of franchise agreements as well as giving advice on various matters related to franchising such as corporate licensing, group structuring, taxation and intellectual property.

The protection of a business’ Intellectual Property (IP) is predominant in that it is used to identify the products, goods or services of the business, as well as, distinguish them from those of another undertaking. Due to the constant expansion and development of new technologies worldwide, the need to protect one’s IP rights has been ever-growing in the past few years and business owners have now understood the importance of such rights.
The main scope of IP includes trademark, copyright, patent and design rights. It is in the interest of every owner to apply for registration of such rights which will confer on the said owner exclusive rights. Malta’s primary intellectual property legislation falls under the:
Trademarks Act

• Copyright Act
• Patents and Designs Act
• Intellectual Property Rights (cross-border measure)

IP legislation in Malta went through major changes in the year 2000 in light of aligning national legislation with the relevant EU legislative framework of the IP sector. On an international level, Malta is currently party to a number of International IP Treaties and Agreements including;

• Paris Convention for the Protection of IP
• Universal Copyright Convention
• WIPO Agreement
• WTO TRIPS Agreement
• Patent Cooperation Treaty
• European Patent Convention
• Madrid Agreement and Madrid Protocol
• Madrid Agreement on Indications of Origin

Trademarks
Upon registering a trademark under Maltese law, exclusive rights are conferred upon the proprietor in terms of that trademark. The proprietor can also avail himself of other rights and protection provided by virtue of the Trademarks Act and may also choose to transfer, assign or license such trademark.
Upon joining the European Union, Malta, became a full member of the Community Trade Mark (CTM) and Community Design (CD) systems. Our firm helps clients in applications, oppositions, cancellations or appeals of any CTM or CD. A CTM is any trademark which is pending registration or has been registered in the European Union as a whole, as opposed to individual registration on a national level. This renders the CTM, as well as the CD, a favourable option to right holders, who wish to have their national registered mark registered under the CTM or CD systems.
Furthermore, clients who have duly filed an application for trademark protection in a country which is part of the World Trade Organisation or is a party to the Paris Convention, can seek help from our lawyers at GMX as to how he can avail from his right to priority in registering the same mark as a Maltese Trademark for any or all of the same goods or services.

Copyright
Under Maltese law, copyright is granted to an eligible work automatically, upon satisfying three criteria:
1. Qualification
2. Originality
3. Fixation
Generally, copyright includes; Artistic Works, Audio-visual Works, Databases, Literary work and Musical work. Upon the creation of the work and satisfying the above stated criteria, copyright protection is awarded without the need for registration under the Maltese Copyright Act. Such protection is limited to territoriality and the connecting factors are generally domicile or citizenship; either by virtue of authors or with reference to the country where the work was made or published.
The issue with copyright protection lies in identifying and proving the ‘date’ when the artistic work was created. This date can be used against any infringement proceedings third parties may bring, claiming that the work is theirs.
In representing corporate and personal clients, our firm looks to help all its clients in matters related to copyright protection and any other neighbouring rights.

Patent & Designs
Patent & Designs
In June 2002, the Patents and Designs Act came into force, repealing and substituting the Industrial Property Protection Ordinance dealing with patents.
Under the new Act, not any invention can be registered as a Patent. To the contrary, to be registrable, a patent must be ‘novel’, in that it must involve an inventive step and have industrial application.
The Act, while giving a specific list of documents which one would need to register a patent, also expressly excludes certain inventions from being registered, and these include
– Discoveries, scientific theories and mathematical methods;
– Aesthetic creations;
– Presentations of information;
– Processes for cloning: and
– Inventions against public order or morality
Our firm can also help clients regulate their ‘Design’ rights. ‘Design’ is a term used to describe the appearance of the whole or part of a product with special characteristics. The Patent and Design Act provides protection to owners of designs and also grants them their status as a property right. The Act provides that designs shall be protected through registration, by means of which exclusive rights shall be conferred upon their holders.
The scope of protecting one’s design is due to the fact that the right extends to any design which does not give a different overall impression on the informed user.
We can assist in optimising the protection afforded to your company’s Intellectual Property including, inter alia, computer software, technical knowledge, patents, trademarks, trade secrets & methods, and copyrights. More specifically, we specialise in;

• Registration of copyrights, trademarks, patents and designs;
• Drafting of Agreements identifying, creating, protecting and enforcing intellectual property rights and assets;
• The building of protective clauses into all agreements and arrangements to which the protection of intellectual property rights may be incidental or ancillary, such as in the context of Merger & Acquisition transactions;
• Implementation of licence, distribution, manufacture and franchise arrangements and drafting of relative agreements;
• Infringement proceedings.

The right to protection of personal data is a fundamental right. It is different from, but closely linked to, the right to respect for private and family life. This distinction is notably made in the EU Charter of Fundamental Rights – whereby the two rights are mentioned separately.
In the informational technology era we live, it is an undisputable fact that the landscape for processing personal data has become quite opaque. To this end, EU has adopted a robust regulatory framework. The central pieces of legislation are (i) Directive 95/46/EC of 24 October 1995, which regulates the protection of individuals with regard to the processing of personal data and the free movement of such data (‘Data Protection Directive’) and (ii) Directive 2002/58/EC of 12 July 2002, concerning the processing of personal data and the protection of privacy in the electronic communications sector (‘Privacy and Electronic Communications Directive’). Malta, being a fully-fledged EU member since its accession in 2004, has implemented the said Directives into national legislation, i.e. the 2001 Data Protection Act (Cap. 440 Laws of Malta). This, together with a number of subsidiary legislation, forms the local legislative framework for the protection of personal data. The Constitution of Malta also provide for the protection of the fundamental rights and freedoms of individuals.

Key Definitions

Notification requirement for data controllers
Data controllers must notify their processing of personal data to the Office of Information and Data Protection Commissioner (‘the Commissioner’). Such notification is effected against an initial fee (and subsequently annually thereafter) prior to such processing.
In circumstances where the only personal data processed by a company are those contained in its Memorandum and Articles of Association as registered with the Registrar of Companies under the Companies Act, such company is exempted from the aforementioned notification requirement. Furthermore, the following categories of persons are obliged to notify but are exempt from payment of the notification fee: (i) self-employed persons who carry on a trade, business, profession or other economic activity and do not employ any employees with them; and (ii) any philanthropic institutions and similar organisations, band clubs, sports clubs and similar institutions, registered trade unions and political parties and clubs adhering to political parties, which are also exempt from tax under the Income Tax Act.
We will be pleased to assist you in the notification procedure as well as in functioning as intermediaries between you and the Commissioner.

Data subjects’ rights
A number of rights are envisaged under the Data Protection Act with reference to the data subjects, which are summarized below:

• Right of compensation against a data controller who processes data in contravention of the Data Protection Act or regulations made thereunder;
• Right of access, upon explicit request on behalf of the data subject, whereby the data controller is required to provide in written form actual information about the data which is processed, where the information has been collected, the purpose of the processing and to which recipients the information is disclosed. The controller is also required to provide in his written reply about the knowledge of the logic involved in any automatic processing of data concerning the subject;
• A data subject may oppose the processing of his data for direct marketing purposes. The data controller is obliged to appropriately inform the data subject of this right, at no cost. The controller must then cease such processing within a reasonable period;
• Right to have their data rectified, blocked or erased where the data would not have been processed in accordance with the Data Protection Act; and
• Right to ask the data controller to reconsider any decisions based solely on automated processing (unless such decisions are taken in the course of entering into or performing a contract with the data subject, under certain conditions)

Our firm is well equipped to advise both on your rights as data subjects as well as your obligations as data controllers and/or data processors.

Transfer of personal data to third countries
A transfer of personal data to another country amounts to processing and as such must be notified to the Commissioner. No restrictions or other formalities apply in relation to transfer of personal data to EU/EEA countries and Non-EU/EEA countries which are from time to time recognised by the EU Commission to provide an adequate level of protection.

By way of derogation to the above, a transfer of personal data to a third country which does not ensure an adequate level of protection may be effected provided that:

1. the data subject has given his consent unambiguously to the proposed transfer; or
2. the transfer is necessary for the performance of a contract between the data subject and the controller or the implementation of pre-contractual measures taken in response to the data subject’s request; or

iii. the transfer is necessary for the conclusion or performance of a contract concluded in the interest of the data subject between the controller and a third party; or

1. the transfer is necessary or legally required on important public interest grounds, or for the establishment, exercise or defence of legal claims; or
2. the transfer is necessary in order to protect the vital interests of the data subject; or
3. the transfer is made from a register which according to laws or regulations is intended to provide information to the public and which is open to consultation either by the public in general or by any person who can demonstrate legitimate interest, to the extent that the conditions laid down in law for consultation are fulfilled in the particular case.

Where none of the conditions mentioned under (i)-(vi) above are met, a transfer of personal data to third countries that do not provide an adequate level of protection may still be effected through one of the below routes:

1. a) Standard Contractual Clauses (or ‘Model Clauses’) – standardized, non-negotiable data export agreements approved by the European Commission;
   b) Safe Harbour Agreement- intended for organizations within the European Union or United States which store customer data, the ‘Safe Harbour Principles’ are designed to prevent accidental information disclosure or loss. U.S. organizations subject to the jurisdiction of the Federal Trade Commission (FTC) or U.S. air carriers and ticket agents subject to the jurisdiction of the Department of Transportation (DOT) may opt into the Agreement; or
   c) Binding Corporate Rules – applicable to multinational entities of a conglomerate, for intra-group transfers and processing;
   Our firm is fully equipped with the knowledge and expertise to provide your business with comprehensive assistance with the regulation and other matters such as:

• design and implementation of Data Protection policies and procedures;
• notifying and liaising with the Commissioner;
• advice on your rights as data subjects and your obligations as data controllers or data processors;
• provision of training to managers, offices and company personnel;
• advice on the international transfer of data and drafting of Business Corporate Rules for your organization;
• design and implementation of screening policy when hiring new employees; and
• dealing with regulators and consulting on regulatory issues.