How Will Trademarks Fare In A Brexit Crash-Out?
Brexit. Where do I start? This is the question I imagine is in the minds of most UK Cabinet Ministers as they flick their eyes open every morning, with the knowledge they are one day closer to D-Day – March 29, 2019. Whatever talk there is in the media of extensions and the like, the fact is that it is, at the time of writing, enshrined in legislation that Britain will leave the European Union (EU) with or without a deal on that date.
Whitehall is working around the clock, to prepare for Brexit; however, everyone, apart from hard-line Leave politicians (including the European Research Group (ERG)) believes the country is woefully equipped to deal with the full economic calamity that will overcloud the country following a no deal. However, the short term impact of a no deal Brexit may not be as bad as the media portrays; treaties will be signed to keep planes in the air and food on the shelves. It is the long-term consequences that the UK really must be concerned about. As one commentator put it:
“Instead, the EU’s response to a no deal will be strategic: opening up advantage, sector by sector, calmly and patiently dismantling the UK’s leading industries over the course of a decade. They will eat the elephant one bite at a time. The problem with abandoning the rules of the international order is that you no longer enjoy their protection.”
Among the many questions from increasingly seething business communities across the world is “what will happen to my trademark” should Britain leave the EU without a deal”?
Fortunately, this is one area where there is some clarity. The British government has released guidance on the state of play regarding trademarks should the UK suddenly find itself adrift in the ocean with only a shaky WTO life-raft to hold on to at the end of the month.
The current law around EU registered trademarks
EU registered trademarks are issued by the EU Intellectual Property Office and are governed by EU regulations, including Regulation (EU) 2017/1001 on the EU Trademark and Regulation (EC) No 6/2002 of 12 December 2001 on Community designs. A business, organisation or individual that owns an EU trademark or registered Community design (the right holder) has that right protected across all EU member states including the UK.
The effect of a no-deal on trademarks – the UK
In February 2019, the British government published draft regulations relating to EU intellectual property rights. Those regulations are namely The Trade Marks (Amendment etc.) (EU exit) Regulations 2018, The Designs and International Trade Marks (Amendment etc.) (EU Exit) Regulations 2019, and The Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018 (the “draft regulations”).
The draft regulations are expected to be in force by March 29, 2019. They will ensure that on Brexit day:
Any trademarks and community designs registered or protected in the EU will automatically be given the same enforcement rights and protections in the UK as if they were registered in Britain. Registration of the trademarks and community designs will happen over the coming months and there will be no fee payable or application required by the right holder.
The transferred trademarks will be known as “comparable trademarks” and “re-registered designs”.
Unregistered community designs will continue to be protected and enforceable in Britain and will be known as “continuing unregistered Community designs.”
The trademark or Community design will be treated as if it had been applied for and registered under UK law. Therefore, they will be subject to renewal in the UK, and can be protected and enforced by the UK Intellectual Property Office’s Tribunal and the courts.
A new unregistered design right known as the “supplementary unregistered design” will be created, which will cover designs disclosed after March 29, 2019.
All corresponding EU trademark and Community design rights registered in the UK will retain the same renewal date, priority, and claim to seniority as they had when originally filed with the EU Intellectual Property Office (EUIPO).
A right holder can opt out of having their EU trademark being given automatic protection and enforcement rights in the UK after Brexit under certain conditions.
The legal professional privilege of representatives of EU registered rights will be maintained in the UK, and they can continue to act as a representative in Britain.
Pending applications and proceedings
If an application for an EU trademark, International trademark (EU), Community registered design, or an International design (EU) is pending on March 29, 2019, it will not be given automatic UK registration on approval. However, the right holder can apply for the trademark or design right to apply in the UK within nine months of Brexit day. The filing dates and claims to earlier priority and UK seniority recorded on the corresponding EU application will be recognised if the application is filed within the timeframe. However, there will be a fee attached to the refiling of the application.
With regards to enforcement, if an injunction is in place to enforce the rights of a trademark or unregistered Community design in the EU, the injunction will continue to have the same effect and be enforceable in the UK as if it was a corresponding registered UK right or continuing unregistered Community design.
If infringement proceedings are to be brought in a UK court after Brexit, and those proceedings concern a registered EU right, or an unregistered Community design, the Court can grant an injunction to stop any unauthorized use of the mark or design within the UK. In the case of a counterclaim for revocation or invalidity of an EU trademark or unregistered community design right, the right of either can be revoked or declared invalid in the UK by the Court.
With regards to requesting UK customs authorities to prevent the transit of infringing goods, the British government has published a draft of The Customs (Enforcement of Intellectual Property Rights) (Amendment) (EU Exit) Regulations 2019.
The effect of a no-deal on trademarks – the UK
On January 18, 2019, the EUIPO published the “Impact of the United Kingdom’s withdrawal from the European Union on the European Union trademark and the Community design.”
The briefing states that from March 29, 2019:
The UK courts will no longer have jurisdiction to function as EU trademark (or Community design courts) and grant pan-EU injunctions with respect to EU trademarks and Community designs.
UK representatives who are not qualified to act a representative on trademark matters within the European Economic Area (EEA) will not be able to represent parties in EUIPO.
UK rights will no longer constitute grounds to oppose or invalidate EU trademarks after Brexit.
On March 8, 2019, the EUIPO has also published Impact of the UK’s withdrawal from the EU – EUTMs and RCDs.
The key points of the brief are:
The EUIPO will invite rights holders to appoint a representative, should this become necessary as the consequence of a “hard Brexit”, only where such a need actually occurs, for example, the right becomes subject to EUIPO proceedings.
Representatives who are not qualified to act in EUIPO proceedings will, on withdrawal day: (i) be removed from all files in EUTM and RCD related proceedings, (ii) deleted from EUIPO’s database of representatives (and, where applicable, from the Office’s list of professional representatives), and (iii) not be able to send mail in relation to a file through the EUIPO’s “UserArea”.
EUIPO to EUTM and RCD applicants, right holders and professional representatives outside pending proceedings before the Office will receive no individual notifications.
Both the EU and the UK have taken robust steps to ensure the continuity of trademark and Community design protection in the case of a ‘no-deal’ Brexit. As this situation is developing daily, we will keep you informed of any changes as they become known.