Impact of Brexit on protection of EU trade marks in UK
Negotiations over the terms on which the UK will leave the European Union on 29 May 2019 have reached a critical phase in the past week, with the EU having agreed to the wording of Theresa May’s withdrawal agreement. Press coverage has, understandably, focused on the impact of the various Brexit scenarios on key areas such as trade, access to the single market and immigration. There has, perhaps understandably, been less coverage on how Brexit might impact the rights of EU registered trade mark owners to continue protect their brand in the UK and EU Member States.
Worst case scenario – ‘no deal’ Brexit
A few months ago, the UK government published guidance (the “Guidance”) on how a ‘no-deal’ Brexit would affect the continued protection of EU registered trademarks (EUTM) in the UK, and applications to register EUTMs which are pending at the date of Brexit. This Guidance is part of a series of technical notices published by the government, intended to assist “businesses and citizens to understand what they would need to do in a ‘no deal’ scenario, so they can make informed plans and preparations.”
Currently, a business, organisation or individual that has protected its brand as an EUTM has exclusive rights to use and protect the brand across all EU member states, including the UK. The question facing many brands is whether their registered trade mark will continue to offer protection in the UK after Brexit, especially in the event of a ‘no deal’ scenario.
The Guidance explains in the event of ‘no deal’ scenario, the government will ensure that the property rights in all existing registered EUTMs will continue to be protected, and to be enforceable in the UK, by providing an equivalent trade mark registered in the UK. The Guidance suggests EUTMs will automatically be granted continued protection in the UK without re-examination and without additional charge. This new UK equivalent right will come into force at the point of the UK’s exit from the EU, and will then be treated as if it had been applied for and registered under UK law. According to the Guidance, this means these equivalent trade marks:
- will be subject to renewal in the UK;
- can form the basis for proceedings before the UK Courts and the UK IPO’s Tribunal; and
- can be assigned and licensed independently from the EU right.
Under the Guidance, rights holders will be notified that a new UK right has been granted.
While this new equivalent right appears reassuring, there are many questions which remain unanswered. For example, will the government only choose to recognise existing EUTMs for a finite period (e.g. up until the next renewal date), and then require the rights holder to take some positive action if they wish to maintain their rights, and pay a fee for re-registration?
Pending EUTM applications
The Guidance explains applications for an EUTM, which are ongoing at the point of the UK’s exit from the EU, will need to be refiled with the UK Intellectual Property Office (UKIPO) within nine months from the date of exit (i.e. by 29 December 2019), using the normal application process for registered trade marks. The UKIPO will recognise the EUTM application date as the filing date for the UK application. Applicants will need to meet the cost of refiling the application in accordance with the UK application fee structure.
International trade marks
As an alternative to applying for an EUTM, brands owners looking to protect their brand internationally may choose to apply for an international trade mark registration (ITM), under the Madrid Protocol. Although this is a supra-national treaty, Brexit is likely to have some impact on:
- ITM rights holders who have designated the EU as the territory where they wish to protect their trade mark, but have not separately designated the UK: Given the UK will no longer be part of the EU following Brexit, if the holder of such an ITM wishes to maintain protection for its ITM in the UK following Brexit, it will need to extend the scope of protection of its ITM to specifically include the UK.
- ITM applicants wishing to file a new ITM after Brexit, using an EUTM as the “home mark” for the application: As before Brexit, the applicant will still need to show that it has a real and effective industrial or commercial establishment in, is domiciled in, or is a national of, an EU Member State. This poses a problem for UK companies without a presence in Europe, and all UK nationals. They will need to file a UK trade mark (UKTM) and use that as their “home mark” for their ITM application instead. As the filing date of the ITM is not linked to the filing date of the “home mark” there will not be any disadvantage to simply filing a new UKTM rather than relying on an existing EUTM in terms of loss of an earlier filing date.
The Guidance contains very little detail on the impact of Brexit on ITMs, simply stating the government “is working, including with the World Intellectual Property Organisation, to provide for continued protection in the UK from exit day onwards” for ITMs.
What is the current deal on the table?
The draft Withdrawal Agreement, published by the EU in March 2018, sets out what the EU and UK have agreed in principle regarding the impact of Brexit on EUTMs:
- A transitional regime lasting until 31 December 2020, during which EU law will continue to apply in the UK: Under the draft Withdrawal Agreement, EUTMs would continue to apply in the UK and be recognised and enforced by the UK courts.
- Post December 2020: Under the draft Withdrawal Agreement, the holders of EUTMs registered before the end of the transition period would automatically be granted a comparable right in the UK. In practice, this would mean a trade mark consisting of the same sign, for the same goods or services. The date of filing or the date of priority, and the first renewal date, will be the same as that of the corresponding EUTM.
The Withdrawal Agreement between the UK and the EU is still to be successfully negotiated and ratified and there are many issues which need to be addressed, such as:
- Will the UK government require rights holders to take action after the first renewal date of the EUTM if they wish to maintain their rights thereafter, for example re-registering the EUTM as a UKTM?
- If re-registration is required, will there be a fee?
- How will challenges to EUTMs based on earlier UKTMs will be dealt with post Brexit? If the UK is no longer part of the EUTM system, it is feasible that challenges to EUTMs which are based on UKTMs would no longer be permitted and any pending challenges would be summarily dismissed.
Under the draft Withdrawal Agreement, the status of EUTM applications post Brexit appears to be similar to a ‘no deal’ scenario. Where there are existing applications for EUTMs in progress at the end of the transitional period, the applicant will have 9 months in which to file an application for an equivalent trade mark in the UK, using the same filing date as the EUTM application on which it is based. Where cancellation proceedings are in progress at the end of the transitional period, a subsequent decision holding the EUTM to be invalid will automatically apply to the equivalent UKTM that was created.
So what now?
Regardless of the outcome of the Brexit negotiations, it seems highly unlikely that EUTM proprietors will simply lose their protection in the UK following Brexit. However, where the UK is a key territory for brand owners who do not already have an equivalent, separate UKTM, the most risk averse course would be to file a UKTM now – at least in respect of any core marks – to ensure that registered trade mark protection in the UK is maintained regardless of what happens following Brexit. Hamlins are highly experienced in providing bespoke brand protection advice, and can help you navigate the uncertainties of Brexit to ensure the most cost effective protection strategy for your brand.