Date: 10 July 2018
With the UK set to leave the EU on 29 March 2019, and in light of the Draft Withdrawal Agreement, this article looks at the implications for Trade Marks and Design protection in the UK and the implications for the Trade Mark and Designs profession in the UK. Unless that draft withdrawal agreement turns out to be merely blue-sky thinking, trade mark law as applied by the English courts for EU marks and UK Marks will continue at least for the post-Brexit transition period. Articles 50-57 in Title IV of the Draft Agreement provides some much needed clarity regarding the impact of Brexit on EU-wide intellectual property rights in the UK, most notably, EU Trade Marks (“EUTMs”), registered Community Designs (“RCDs”) and unregistered Community Design rights (“UCDRs”) although as will be explained below, the “devil is in the detail”, which has still to be ironed out.
Article 121 of the proposed withdrawal agreement provides details of a transition period, starting from the UK’s exit from the European Union (occurring on 29 March 2019 at 11.00 pm, according to the latest European Union (Withdrawal) Bill) and ending on 31 December 2020. EU law will still continue to apply to the UK during this transition period. The transitional arrangements should lessen disruption and legal uncertainty caused by Brexit. However, we cannot be certain that the stated transition period will apply in practice because some issues remain to be agreed, and the agreement has yet to be ratified. The EU and the UK will not ratify the agreement until around the end of 2018 (possibly early 2019), and it would then have to be approved via primary legislation passed into law by the UK Parliament.
Under the current proposed withdrawal agreement, registered EUTMs, International Trade Mark and design registrations designating the EU and RCDs will continue in force in the UK until 31 December 2020. However, from 1 January 2021, these will cease to have effect in the UK. Similarly, UCDRs will continue in force in the UK until 31 December 2020, after which they will become an enforceable unregistered UK design right for the remainder of their three year period of protection.
It is clear that all EUTMs and RCDS will, by some means, and if required by the owner, essentially be converted to a corresponding UK right. However, the means of “conversion” has not yet been decided. There are a number of potential models for this conversion which the Chartered Institute of Trade Mark Attorneys are currently lobbying to invoke. Whilst it is clear that any rights registered or granted before the expiry of the transitional period will be “converted” into an equivalent UK right without re-examination, the situation for pending EUTMs and RCDs is less attractive. Article 55 of the draft Withdrawal Agreement has raised some concerns, specifically in relation to pending EUTMs and RCDs. Under Article 55, the owner of an EUTM or RCD still pending at the end of the transitional period will be entitled to file a corresponding UK application within 9 months from the end of the transition period. This new UK application will retain the filing date of the EUTM (and priority date if applicable). The obvious disadvantage is additional costs incurred by the Applicant in filing a UK application, however the reader should also bear in mind that further costs could be incurred through duplication of proceedings, such as oppositions against both the EUTM and UK application, as well as rights lost through failure to correctly monitor the 9 month re-filing period.
Similar considerations will also apply to International Trade Marks; the onus would now appear to be on the UK to take measures to ensure that protection continues although it is not clear whether this will be as a standalone national registration or a new UK designation of the International registration. It is also not expressly stated that there will not be any re-examination of these converted rights although we expect this to be the case.
For UCDRs the situation is more concerning. Currently a business or individual can benefit from both UK and EU unregistered design right. However, post-Brexit the concern is that as UCDRs will not cover unregistered designs in the UK unless they were first made available in the EU rather than the UK, this may put additional financial burden on individuals and smaller companies to enter into the EU market.
In light of the above, clients should check that appropriate definitions of the “European Union” have been used in co-existence, licence and other agreements. In addition, it is advisable to check for any disputes that could straddle the end of the transition period, such as EUIPO oppositions and cancellations that are in the cooling off period or are due to enter the cooling off period. If such actions are based on UK rights, it might be advantageous for the opposing party to ensure that the proceedings are completed before the end of the transition period. If a seniority claim has been made from a UK registration, clients should ensure that the UK registration does not lapse if protection in the UK is still required.
The good news is that UK trade mark registrations converted from EUTMs will not be liable to cancellation by third parties on the ground that the corresponding EUTM was not put to genuine use in the UK before the expiry of the transitional period. Therefore it would seem that re-filing is unnecessary. However, after the transitional period the usual rules for EUTMs (in Europe) and UKTMs will apply.
Based on the EUIPO’s speed of registration, the majority of routine EUTM, CD and International (EU) applications filed by 31 December 2019 should have been granted before the transition period expires on 31 December 2020 and will automatically convert into equivalent national UK registrations.
We therefore recommend that clients continue to file EUTM, CD and International (EU) applications as usual until at least December 2019. It is key to note that applications pending before the EUIPO will not be recognised in the UK after Brexit. Therefore, where there is a chance that a pending EUTM application might not proceed to registration before the transition period due to objections by either the EUIPO or third parties, clients should consider filing both an EU and UK trade mark. Therefore, from January 2020, it may be prudent to file both a national UK application and EUTM or designate both territories in an International application.
Even if all of EUTM registrations automatically have effect in the UK, there is likely to be some period of uncertainty before this takes effect. We would therefore recommend that clients consider re-filing their EUTMs in the UK, especially where the mark is a house mark or house logo, and therefore of high commercial importance.
As the reader will no doubt be aware, the question of whether the UK should rejoin the EEA (with all the requirements and commitments that this would entail), is currently the subject of much debate within the UK. Under the current rules of the EUIPO, professionals who are qualified in member states of the EEA are entitled to represent others before the EUIPO. If, therefore, the UK leaves the EU and does not rejoin the EEA, UK Chartered Trade Mark Attorneys will not be able to act before the EUIPO. As far as Maucher Jenkins is concerned, we are a pan-European firm with offices in Munich, Freiburg and Basel, as well as London and Farnham. Therefore, even in the event whereby the UK would not remain in the EEA, because of our strong presence in Germany, we would still be entitled to represent clients in EUTM and RCD matters and would be well-placed to generally continue delivering our services as usual, namely advise clients around the world regarding IP rights within and outside the EU.
Owners of “.eu” domain names who are based in the UK should take note of a subsequent document published by the European Commission on March 27 2018, entitled “Notice to stakeholders: withdrawal of the United Kingdom and EU rules on ‘.eu’ domain names”. This notice states that (subject to any transitional arrangements) all EU regulatory frameworks for the “.eu” top-level domain will no longer apply to the UK as of 31 March 2019. The likely practical consequences for UK- based proprietors of “.eu” domain names are as follows:
A period of uncertainty is clearly expected. However brand owners should, at this stage, continue to conduct “business as normal” with their usual filing strategies in place. Once we reach January 2020 a rethink will be necessary to ensure the correct protection is sought.
Proprietors of .eu domain names should review their domain name strategy and consider assigning ownership of any .eu domain names registered in the name of a UK-based individual or entity to an EU-based individual or entity. If that is not possible, then an alternative strategy would be to register another domain name now and re-direct traffic there, to keep website traffic running smoothly.