IP & Brexit - UK & European trade mark and design law
05 September 2016
In this article we address some common questions about how the UK's exit from the EU (Brexit) will impact on intellectual property rights, particularly trade mark and design rights.
Though the full implications of Brexit remain unclear at present, we will continue to monitor developments closely and will provide timely updates as soon as the legislative position is addressed by the UK and EU authorities.
Contact us with your 'Brexit' questions or concerns
Please do get in touch with any questions or concerns regarding IP and Brexit by emailing us at email@example.com.
What has changed?
It is important to know that currently there is no change to EU intellectual property rights or laws. In particular, the scope, effectiveness and enforceability of unitary EU-wide trade marks and designs remains the same, both within the UK and the other 27 member states. This will continue to be the case until such time as the UK actually leaves the EU, which will occur at the end of a period of negotiation likely to take at least two years.
Will D Young & Co be able to continue representing clients for EU trade mark and design matters and before the EU Intellectual Property Office (EUIPO)?
Yes. Nothing will change with respect to rights of representation for at least the next two years and we have already taken steps to ensure that we will continue to be able to represent clients before the EUIPO (formerly OHIM) following the UK's exit from the EU in due course. These include both the recent opening of our Munich office and ensuring that our attorneys and solicitors are suitably qualified to act.
What will happen to existing EU trade marks?
Once the UK's departure from the EU has been finalised, existing EU trade marks (EUTMs) will no longer provide coverage in the UK.
In the meantime, EUTMs will continue to cover the UK. Although the position is unclear at present, we anticipate that appropriate legislation will be implemented to ensure that such rights continue to have effect in the UK, for example, by converting existing EUTM rights to UK national rights, enjoying the same priority or filing dates.
It is important to be aware, however, that where use of an EUTM takes place only, or predominantly, in the UK, such use is unlikely to support an EUTM against potential revocation in the longer term.
We would therefore encourage EUTM owners to review the territorial scope of their usage, with a view to making strategic supplemental national filings where appropriate.
What will happen to existing seniority claims in EU trade marks?
Any existing seniority claims in a EUTM based on national rights in the UK will cease to have effect from the date the UK exits the EU. All other seniority claims will remain unaffected.
EUTM owners are advised to keep any UK national right used in support of a seniority claim in force to ensure the best protection for the trade mark in the UK. Where UK national rights may have already been allowed to lapse following a seniority claim at the EUIPO, we anticipate that legislation will be implemented to ensure that the current EU rules for restoring a national right following the lapsing of a seniority claim will be followed, thereby bringing the lapsed UK national right back into force.
What will happen to international registrations based on an EU trade marks?
The validity of any existing international registration (IR) based on an EUTM will be unaffected by the UK's exit from the EU.
Once the UK does leave the EU, however, UK based companies looking to file new IRs based on an EUTM will be required to prove they have a real and effective commercial establishment in an EU member state in order to rely on the EUTM as a base mark for the IR.
If a UK company cannot fulfil this requirement, UK companies looking for protection in the EU via the IR system are advised to first file a UK application and use this as a basis for the IR, designating the EUTM.
What will happen to international registrations designating a EU trade mark?
Any existing IR designating a EUTM will most likely need a separate UK designation following the UK's exit from the EU; however, it is likely that legislation will be implemented to address this point, allowing conversion of the EU designation of the IR into a UK national designation, without loss of priority or filing date. Any new IRs filed after the UK's exit from the EU will need to designate both the EUTM and the UK in the IR in order to obtain full protection in these countries.
What will happen to existing Community design rights?
As with EUTMs, existing registered Community designs (RCDs) will no longer be effective in the UK after the UK's actual exit. Similarly, it is anticipated that transitional provisions will be introduced so as to provide for national UK registered designs to co-exist alongside residual RCDs.
After the UK's exit from the EU, Community unregistered design rights will cease to apply in the UK. Whilst there is already a separate UK national unregistered design right, this differs from the Community right in a number of respects. In particular, the UK right protects the shape and configuration of a product, whereas a Community unregistered design right covers the appearance of a product, including features such as colours, texture and ornamentation. The UK Government will therefore need to consider whether to legislate so that the national right is extended to include the additional features currently covered by the Community right, thereby closing the potential gap in protection.
What action should be taken in relation to existing registrations and new applications?
Until the UK actually leaves the EU, existing EUTMs and RCDs will remain fully effective and enforceable.
In terms of filing new trade marks or designs during this transitional period, however, we recommend filing both a EUTM or RCD application along with a separate UK national application. Doing this will provide greater certainty in relation to long-term protection in the UK, and may also avoid the need to convert EUTMs in due course. In addition, we advise continuing to maintain any UK national registrations which may already exist.
Will IP contracts such as EU-wide licences be affected?
We recommend conducting a review of any IP-related agreements, such as licensing arrangements, which involve EUTMs, RCDs or where the territory is specified as the EU. Unless the agreement expressly deals with the prospect of countries leaving the EU (which is unlikely), the issue of whether a particular agreement will still cover the UK post-Brexit will be open to interpretation. In general, unless there is anything in the contract to contradict it, it is likely that such agreements (where English law is the governing law of the contract) would be construed as still including the UK, on the basis that the parties intended to include the UK at the time of entering the contract. It is important to note, however, that the position for any given contract will always depend on the circumstances of the particular agreement in question, hence the importance of reviewing such contracts, taking specific advice and potentially entering variation agreements if required.
To what extent will the principle of 'exhaustion of rights' continue to apply to trade marks and designs?
At present, once goods have been put into circulation in the European Economic Area (EEA) by or with the consent of the rights holder, the relevant trade mark and design rights are said to be 'exhausted' and the rights holder cannot prevent further free movement of the goods within the single market (unless there are legitimate reasons such as a change in condition of the goods).
The extent to which exhaustion of rights will continue to apply to the UK will largely depend on whether or not the UK remains a member of the EEA (which currently includes all member states of the EU, as well as Iceland, Liechtenstein and Norway). However, if the UK leaves the EEA or if the UK Government takes a restrictive view on international exhaustion, it is possible that rights holders may be able to restrict imports coming into the UK from the EU, and vice versa.