Brexit: Trade marks and designs

Brexit will change the landscape of UK and EU trade mark and design portfolios. Rights’ owners need to be ready for its impact and takes steps to mitigate the effect by making sure existing UK and EU records are in order and put in train plans to streamline portfolios either ahead of the Withdrawal Date or, in the aftermath.

There is still a great deal of uncertainty around Brexit and, with the March 29, 2019 looming, we do not yet know if, a) the UK will reach an agreement with the EU regarding withdrawal terms ahead of March 29, 2019 so that the UK can withdraw with a deal and its transition period which is due to last until December 31, 2020 or, b) have the period for negotiating withdrawal extended beyond March 29, 2019 – which would necessitate the agreement of all 27 other Member States or, c) crash out of the EU without a deal at 11pm on March 29, 2019 or, d) reverse the decision to leave the EU. Although Parliament voted has voted to avoid a no-deal exit, this is not binding on the Government and we should prepare for possible exit at 11pm, UK time, on March 29, 2019 without a deal and therefore without a transition period.

The good news for owners of registered EU rights is that the withdrawal terms relating to trade marks and designs are unlikely to change and so there is already a good deal of certainty as to what will happen, even if the timetable is unclear, depending on whether there is a transition period or not.

The Withdrawal Date referred to in this document means 11pm, UK time, on March 29, 2019, subject to any transitional arrangement that may be contained in a possible withdrawal agreement.

Below we have set out ten points detailing what will happen and what to do, including in a no-deal scenario.

Registered EU trade marks

EU trade marks will cease to have effect in the UK after the Withdrawal Date. At that point, an equivalent “cloned” UK trade mark (UKTM) will be created on the UK trade marks register, leaving behind an EU trade mark covering 27 Member States.

The cloned UKTM will

• Be created automatically, without re-examination and free of charge. The owner of the right will be notified and have an option to opt out.
• Will have a prefix added to its EU number to indicate that it is a cloned registration.
• Be treated as if it had been applied for and registered under UK law.
• Have its filing, priority, UK seniority and renewal dates maintained.
• Be renewable via the UK Intellectual Property Office.
• Reflect any declarations of invalidity or revocation pursuant to EU proceedings.
• Not be liable to revocation on the ground that its corresponding EU trade mark had not been put into genuine use in the UK within the 5 years before the Withdrawal Date. Thereafter the continuing validity of the UKTM will be dependent on use in the UK.

No deal scenario: The position is as above but without a transition period, the timetable will move forward to March 29, 2019.

Pending EU trade marks

Pending EU trade marks will cease to have effect in the UK after the Withdrawal Date. At that point, the owner will need to refile in the UK, paying the relevant fees, and will have a window of nine months for doing so if the UK filing is to maintain the filing, priority and UK seniority dates recorded against the corresponding EU application. The EU application will go forwards covering 27 Member States.

No-deal scenario: The position is as above.

Registered community designs

Registered community designs (RCDs) will cease to have effect in the UK after the Withdrawal Date. At that point, an equivalent “cloned” UK registered design (UKRD) will be created on the UK trade marks register, leaving behind an RCD covering 27 Member States.

The cloned UKRD will

• Be created automatically, without re-examination and free of charge. The owner of the right will be notified and will have an option to opt out.
• Will have a prefix designation added to its EU number to show that it is a “cloned” registration.
• Be treated as if it had been applied for and registered under UK law.
• Have its filing, priority and renewal dates maintained.
• Be renewable via the UK Intellectual Property Office.
• Reflect any declarations of invalidity made pursuant to EU proceedings.

No-deal scenario: The position is as above but without a transition period, the timetable will move forward to March 29, 2019.

Pending community designs

Pending RCDs will cease to have effect in the UK after the Withdrawal Date. At that point, the owner will need to refile in the UK, paying the relevant fees, and will have a window of 9 months for doing so if the UK filing is to maintain the filing and priority dates recorded against the corresponding EU application. The EU application will go forwards covering 27 Member States.

No-deal scenario: The position is as above.

Unregistered community designs

Unregistered community designs (UCDs) which exist at the Withdrawal Date will continue to be protected and enforceable in the UK for the remaining period of protection of the right.

Designs which are disclosed after the UK exits the EU will also be protected in the UK under the current terms of the UCD right. To effect this, the UK will create a new unregistered design right in UK law which mirrors the characteristics of the UCD right. This new right will be known as the Supplementary Unregistered Design Right.

International trade marks and designs (protected via the Madrid and Hague systems) designating the EU

The above provisions will apply to international trade mark and design registrations protected in the EU. The EU designation will cease to have effect in the UK after the Withdrawal Date. At that point the rights will be “cloned” into standalone national UK rights, rather than UK designations of the International Registration.

Ongoing legal disputes involving EU trade marks or Registered community Designs

There is uncertainty where those proceedings are before the UK courts though we expect more information to be available before the Withdrawal Date. Proceedings before the EU Intellectual Property Office which are pending at the Withdrawal Date will continue through to completion with no change of representation required.

Exhaustion of rights

The UK is currently part of a regional European Economic Area (EEA) exhaustion scheme, meaning that IP rights are considered exhausted (i.e. the owner of the right loses the ability to control distribution and resale) in respect of a product once it has been placed on the market anywhere in the EEA by, or with the permission of the owner of the right.

The agreed position is that rights conferred by an intellectual property right which were exhausted, in the EU and UK, before the Withdrawal Date shall remain exhausted in the EU and UK.

No-deal scenario: the UK will continue to recognise exhaustion of rights in the UK and the remaining EU countries but no equivalent statement has yet been made by the EU. This means that businesses exporting goods from the UK to the EEA might need the rights owner’s consent.

Rights of representation – can UK nationals qualified as lawyers represent a party to proceedings before the EU intellectual property office after the Withdrawal Date?

Yes, a UK national who (i) is a legal practitioner qualified in one of the Member States of the European Economic Area (EEA) and (ii) is established in the EEA, and (iii) is entitled to act as representative in trade mark matters in that EEA Member State, can represent a party to proceedings before the EU Intellectual Property Office (Art. 120(1)(a) EU Trade Mark Regulation).

As noted above, applications or proceedings which are pending at the Withdrawal Date will continue through to completion with no change of representation required.

Actions to consider now

We recommend that businesses consider taking the following actions in preparation for Brexit

• Audit the trade mark and designs portfolio. In particular consider where cloned rights may not be required and consider whether opt-out is appropriate.
• Update and tidy up EU trade mark and design records i.e. service address, recordals of assignments, licences and security interests and make sure renewals are up to date. After the Withdrawal Date, where the records are not up to date, any errors or omissions will be carried over to the new UK rights.
• Review pending EU trade mark and design applications and, where possible, push for registration before Brexit (to avoid the time and cost of re-filing an application in the UK).
• With respect to licences (and recordals), consider whether the licences will still cover the UK/whether an amendment to the licence is required.
• Review agreements to check, in particular, jurisdiction, governing law and territory clauses; and how principles of exhaustion might impact upon the agreement.
• Consider whether there is use of the trade mark in the EU/UK; and whether an extension of use to the UK is required.
• With respect to current/proposed proceedings before the EU Intellectual Property Office, consider whether any challenge is based on a UK right (registered or unregistered). This will most likely not be a valid prior right after exit from the EU.