Brexit: The impact on trade marks and designs

Introduction

The UK left the EU on January 31, 2020, and is currently in the Brexit Transition Period. This will end at 11pm on December 31, 2020, – defined in legislation as “IP Completion Day”.

The expiry of the Transition Period on December 31, 2020, will impact the protection of trade marks and designs in the EU and the UK in many ways, and is set out in UK legislation to a large degree. Some key points are summarized below.

What happens to EU Trade Mark (EUTM) Registrations after IP Completion Day?

For every EUTM registration in force as at December 31, 2020, an equivalent UK “comparable” right will be created automatically on January 1, 2021. There will be no fee payable for this.

The UK comparable right will maintain the exact protection currently enjoyed by its “parent” EU registration in the UK. Specifically, the UK comparable right will:

• Be recorded on the UK trade mark register.
• Have the same legal status as if it had been applied for and registered under UK law.
• Keep the original EUTM filing date.
• Keep the original UK priority and/or seniority dates.
• Be a fully independent UK trade mark that can be challenged, assigned, licensed or renewed separately from the original EUTM.

The UK IPO will not issue any certificates of registration for UK comparable rights either in paper or in electronic form, but details of the new rights will appear on the UK IPO’s database. The UK IPO intends to publish a notice on its website advising the owners of EU registrations that they own comparable UK rights.

UK comparable rights will be slightly re-numbered – they will keep the last eight digits of their existing (EU) registration numbers, but the prefix “UK009” will be added.

Owners of EUTM registrations will have the opportunity to opt out of owning comparable UK rights in certain circumstances. However since these will expire in due course if not renewed, it is expected that absent any issues on use/potential non-use revocation or agreements restricting UK rights for example, the vast majority of brand owners will take a “passive” approach and simply accept UK comparable rights.

Examples of when it will not be possible to opt out are where the comparable UK right:

• Has been used in the UK.
• Has been assigned or licensed or is the subject of an agreement.
• Is the basis of litigation against a third party

Opt out requests will need to confirm that notice has been given to anyone with an interest in the UK comparable right (for example, a licensee). If the UK IPO considers that an opt out request has been exercised in circumstances where it was not allowed, it will be able to reinstate the UK comparable right.

What about Protected EU Designations of International Registrations?

It is important to note that UK comparable rights created from EU designations of International Registrations will not form part of an International Registrations after December 31, 2020, – instead they will be standalone UK national rights and so will need to be renewed independently of the International Registration they are based on. Specifically, each new UK right arising from a protected (ie registered) EU Designation of an International Registration:

• Will be treated as if applied for and registered under UK law.
• May be challenged, assigned, licensed or renewed separately from the original International Registration.
• Have the same filing date, priority date and registration date as the International Registration.
• Have the same renewal date as the International Registration.

UK comparable rights arising from protected (i.e. registered) EU designations of International Registrations will have the prefix “UK008”.

Owners of International Registrations will also have the opportunity to opt out of owning UK comparable rights in certain circumstances as noted above. Again however, since these will expire in due course if not renewed, it is expected that the vast majority of brand owners will take a “passive” approach and simply accept comparable UK rights unless there are concerns as noted above.

What happens to EUTM Applications after IP Completion Day?

Where an EUTM application is pending as at December 31, 2020, the owner of that EUTM application will have 9 months (ending on September 30, 2021) to “opt in” for an equivalent UK application, claiming the same filing / priority / seniority dates as the EU application.

The UK IPO will not send any notification of the right to opt in for an equivalent UK mark to the owners of EU applications, so this 9 month period will need to be monitored. The usual UK IPO fees payable for UK trade mark applications will apply, £170 for one class of goods or services, and £50 for each additional class, as well as attorney fees.

There could well be priority-type scenarios where equivalent UK applications which are opted in between January 1, 2021, and September 30, 2021, take precedence over new UK applications filed during the same period, because the former conform to EU applications with earlier pre-January 1, 2021, filing dates.

As an EU application filed now will not achieve registration by December 31, 2020, we advise that where an EU application is now filed, a corresponding UK application should also be filed, particularly if the UK is a key market. A UK application filed now will achieve registration more quickly than an equivalent UK application post-December 31, 2020.

EUTM applications which are currently pending should also be reviewed and consideration given to filing corresponding UK applications now if it is necessary to obtain a UK registration sooner rather than later, for example, for potential enforcement purposes, or if the UK is the home market, or ahead of a UK brand launch.

What about pending EU Designations of International Registrations?

Again, there will be a 9 month period (ending on September 30, 2021) for owners of pending EU Designations of International Registrations to “opt in” for equivalent UK applications, claiming the same priority / filing / seniority dates. Further filing fees will be payable.

Certification and collective marks

In line with conventional trade marks, the UK IPO will create UK comparable rights for all EU certification and collective trade marks registered at the EUIPO as at IP Completion Day.

However, the UK IPO will not automatically import, onto the UK register, the regulations governing use of the certification or collective EUTM when creating UK comparable rights, nor will the UK IPO request the registered owner to provide an English translation of the regulations (if not in English already) immediately after January 1, 2021.

Instead, the UK IPO will contact the owner of the UK comparable right if and when the regulations need to be inspected, for example if the UK comparable right becomes the subject of proceedings. At that point, an English translation will also be requested if necessary and if that is not filed, the UK comparable right will be lost.

Licences, security interests and assignments

Currently, any licences or security interests recorded against an EU registration will not automatically be recorded against the UK comparable right. Instead, the UK IPO will extend the period for recordal on the UK register by 12 months from January 1, 2021.

There are several reasons for this extended period – first, UK law does not require that licences and security interests be recorded, but doing so within 6 months of the transaction provides some rights/protection which are not available in the absence of recordal; and secondly, applications to record licences and security interests against UK comparable rights cannot be filed before those rights are created in any case.

On assignments: where an EUTM has been assigned before January 1, 2021, but the assignment has not been recorded on the EUIPO register, the UK comparable right will be granted in the assignor’s name. Both the assignor and assignee will be able to apply for registration of the assignment against the UK comparable right after January 1, 2021.

Interpretation of licences and other contractual agreements such as co-existence agreements referencing the EU as a territory, but not including the UK as a separate territory, is a complex area and we recommend that advice be sought on this, in the context of the licence/co-existence agreement, ahead of IP Completion Day. New agreements should refer to the EU and the UK as separate territories.

When do UK comparable rights need to be renewed?

EU Registrations with renewal dates on or before December 31, 2020

Where the renewal date of the EU registration falls on or before December 31, 2020, and the EU registration is renewed by that date, then the UK comparable right will not need to be renewed until the next renewal date – so, if the renewal date of the EU registration is November 30, 2020, and it is renewed by that date or by December 31, 2020, the UK comparable right will not be due for renewal until November 30, 2030, in line with the next renewal date of the EU “parent” registration.

If however the EU registration in the example above is not renewed by November 30, 2020, (or December 31, 2020), it will automatically result in a UK comparable right but with a status of “expired” and continued effect in the UK will depend on late renewal at the EUIPO during the 6 month grace period from the renewal date – so, by May 30, 2021, in the example above.

Where an EU registration due for renewal by December 31, 2020, is not late renewed, the UK comparable right (created on January 1, 2021) will be removed from the UK register when the corresponding EU registration expires, but with effect from January 1, 2021, – so, in effect, it will never be a UK comparable right.

EU Registrations with renewal dates between January 1, 2021 and June 30, 2021

Conversely, where the renewal date of the EU registration falls on or after January 1, 2021, a renewal fee will need to be paid to the UK IPO to maintain the UK comparable right. Specifically, where the renewal date of the UK comparable right falls between January 1, 2021, and June 30 2021, the UK IPO will send a renewal reminder to the owner on the actual renewal date of the UK comparable right (or as soon as practicable thereafter).

The reminder will state that the UK comparable right has expired and set a new 6 month period for renewal. In effect, this will be a late renewal period but the UK IPO are not intending to charge late renewal fees.

If the UK comparable right is not renewed during the 6 month period set by the UK IPO, it will be removed from the UK register but can be restored within the following 6 months if the conditions set by existing UK law are met.

The additional 6 months for renewal of UK comparable rights mean that the latter will be relevant throughout 2021, not least for clearance searches and oppositions.

Comparable UK rights that expire more than 6 months after January 1, 2021

The UKIPO will send a renewal reminder 6 months before the expiry date and normal UK renewal processes will apply.

EUTM registrations reinstated after January 1, 2021

EUTMs can, in certain circumstances, be reinstated if they have been struck off the EU register, typically for non-renewal in the case of registrations. However, UK comparable rights will only be created from EUTMs which are (actively) registered on IP Completion Day. This means that EUTMs not registered on December 31, 2020, but which could be reinstated will not give rise to UK comparable rights.

To address this and bearing in mind that reinstatement is possible only if an application is made to the EUIPO within 1 year of the missed deadline, EUTM registrations reinstated after January 1, 2021, and notified to the UK IPO will result in UK comparable rights. The UK IPO should be notified within 6 months of reinstatement.

Where pending EU applications are reinstated after January 1, 2021, and have a filing date pre-January 1, 2021, the owners will be allowed to file a UK trade mark application claiming the earlier EUTM filing/priority date. Such applications are to be filed within 9 months beginning with the date on which the corresponding EU application was restored to the EU register.

Conversion

An EUTM which is refused or withdrawn can be converted into a national UK right provided that the application for conversion is filed at the EUIPO within 3 months of the EUTM ceasing to have effect. The resulting UK trade mark has the same filing/ priority and seniority dates.

It is anticipated that on January 1, 2021, there will be some EUTMs which are within the 3 month conversion period. Any such EU registrations will not automatically give rise to UK comparable rights however but the UK IPO intends to allow conversion of EUTMs (registrations and applications) where an EUTM has been refused or withdrawn less than 3 months before January 1, 2021.

Requests for conversion into UK trade marks will be made by filing UK applications claiming the earlier filing/priority date of the refused or withdrawn EUTM.

What happens to pending EUTM oppositions?

An EUTM opposition based only on UK rights and pending on December 31, 2020, will fall away/conclude and the opposed EUTM will proceed to registration. If the owner of the EUTM opts in for an equivalent UK application between January 1, 2021, and September 30, 2021, that UK application will be published for opposition purposes in due course and could be opposed in the UK based on the same UK rights that formed the basis of the EUTM opposition. Watching services are likely to become of greater importance in such circumstances.

Where an EUTM opposition is based on UK rights plus an EUTM and/or a national trade mark in an EU member state, the UK rights will fall away and the EUTM opposition will continue based on the EUTM and/or national trade mark in an EU member state. Again, if the owner of the EUTM opts in for an equivalent UK application between January 1, 2021 and September 30, 2021, that UK application will be published for opposition purposes and could be opposed in the UK based on the same UK rights on which the EUTM application was opposed. Again, watching services are likely to become of greater importance in such circumstances.

An EUTM opposition based on another EUTM and/or a national trade mark in an EU member state will not be affected by Brexit but of course, the owner of the opposed EUTM application will be able to opt in for an equivalent UK application and that UK application could be opposed based on UK rights only.

What happens to pending cancellation actions against EUTM registrations?

Where an EUTM registration is subject to a pending revocation or invalidity action (collectively “cancellation action”) on December 31, 2020, including by way of a counter-claim, the EUTM will automatically become a UK comparable right, but:

• Where the cancellation is based on a UK right only, the EU action will fall away/conclude but a new UK cancellation action may be possible against the UK comparable right.
• Where the cancellation is based on a UK right and/or an EUTM and/or a national trade mark in an EU member state, the EU action will continue and a total or partial cancellation of the EUTM will equally apply to the UK comparable right,unless the grounds for cancellation do not apply in the UK – this contrasts with the position on EU oppositions which, as noted above, will fall away to the extent that they are based on UK rights. It also means that a separate cancellation action will not have to be filed against the UK comparable right resulting from the EUTM which is the subject of cancellation proceedings on IP Completion Day.

The UK IPO will not automatically be notified of cancellation actions applicable to UK comparable rights but will need to “receive notice” or “otherwise become aware” of such actions. Unsurprisingly therefore, it will be possible for any person to notify the UK IPO by way of a “cancellation notice” requesting equivalent cancellation of the UK comparable right, and attaching a copy of the decision cancelling the EUTM (including any decision determined on appeal) along with a statement that the decision has become final. The owner of the UK comparable right will be allowed to contest a cancellation notice by filing a “derogation notice” setting out why there should not be equivalent cancellation of the UK comparable right and filing supporting evidence.

Owners of EUTM registrations which are totally or partially cancelled may themselves file cancellation notices at the UK IPO as part of their portfolio management and in such cases, they should also file derogation notices and supporting evidence at the same time.

What about pending UK oppositions and pending cancellations based on EUTMs?

These will continue at the UK IPO (or UK courts) notwithstanding Brexit, based on the law as it applied prior to Brexit.

Use and reputation

UK law requires an uninterrupted period of 5 years’ non-use before a UK trade mark registration becomes vulnerable to nonuse revocation.

In the context of Brexit, use of an EUTM anywhere in the EU prior to December 31, 2020, will count as use of the UK comparable right.

Where the 5 year period includes time before IP Completion Day, use in the EU prior to December 31, 2020, will be relevant. In all cases (whether EU use is relevant or not), the 5 year period of suspended use is activated by the last use of the EUTM or UK comparable right.

The same considerations as set out above apply for reputation.

Community Designs

Community designs will be treated similarly to EUTMs. Please contact us if you would like further details.