On 23 June 2016 the United Kingdom electorate took the historic decision in a national referendum that the country should leave the European Union. How will that impact EU trade marks (known until recently as Community trade marks)? Well, no-one really knows yet.
The decision to leave the trading block is a big step into the unknown. No country has ever attempted to withdraw from the European Union and there is no manual on how to do it. The referendum decision itself does not remove the UK from the EU. In order to do so, the UK government needs to file a notice of withdrawal with the EU under Article 50 of the Lisbon Treaty. This is expected to take place in the next few months. The future relationship of the UK with the EU will then be up for negotiations. The outcome of these negotiations will set in place a new settlement covering a wide range of trade (and other) issues. Article 50 allows two years for these negotiations to be concluded. When the two year period is out, whether with or without an agreement, the UK will no longer be part of the EU.
The UK will seek in these negotiations to conclude a new arrangement with the EU more or less along the lines of other countries that have a special relationship with the block (notably Switzerland). This will probably require the UK to maintain, as part of its domestic law, much of the current EU legislation, but will give the UK access to the important EU ‘single market’.
Intellectual property is a big part of trade relations. IP creates trade barriers between countries and one of the key purposes of the EU trade mark system is to support the single market and to help break down trade barriers between EU member states. The EU trade mark system also saves business a lot of money as it allows them to secure protection for their trade marks across the territories of the 28 member states of the EU under a single registration at a cost of a typical national trade mark.
However, the UK is unlikely to remain part of that system after it leaves the EU. The EU trade mark system relies on EU institutions (the EU Intellectual Property Office which examines applications and registers EU trade marks) and EU courts (the EU General Court and the Court of Justice of the European Union which take appeals from the EU IPO). The UK will have no part in these institutions and it would be inconsistent with the referendum results for the UK to submit to the jurisdiction of the EU courts (in which it would have no representation).
It is highly likely, therefore, that once the UK leaves the EU (probably sometime in 2018) EU trade marks will no longer cover the UK. Therefore, in order to secure trade mark protection in the UK it will be necessary to file trade marks in the UK alongside EU filings.
However, it would be an expensive and rather pointless exercise to require the owners of existing EU trade marks to re-register their rights in the UK. As the system currently works, an EU trade mark is protected and enforced in each EU member state as if it had been registered in that state. The UK, therefore, is likely to continue to protect EU trade marks that were registered before Brexit as if they were registered in the UK. This can be done easily through minor amendments to UK legislation and does not even require an agreement with the EU.
In 2003 the EU expanded to the Eastern European countries (and various other countries joined the EU over the years). When expansion took place, existing EU trade marks were automatically extended to the new member states, subject to conflicting rights already existing in the new member states which took precedence. An exit arrangement is even simpler. Existing EU trade marks can continue to be enforceable in a country leaving the EU as this creates no conflicts at all and requires no special agreements to be put in place.
Accordingly, whilst we can only speculate for now, the future arrangement is probably going to be the obvious one. The cut-off date will likely be the effective date of Brexit. EU trade marks registered before that date will probably continue to be protected in the UK as if they were UK registrations. Those that are filed after that date will have to be filed in the UK as well, in order to secure protection in the UK.
Arrangements would need to be put in place to deal with applications for EU trade marks that will be pending on the date of Brexit. One possible arrangement could be to allow such applications to be replicated as UK applications having the priority date of the EU application.
Leaving the EU will present some significant challenges to the UK and for businesses that trade across the UK and the EU. Much will depend on the outcome of negotiations over a new settlement. Trade mark protection, however, is not going to be one of the difficult issues. Simple arrangements can be made to ensure a smooth transition and post-Brexit there will only be a minor additional burden of filing new trade marks both in the UK and in the EU for businesses that seek protection in both regions.