In recent months, companies and governments have started to take concrete action to prepare for a “no deal” Brexit. Governments have hired thousands of additional customs officials, car manufacturers have begun stockpiling parts, and airlines are applying for new licences to avoid flights being grounded on March 30, 2019. A “no deal” Brexit refers to the UK abruptly leaving the EU on March 29 with no agreement in place as to the future relationship between the UK and EU.
Against this background, it is clear that significant resources are now being devoted to guarding against the effects of a disorderly Brexit. So what steps should be taken by trade mark owners and applicants to avoid being disadvantaged if the EU and UK fail to reach a deal?
The UK government has this week published a series of papers dealing with IP in the event of no deal (trade marks and designs, patents, copyright, exhaustion of rights). The aim in all cases is to ensure continuity of protection. However, we believe that pitfalls exist for some trade mark applicants and that, with six months left until the UK may abruptly leave the EU, any new filings made in Europe need to cater for this possibility.
If your trade marks are already protected as EUTM registrations on March 29, 2019
This is the best position to be in. The UK, while not spelling out the details, has said that a new UK registration will be granted “with minimal administrative burden”, and EUTM owners will be notified of the new parallel UK registration. This suggests that no action, or very little action, will be required and that there will be minimal cost. Right holders should however be prepared for an administrative overhead in terms of the number of registrations being doubled overnight (i.e. one new UK registration for every existing EUTM registration), which will require new records and the tracking of new renewal dates.
If your trade marks are covered by a pending EUTM application on March 29, 2019
The UK government promises that applicants having a pending EU application may reapply to the UK office for up to 9 months (i.e. until December 29, 2019) and that any resulting UK application will have the benefit of the EU filing date, while also retaining priority and seniority claims.
So far, so good. But we suggest that that this is not the end of the story, and that prudent applicants should file a parallel UK application for any new EU filings. Recently filed EUTM applications may also benefit from a parallel UK filing. Our reasoning is as follows:
1. The ability to reapply will only exist if the EUTM application is pending on the date that the UK leaves. If the application has been refused and is no longer pending, then there appears to be no basis to refile in the UK and retain the filing date.
2. Average pendency times (from filing to registration at the EUIPO) are more than six months. Therefore, any new EUTM application will probably not be registered by March 29 next year. The choice (if one accepts that a no deal Brexit is likely) is between filing in the UK now, or filing in the UK after Brexit if you can (see point 1 above).
3. The number of EUTMs filed in a given six month period is higher than the UK normally receives in a full year. Therefore, we expect a flood of applications immediately after March 29, 2019 from applicants seeking to refile their EUTMs in the UK. Absent a major increase in resources, this will result in a large backlog starting in April 2019. By filing in parallel now, you will be ahead of a very long queue of applications.
4. There is no downside, assuming no deal, to filing sooner rather than later. The costs will be the same, and the legal certainty much greater.
Of course, if a deal is reached between the UK and EU in the next few months, and that deal is approved in Parliament in the UK (both far from certain propositions), then a parallel UK application will, in hindsight, appear to have been overly cautious, but still will not have disadvantaged the prudent applicant who is positioned strongly for any eventual Brexit scenario.
We nevertheless take the view that although a Brexit deal may be reached in the coming months, in terms of minimising risk and ensuring the best protection for your trade marks, it is prudent to make contingency plans now for the scenario where this does not occur. By doing so, you will be following the signals from EU governments and major companies that “no deal” is now a very realistic possibility for which concrete action should not wait. From a trade mark owner’s point of view this means filing parallel UK and EU applications from this point forward.
If you have a pending International (Madrid) TM application designating the EU
The official advice from the UK government acknowledges that there is legal uncertainty for Madrid applications which designate the EU only (and not also the UK). They say “The government will work, including with the World Intellectual Property Organization, to provide continued protection in the UK after March 2019 of trade marks and designs filed through the Madrid and Hague systems and which designate the EU.” No guarantees are offered as to how this continued protection will be provided, and the answer appears dependent on designing a new mechanism with the co-operation of the WIPO.
Given that users of the Madrid system already have the option of individually designating the UK in parallel to the EU, it is our strong advice that applicants should now designate both the EU and UK for any new International applications, in order to avoid a potential loss of rights if no satisfactory solution can be found.
Applicants based in the UK should also be aware that under the Madrid system, an international application can only be based on a “home” application. Currently a UK domiciled company can rely on either an EUTM application or a UK application as the basis for filing an international application. After Brexit, such companies will lose the required connection with the EU, and will only be able to base their international filing on a domestic UK application (assuming they have no other presence in the EU that would allow them to claim a connection with the EU). Such companies, if they intend to rely on the Madrid system after Brexit, should now be putting the foundations in place by filing at the UKIPO as their “home” application.
Given that any new EUTM applications are likely to be pending if Brexit occurs in March 2019, now is the time to take action and avoid a negative outcome from a possible “no deal” Brexit.