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Legal framework

Domestic law

What is the primary legislation governing trademarks in your jurisdiction?

The Trademarks Act 1994, which implements the EU Trademarks Directive (2008/95/EC).

International law

Which international trademark agreements has your jurisdiction signed?

The United Kingdom is a signatory to:

  • the Paris Convention for the Protection of Industrial Property of 1883;
  • the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 1957;
  • the Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks 1973;
  • the Madrid Protocol of 1989;
  • the Agreement on Trade-Related Aspects of Intellectual Property Rights, which came into effect on January 1 1995; and
  • the Trademark Law Treaty of 1994.

Regulators

Which government bodies regulate trademark law?

All legislation in the United Kingdom is made and regulated by Parliament. The law is enforced and interpreted by the UK courts.

The UK Intellectual Property Office (UKIPO) is the official government body responsible for IP rights in the United Kingdom. The UKIPO is responsible for IP policy, supporting IP enforcement and granting registered IP rights, including trademarks.

Rights and protection

Ownership

Is ownership of a trademark in your jurisdiction determined on a first-to-file or first-to-use basis?

A person who is the first to file a trademark at the UK Intellectual Property Office (UKIPO) is deemed to be the registered owner. However, the existence of an earlier trademark – which includes rights in earlier unregistered trademarks – provides grounds for the refusal of a trademark registration.

Unregistered trademarks

What legal protections are available to unregistered trademarks?

The common law tort of passing off.

How are rights in unregistered marks established?

Passing off protects a business conducted by reference to a mark or ‘get up’. The owner must therefore show goodwill in a business under the mark.

Goodwill is more than just mere reputation, it has been stated to be “the attractive force which brings in custom” and is evidenced by actual trade and customers in the jurisdiction. Business conducted overseas under the mark with no UK customers will not generate goodwill, even if the mark is known in the UK. 

Are any special rights and protections afforded to owners of well-known and famous marks?

Section 56 of the Trademarks Act 1994 gives effect to Article 6bis of the Paris Convention. Protection is provided to the owner of a well-known mark, no matter whether that person carries on business or has any goodwill in the United Kingdom. This is in contrast to the requirements for establishing passing off where goodwill by way of actual customers in the United Kingdom, is a fundamental requirement.

To constitute a well-known mark, the mark must be well known in the United Kingdom as being the mark of a person who is a national of a Paris Convention country (the Paris Convention is the 1883 convention and any revisions or amendments to it and all members of the Agreement on Trade-Related Aspects of Intellectual Property Rights are included).

The owner of a well-known mark can restrain the use in the United Kingdom of a trademark, which – or the essential part of which – is identical or similar to its mark in relation to identical or similar goods or services, where the use is likely to cause confusion.

Unlike passing off, there is no requirement that the use of the mark complained of has damaged or is likely to damage the owner of the well-known mark. The owner of the well-known mark is only able to seek injunctive relief for the mark’s infringement; it is not entitled to claim damages or an account of profits.

To what extent are foreign trademark registrations recognised in your jurisdiction?

Trademarks are territorial rights. Therefore, a foreign national right (eg, a US trademark registration) has no legal effect in the United Kingdom, unless it constitutes a well-known mark.

EU trademarks have effect in each of the 28 member states of the European Union. The arrangements concerning the United Kingdom’s exit from the European Union are still being negotiated, but it is clear that once the United Kingdom leaves, an EU trademark will no longer have effect in the United Kingdom. It is assumed that there will be transitional arrangements to allow existing EU trademarks to be reproduced on the UK register as UK marks post-Brexit.

Registered trademarks

What legal rights and protections are accorded to registered trademarks?

The owner of a registered trademark has exclusive rights to the trademark, which are infringed by the use of the trademark in the United Kingdom without its consent according to Section 9(1) of the Trademarks Act 1994.

The owner of a registered trademark may therefore prevent others from using its mark in the course of trade in the United Kingdom, in any way that is contrary to its exclusive rights (ie, in any way that affects one of the relevant functions of the mark).

The circumstances in which a trademark may be infringed are set out in Section 10(1) to 10(3) of the Trademarks Act. These circumstances include:

  • where the marks are identical and the goods and services are identical;
  • because the marks are identical and the goods and services are similar or the marks are similar, and the goods and services are either identical or similar, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trademark; and
  • where the earlier mark has a reputation in the United Kingdom and the use of an identical or similar mark in respect of any goods or services whether identical, similar or dissimilar takes unfair advantage of, or is detrimental to the distinctive character or repute of the earlier mark without due cause.

Infringing acts include:

  • affixing the sign to goods or packaging;
  • offering, exposing for sale, putting on the market or stocking goods for these purposes under the sign, or offering or supplying services under the sign;
  • importing or exporting goods under the sign;
  • using the sign on business papers or in advertising; and
  • using the sign in comparative advertising contrary to the relevant directive.

Who may register trademarks?

Any natural person or legal person capable of owning property in its own name may apply to register a trademark (eg, a registered company, limited liability partnership, partnership, trust or club).

If the trademark applicant is not based in the United Kingdom, the European Economic Area or the Channel Islands, it must appoint a representative to act on its behalf.

What marks are registrable (including any non-traditional marks)?

To be validly registered, a trademark must consist of a ‘sign’, which can be represented graphically and is capable of distinguishing the goods and services of one party from those of another.

Both traditional (word and logo marks) and non-traditional trademarks (colours, smells, sounds, three-dimensional shape marks, movement marks or holograms) can be registered. However, it is often more difficult for non-traditional marks to satisfy registration requirements.

Can a mark acquire distinctiveness through use?

Yes, distinctiveness must be acquired across the full range of goods or services for which registration is sought – or a registration is sought to be maintained. The mark must acquire distinctiveness throughout a significant part of the United Kingdom.

Evidence to show acquired distinctiveness includes:

  • the market share held by the mark;
  • the geographic extent of use;
  • the amount invested in promoting and advertising the mark; and
  • how longstanding the use of the mark has been.

On what grounds will a mark be refused registration (ie, absolute and relative grounds)?

A trademark may be refused registration on either or both absolute and relative grounds. However, the UKIPO will not refuse marks ex officio on relative grounds – refusal on relative grounds requires a third-party opposition or cancellation action.

The absolute grounds for refusal of registration are:

  • the sign does not satisfy the requirements of registration;
  • the mark is devoid of distinctive character;
  • the mark is descriptive – (ie, it designates the kind, quality, quantity, intended purpose, value, geographical origin, time of production, or other characteristics of goods or services); and
  • the mark has become generic to the trade.

The last three of the above absolute grounds may be overcome by a finding that the mark has in fact acquired distinctiveness through use.

There are additional absolute grounds of refusal that are applicable to shape marks only. These provide that an applicant cannot register a mark that consists exclusively of the shape which:

  • results from the nature of the goods themselves;
  • is necessary to obtain a technical result; and
  • gives substantial value to the goods.

A trademark will also be refused on absolute grounds if, among other things:

  • it is contrary to public policy or accepted principles of morality;
  • it is of such a nature as to deceive the public;
  • its use is prohibited in the United Kingdom by any enactment, rule or provision of law; and
  • the mark consists of a specially protected emblem (eg, the royal crown or coat of arms).

It is a requirement of registration that the applicant has an intention to use the mark. The absence of an intention to use may amount to bad faith.

The relative grounds for refusal of registration mirror the provisions dealing with trademark infringement. Therefore, they enable an owner of an earlier mark to prevent the registration of a sign when use of that sign would impinge upon the earlier owner’s rights.

The definition of what constitutes an ‘earlier trademark’ includes:

  • an earlier UK or EU registered trademark or application;
  • an earlier international registration designating the United Kingdom or the European Union; and
  • a well-known mark protected under the Paris Convention.

Earlier rights in passing off or copyright may also be relied on.

Are collective and certification marks registrable? If so, under what conditions?

Marks that designate the geographical origin or quality of goods can be registered in the United Kingdom as certification or collective marks. Certification marks indicate that the goods or services sold under them meet certain standards. Collective marks distinguish the goods or services of a group of companies or members of an association.

The examination of certification and collective marks consists of two distinct phases. First, the initial examination of the application itself, which includes an assessment of the mark’s inherent acceptability under both absolute and relative grounds.

Second, there is an examination of the regulations that govern the use of the certification or collective mark. These regulations need to be clear and accessible so that anyone intending to make use of the mark can easily access the relevant information.

Filing and registration

Filing procedure

Do agents filing for registration of a mark on behalf of the owner require power of attorney? If so, is notarisation or legalisation required?

Not applicable.

What information and documentation must be submitted in a trademark registration application?

The following information must be submitted in a trademark registration application:

  • confirmation of who is filing the application – the representative or owner;
  • the applicant name and address and where a company or limited liability partnership, the country of incorporation;
  • details of the trademark and, where relevant, a jpeg of the logo or device;
  • confirmation of whether or not the application is for a series mark;
  • details of the goods and services;
  • details of any disclaimer; and
  • details of any priority claim.

What rules govern the representation of the mark in the application?

It is a requirement of filing that there is a representation of the mark on the application form. The mark must be represented graphically and this representation cannot be replaced by a description of the mark.

Marks can be filed as:

  • word marks;
  • figurative marks;
  • three-dimensional marks;
  • sound marks;
  • colour marks;
  • holograms; and
  • within the category of ‘other marks’, which includes animated marks or position marks (a sign positioned on a particular part of a product).

Marks can be filed in black and white or in colour.

It is possible to file a series mark with a maximum of six items in the series. A series of marks means a number of trademarks which resemble each other as to their material particulars and differ only as a matter of non-distinctive character which would not affect the identity of the trademark.

Are multi-class applications allowed?

Yes.

Is electronic filing available?

Yes.

What are the application fees?

To file online:

  • £170 for one class of goods or services; and
  • £50 per extra class.

To file on paper:

  • £200 for one class; and
  • £50 per extra class.

Priority

How are priority rights claimed?

A person who has filed a trademark application for protection in a country that is a party to the Paris Convention has a right of priority for a period of six months from the date of filing. This means that if – within that six month period – the person files an application to register the same trademark, that application’s filing date claims priority from (ie, is deemed to be the same as) the filing date of the initial application. A priority claim can relate to all the goods or services covered by the application or a selection of them.

For a UK trademark application claiming priority from an earlier filed mark, the priority claim must be made at the same time as the application for the UK trademark.

Searches

Are trademark searches available or required before filing? If so, what procedures and fees apply?

Searches are available, and while recommended, are not a requirement.

The type of searches can vary from simple quick searches of the UK Intellectual Property Office (UKIPO) and EU Intellectual Property Office (EUIPO) online databases (eg, to identify identical marks) to in-depth full clearance searches. There is no official fee for carrying out a search on the UKIPO or EUIPO online register.

The cost of a full clearance search will vary depending on the level and detail of search required.

UK clearance searches may also include common law searches to ascertain whether there are potential obstacles to registration and use posed by the use of identical or similar marks. While these are not exhaustive, they are valuable and recommended.

Examination

What factors does the authority consider in its examination of the application?

The authority considers:

  • whether the necessary administrative and procedural requirements have been complied with; and
  • the absolute grounds.

Does the authority check for relative grounds for refusal (eg, through searches)?

The registrar will carry out a relative grounds search and identify earlier registered trademarks, which it considers to be confusingly similar to the application but will not refuse registration on the basis of the searches. The earlier marks are included in the examination report to which an applicant is given the opportunity to respond; to avoid or argue against the requirement that the registrar notify the owner of the earlier rights. Of course, even if the owners of the earlier rights are not notified of an application by the registrar they may still be aware of it through watch services.

Therefore, objections on relative grounds may only be raised at the opposition stage by third parties.

If the authority raises objections to the application, can the applicant take measures to rectify the application? If so, what rules and procedures apply?

Yes, the applicant is given the opportunity to make representations to the registrar or amend the application.

Failure to respond will result in the refusal of the application. Generally, there are discussions with the examiner as to the possibilities for resolving the objection by – for example – amending the application or filing evidence to show distinctiveness.

Any amendment must not substantially affect the identity of the trademark or extend the goods or services covered by the application. However, obvious errors may be corrected and the specification of the application can be limited.

Can rejected applications be appealed? If so, what procedures apply?

Rejected applications for UK trademarks can be appealed to the High Court or to an appointed person – for example, an experienced IP practitioner appointed by the lord chancellor to hear appeals under the Trademarks Act 1994.

The appeal process is not a complete rehearing, but rather a review of the decision of the registrar. To succeed the appellant must demonstrate that there was a distinct and material error of principle or that the registrar was clearly wrong. It is not open to the appeal tribunal to substitute its own view in the absence of these principles.

Appeals to the appointed person are generally less formal and less costly and can – if the parties agree – be made on paper.

If a party wishes to appeal to the court, the procedure involved is set out in the detailed rules of procedure applicable to the court. It is a more formal process and likely to be more costly than an appeal to the appointed person.

If the appointed person hears and determines the appeal his or her decision is final. The appointed person may refer the appeal to the court to be heard instead if it appears to him or her that a point of general legal importance is involved.

Decisions of the High Court may be appealed to the Court of Appeal with permission. Permission is granted only provided that:

  • the appeal has a real prospect of success,
  • the appeal raises an important point of principle or practice, or
  • there is some other compelling reason for the appeal to be heard.

Registration

When does a trademark registration formally come into effect?

A trademark, once registered, formally comes into effect as at the filing date of the application.

What is the term of protection and how can a registration be renewed?

A mark is protected for 10 years from its application date, renewable indefinitely for further 10-year periods.

UK trademark registrations are renewed through the UKIPO by either the owner or its representative filing the necessary form and paying the renewal fee.

What registration fees apply?

No registration fees are payable on top of the application fee.

The official renewal fee is £200 for the first class and £50 for each additional class.

What is the usual timeframe from filing to registration?

Provided that there are no objections or oppositions, it takes approximately four months from filing (ie, the date the application is submitted) to registration.

Opposition

Can third parties formally oppose an application? If so, on what grounds and what rules and procedures apply?

Anyone can oppose an application on absolute grounds, but only the owner of an earlier trademark or other earlier right may oppose on relative grounds. An opposition may relate to all the goods and services covered by the application, or only some of them.

Procedurally, the opponent sets out why he or she objects to the application in a notice of opposition and statement of grounds; the applicant replies by filing a defence and counter-statement. Each party then has the opportunity to file one or more rounds of evidence. Decisions may be made on the papers (where legal argument is submitted in writing by the UKIPO) or at an oral hearing (at the parties’ option, this is generally only used for more complex matters).

What is the usual timeframe for opposition proceedings?

It takes two years to reach an initial decision. This timeframe can be extended considerably if the parties enter into a cooling-off period in an attempt to settle the opposition.

Are opposition decisions subject to appeal? If so, what procedures apply?

UKIPO opposition decisions can be appealed to the appointed person or to the High Court.

The relevant procedure is set out in the Trademark Rules (2008) and the detailed rules of procedure applicable to the court respectively. In summary, the appellant party is required to file a notice of appeal and statement of grounds. The respondent can either choose to do nothing – if he or she is satisfied with the decision – or file a respondent’s notice explaining why the decision should be upheld for additional or different reasons to those of the decision.

Removal from register

Non-use cancellation

Can a mark be cancelled for non-use? If so, what term of non-use applies and what is the procedure for cancellation?

A UK trademark can be revoked if it has not been put to genuine use for a continuous period of five years and there are no proper reasons for non-use.

A non-use revocation action can be made at any time after the trademark has been registered for at least five years. The application is made to the UK Intellectual Property Office (UKIPO) and can be brought by any third party. The action can apply to the entirety of the mark’s specification, or a selection of the goods or services only.

In order to prove genuine use the trademark owner must show actual use of the mark which is more than merely token (ie, simply to preserve the registration). The use must be by way of real commercial exploitation of the mark in connection with the goods and services and must be consistent with the essential function of a trademark – to guarantee the origin of the goods or services to the end consumer.

Proper reasons for non-use are those outside of the control of the trademark owner (eg, export or legal restrictions).

Revocation

On what grounds can a trademark registration be revoked (eg, loss of distinctiveness, incorrect registration)?

A registered trademark can be revoked in the following circumstances:

  • the absence of genuine use;
  • where the mark has become ‘generic’ (ie, the mark has become the common name in the trade for the goods or services for which it is registered); and
  • where the mark has become likely to mislead the public.

In addition, a registered trademark can be declared invalid on either absolute or relative grounds. An application may be made in respect of the entire registration or only specific goods or services.

A declaration of invalidity means that the registration was deemed to have never been made. An order for revocation takes effect from the date of the application for revocation or earlier if it is deemed that the grounds for revocation existed at an earlier date. 

Who may file a request for revocation and what is the statute of limitations for filing a request?

A revocation action may be brought by any party. Where the action is based on the absence of use, it may only be brought when the mark has been registered for five years.

An invalidity application can be made at any time after the mark’s registration.

If a UK mark was published before October 1 2007, anyone can apply to have it declared invalid on either absolute or relative grounds. If the trademark was published after October 1 2007, anyone can apply to have it declared invalid on absolute grounds, but only the owner or licensee of an earlier trademark can apply on relative grounds.

However, where the owner of an earlier right has acquiesced (ie, been aware of the use but taken no action) in the use of a later trademark for five successive years, it is no longer entitled to file an application for invalidity on relative grounds.

What are the evidentiary and procedural requirements for revocation proceedings?

An applicant for revocation must file the necessary form and pay the relevant fee at the UKIPO, which currently costs £200.

In cancellation proceedings – either revocation or invalidity proceedings – the burden of proof lies with the person making the attack on the mark. They are required to prove the grounds of invalidity or revocation on the balance of probabilities, which is the normal civil standard. The only exception is in revocation proceedings for non-use, where the burden of proof lies on the owner of the registered mark.

In invalidity proceedings, where the owner of the registered mark is able to defend an invalidity attack on absolute grounds by relying on the mark’s acquired distinctiveness, then the burden of proof rests on the owner.

Appeal

What is the appeal procedure for cancellations or revocations?

For UK trademarks, in proceedings either party can appeal the decision of the hearing officer to the appointed person or directly to the High Court. 

Surrender

What is the procedure for surrendering a trademark registration?

The owner sends a notice of surrender – in the prescribed form – to the registrar. Surrender can be either full or partial (ie, limited to some of the goods or services only.)

The notice must give the name and address of any person who has a registered interest in the mark (eg, a licensee) and certifies that any such person:

  • has been sent not less than three months’ notice of the owner’s intention to surrender the mark; or
  • is not affected; or
  • if affected, has consented.

Once the notice has been served the registrar publishes the surrender in the register and it takes immediate effect.

Enforcement

Jurisdiction

Which courts are empowered to hear trademark disputes?

Claims for UK trademark infringement can be made to the Chancery Division of the High Court, the Intellectual Property Enterprise Court (IPEC) and county courts with Chancery district registries.

These courts are also designated EU trademark courts and are therefore also able to enforce EU trademarks which are infringed in the United Kingdom and are able to grant EU-wide relief. When sitting as EU trademark courts, the courts apply the EU Trademark Regulation, supplemented by national law where appropriate.

Actions

What actions can be taken against trademark infringement (eg, civil, criminal, administrative), and what are the key features and requirements of each?

Civil proceedings for trademark infringement can be brought to the High Court, the IPEC and county courts with Chancery district registries.

IPEC  This is the specialist IP court. Cases are suitable for the IPEC where the issues are focused and can be dealt with at a short trial (usually up to two days). Damages are capped at £500,000 and costs recovery limited to £50,000.

High Court This route is suitable for more complex cases. There is no limit to trial duration – within reason. The loser pays a proportion of the winner’s costs. However, costs budgets must be exchanged unless damages are more than £10million

High Court – shorter trials scheme (pilot scheme) There is no cap on recoverable damages. Trials are limited to four days. Costs budgeting is not applicable.

Certain acts that constitute civil trademark infringement may also be deemed to be a criminal offence. These are primarily aimed at preventing counterfeiting and include:

  • applying an offending mark to goods, dealing in, or keeping such goods;
  • making use or keeping of packaging or documents bearing an offending mark; and
  • making or keeping articles designed for reproducing an offending mark.

Penalties for these offences include fines or prison terms.

A trademark owner may bring a private criminal prosecution instead of or as well as civil proceedings. However, where there is an issue over the validity of a trademark, any criminal proceedings would need to be stayed while the High Court or the UK Intellectual Property Office dealt with the validity action. 

Who can file a trademark infringement action?

The following entities can file a trademark infringement action:

  • the trademark owner; and
  • a licensee, but only in specific circumstances.

What is the statute of limitations for filing infringement actions?

The Limitations Act 1980 prevents any infringement action being brought before the English courts more than six years after the date of the infringement.

What is the usual timeframe for infringement actions?

Between one year and 18 months.

Injunctions

What rules and procedures govern the issuance of injunctions to prevent imminent or further infringement?

Injunctive relief may be either interim or final.

An interim injunction is sought where the matter is urgent to stop the defendant’s activities pending a final decision of the court. In general, when considering injunctive relief the court will consider:

  • whether there is a serious question to be tried; and
  • whether it would be appropriate, in the circumstances, to grant interim relief.

Factors that the court takes into account include:

  • whether damages would be an adequate remedy – an injunction will not be granted if the claimant can be compensated in damages;
  • the ‘balance of convenience’ – whether the hardship to the claimant in the absence of the injunction outweighs the hardship to the defendant from granting the injunction; and
  • to a lesser extent and if all considerations are finely balanced, the likelihood of success on the merits of the case.

A claimant awarded an interim injunction has an obligation to prosecute the case to full trial and must provide a cross-undertaking in damages to reimburse the other side if at the trial the interim injunction is found to have been incorrectly granted.

 A final injunction is granted at the end of a trial and is therefore directed at future infringement. In general, where a claimant’s rights have been infringed, a final injunction will be granted.

An injunction (interim or final) is an equitable remedy and is therefore granted at the discretion of the court.

Remedies

What remedies are available to owners of infringed marks? Are punitive damages allowed?

The following remedies are available to owners of infringed marks:

  • Injunctions – for example to cease the infringing activity.
  • Damages or an account of profits:
    • Damages are granted to restore the claimant to the position in which it would have been, had the infringement not been committed and are therefore not punitive. Damages for trademark infringement are generally calculated by reference to lost profits – the losses the claimant can prove it has suffered – or, if more appropriate, on a royalty basis (eg, the amount that would have been paid by a willing licensee for the use of the infringed trademark).
    • An account of profits is a discretionary equitable remedy, allowing a claimant to recover the profit received by the defendant as a result of its use of the claimant’s trademark.
  • Orders for erasure, removal or obliteration of offending signs from infringing goods, materials or articles.
  • Orders for delivery up and destruction of infringing goods, materials or articles.

Customs enforcement

What customs enforcement measures are available to halt the import or export of infringing goods?

Trademark owners can apply to Her Majesty’s Revenue and Customs by completing a National IP Rights Application for Action (AFA) to intercept goods coming into the United Kingdom, which are suspected of infringing their IP rights. The UK Border Force is entitled to seize such goods and arrange for their destruction, provided that the rights holder confirms the infringement and the holder of the goods has agreed to or not opposed the destruction.

Even when no AFA is in place, the UK Border Force may take ex officio action and seek to identify the infringed rights holder and invite them to file an AFA.

Procedures for the destruction of goods in small consignments also exist. This option enables counterfeit goods to be immediately destroyed at the rights holder’s expense without explicit consent on each occasion. 

Defence

What defences are available to infringers?

Provided the use of the trademark is in accordance with honest practices in industrial or commercial matters, a registered trademark is not infringed by the use of:

  • the defendant’s registered trademark – unless there has been acquiescence;
  • a person or a company of its own name or address – this will be restricted to personal names only following the implementation of the Trademarks Directive by July 2019;
  • indications concerning the kind, quality, geographical origin and other characteristics of goods or services;
  • the trademark where it is necessary to indicate the intended purpose of a product or services, in particular, accessories or spare parts; and
  • an earlier right in a particular locality. ‘Earlier right’ means an unregistered trademark or other sign continuously used in relation to goods or services. The earlier right most often relied on is the right to sue for passing off.

While not a defence per se, it is common for the alleged infringer to assert that the claimant’s mark should be cancelled for invalid registration or should be revoked.

Appeal

What is the appeal procedure for infringement decisions?

Decisions of the Intellectual Property Enterprise Court or the High Court may be appealed to the Court of Appeal and then to the Supreme Court. Decisions may only be appealed with permission.

Before the Court of Appeal, permission will be given only if the appeal:

  • has a real prospect of success;
  • raises an important point of principle or practice; or
  • there is some other compelling reason for the appeal to be heard.

Before the Supreme Court, permission is granted only for applications that raise an arguable point of law that is of general public importance.

Assignment and licensing

Assignment

What rules and procedures govern the assignment of trademark rights? Must an assignment be recorded to have legal effect?

UK registered trademarks and applications for registration of UK trademarks can be assigned by way of an assignment in writing signed by the assignor.

The assignment can be a simple contract or deed. It must be a deed if there is no consideration for the assignment or it contains the grant of a power of attorney. It is advisable to retain a reference to consideration in the assignment, because in the absence of consideration, the assignee will not be entitled to the remedy of specific performance should there be any legal defects in title to the rights – particularly where there is no recourse to a power of attorney.

Recordal of the assignment at the relevant registry is necessary to have the new owner of registered trademarks registered as such. If the new owner is not recorded as the registered owner within six months of the assignment date, and the new owner sues a third party for infringement, the owner will be prohibited from recovering its costs in respect of any infringement occurring before the recordal being made.

In the United Kingdom, an unregistered trademark is not a proprietary right in the same way as a registered trademark and therefore cannot be assigned except together with the goodwill of the business it attaches to.

Licensing

What rules and procedures govern trademark licensing? Must a licensing agreement be recorded to have legal effect?

To be legally effective, a licence of a UK registered trademark must be in writing and signed by or on behalf of the licensor.

There is no statutory requirement to register a licence of a UK registered trademark but there are various benefits of doing so. Subject to anything agreed to the contrary, the benefits of licensing include the following:

  • the licensee will have the right to bring infringement proceedings in default of action by the registered owner;
  • the licensee can request the owner brings infringement proceedings in relation to matters which affect the licensee’s interests;
  • exclusive licensees can bring infringement proceedings in their own name;
  • if registered within six months of the date of the transaction, costs in proceedings for any infringement which occurred before registration of the transaction can be claimed by the licensee (subject to certain exceptions); and
  • any third party acquiring rights over the mark is put on notice of the licensee’s interests and is prevented from claiming it acquired such rights free from such interests.

The general view is that the registration of a licence is also required to bind a licensee’s successor in title.

Licences can be registered by submitting Form TM50, signed by the licensor or accompanied by documentary evidence, to the UK Intellectual Property Office. Revocation or termination of a licence should also be registered using Form TM51. Submission of each form incurs a £50 fee.

In addition, the registration of any interest in a pending trademark application will only be entered on the register once the trademark is registered.

What provisions are typically included in a licensing agreement (eg, quality control clauses)?

Scope

A licence can be:

  • exclusive (only the licensee can use the mark);
  • non-exclusive (the licensee, licensor and any other third parties appointed by the licensor can use the mark); or
  • sole (only the licensee and licensor can use the mark).

The following questions should be considered:

  • Do the licensee’s group entities have a right to use the mark?
  • Is the licence limited to a specific territory, market or activity?
  • What is the duration of the licence?

When considering the scope of the licence, care should be taken to avoid infringing competition laws.

Licence fees Consideration may be structured as, for example:

  • a lump sum payment;
  • milestone payments (on achieving specific targets);
  • royalties (either at a fixed rate or calculated by reference to a percentage of sales made by the licensee); or
  • a combination of the above.

It is important to define carefully how the licence fee will be calculated and when payment falls due, and to include appropriate auditing rights over the licensee.

Quality control As well as compliance with applicable laws, the licence may require the products or services to comply with particular specifications – and the application of the trademark to meet brand guidelines – issued by the licensor. Should the licensor have the right to inspect and sample goods (eg, marketing materials and packaging), to ensure compliance?

Goodwill Goodwill derived from use of the trademark must accrue to the benefit of the licensor.

Ownership The licensor should be the owner of the trademark or have all necessary rights to grant the licence as a sub-licensee. An associated warranty over title is usually given. Additional provisions should be included restricting the licensee’s right to use or seek to register any similar or identical mark.

Enforcement The licensee should be under an obligation to notify the licensor of any potential infringements of the trademark. Whether the licensee has any rights to bring enforcement proceedings or whether these are reserved exclusively for the licensor should be stated.

Limitations on liability The parties may seek to have a financial cap on liability, or otherwise exclude certain types of loss such as loss of profits, indirect or consequential loss. Warranties or indemnities may be given in respect of infringement of third-party IP rights by use of the licensed rights.

Termination The licence should specify termination events, such as insolvency or breach of material terms of the licence, and set out what the consequences of such termination are; will the licence continue in respect of certain activities or will it cease with immediate effect?

Boilerplate The licence should include provisions for governing law, jurisdiction, ability to assign (if any) and any rights of third parties.

Security interest

Can a security interest be registered over a trademark? If so, what rules and procedure apply?

Registered trademarks and trademark applications can provide security by way of a mortgage or equitable charge, which can be fixed or floating.

A mortgage involves transfer in the title or assignment to the trademark on the express or implied condition that it will be re-transferred when the security interest is discharged. This transfer of title generally prevents the borrower from disposing of the trademark. An equitable mortgage will arise where the parties have entered into an agreement to create a legal mortgage in the future or where the formalities for assignment of the trademark under a legal mortgage have not been complied with (ie, in writing and signed by the assignor). A mortgage should be accompanied by a licence back from the lender allowing the borrower use of the trademark.

A charge over a trademark would avoid the need for such a licence as an equitable fixed charge does not involve a transfer in the title to the trademark. In respect of fixed charges, the lender will expressly require the borrower to maintain the trademark. A floating charge hovers over a shifting pool of assets or trademark portfolio until a specified event at which point the charge will crystallise. This enables the lender to take security without unduly restricting the borrower’s business, including the borrowers use and maintenance of the trademarks.

Once created, the security must be perfected by registration. Where the borrower is a UK company, the security must be registered at Companies House within 21 days of its creation. A security interest granted over a UK registered trademark should also be registered at the UK Intellectual Property Office. Until registration of the security interest is applied for, the security is ineffective against a third party who – without knowledge of the transaction – acquires subsequent conflicting interests in the relevant registered trademark (Section 25 of the Trademarks Act 1994). Therefore, registration is not necessary for validity of the security between the borrower and lender, but protects the priority of the lender.

If the company which owns the trademark is a foreign company, local law advice should be sought as to whether the charge needs to be registered in any other registries.

In the United Kingdom, an unregistered trademark is not a proprietary right and therefore cannot be charged except together with the business it attaches to, along with the goodwill of the business as a whole.

Related rights

Related IP rights

Can trademarks be protected under other IP rights (eg, copyright, designs)?

Where a trademark is a figurative mark (eg, a logo) it is also likely to be protected via copyright.

In some circumstances (eg, logo or shape marks) trademarks may also be protected as registered or unregistered designs, provided they comply with the validity requirements.

Online issues

Trademarks online and domain names

What regime governs the protection of trademarks online and domain names?

The use of trademarks online(eg, on a website) is afforded the same level of protection as if the trademark was used on physical goods or for the supply of services.

The infringement of a trademark via its use in a domain name can be addressed via trademark infringement proceedings before the courts. However, proceedings for domain name proceedings are commonly commenced under the Uniform Domain Name Dispute Resolution Policy (UDRP) – a dispute resolution procedure based on trademark rights and rights in unregistered names. A successful UDRP action will result in either the cancellation of the domain name or its transfer to the complainant.