Remember when you woke up and realised Britain had actually gone and done it? Don’t panic was the message - there’s plenty of time before it happens and everything will be resolved. Well, now it’s happening. So what’s the impact of Brexit on brand owners?
The over-arching question is whether EUTMs will be transitioned into domestic UK trademark rights. If so, how is that going to work? Either way, is it prudent to start filing for national UK trademarks now to protect your position?
To date the message has been (in a brilliantly British manner) “keep calm and carry on” - mechanisms for converting EUTMs will be developed to ensure ongoing protection in the UK. This was designed to provide brand owners with some comfort. However, there’s no indication as to what those mechanisms will be and, more importantly, no details on reconciling competing rights, whether objections can be raised and what the cost of conversion will be (the British government is unlikely to pass up the cash cow of implementing fees on a per-mark basis when it’s just lost all its of its EU trade subsidies). There’s also the administrative burden given that the EUIPO registers almost 135,000 trademarks a year. That’s an awful lot of registrations to convert and someone has to bear the cost.
Practical issues aside (isn’t that how Brexit came to be in the first place?), Britain is hardly adored throughout the EU and there has been increasing references to hard negotiating by remaining member states. The fact that Spain put Gibraltar into play within hours of Brexit being triggered is a worrying sign for Britain as negotiations gear up. There will be some major political issues in the arena - free movement, refugee status and trade deals chief among them - so if the EU plays tough and Britain has to horse trade some of its wish list, where will trademark protection figure?
Before panic sets in (keep calm, see above) brand owners should note that their role in this process could be critical. The vast majority of the world’s major consumer brands have significant interests in both Britain and the EU - and both economies will consider those brands important assets going forward. It’s in neither side’s interest to alienate companies such as Apple, Coca-Cola, Samsung and Toyota or to put unnecessary burdens on industries that may already be impacted financially. There’s a sensible solution to be found here and brand owners at all levels can lobby to bring that about.
So what to do? Sterling dropped after the Brexit vote and one option is to start filing for your key marks now and defray the costs over the next 2 to 3 years. Many brands have already started that process, more will likely follow. Given the uncertainty that surrounds this issue at all levels, getting ahead of the game may be the safest option.