It is over 3 years since the UK carried out a referendum on its membership of the European Union (EU), and the public’s decision then was that the UK should leave the EU.
Subsequent negotiations between the UK and the EU resulted in an extension from the original 29 March 2019 date for the UK to exit the EU, to 31 October 2019. Whilst the Withdrawal Agreement negotiated by the UK Government with the EU has failed to receive the approval of UK Parliament, UK Parliament has legislated to avoid a “no deal” Brexit; this could include seeking a further extension to the 31 October 2019 exit date.
The UK Government has indicated that it continues to pursue a deal with the EU and aims to reach such a deal before 31 October 2019. If a deal is reached, this is likely to include a transition period, during which EU law would continue to apply. In a “no deal” scenario, the default position is that the UK would leave the EU on 31 October 2019, and EU law would cease to apply with immediate effect.
The UK political situation is constantly changing, such that a general election, a second referendum on Brexit and/or cancelling Brexit altogether cannot be ruled out. Meanwhile, the default position sets the effective date of Brexit at 31 October 2019.
Effects of Brexit on intellectual property
Regardless of whether the UK leaves or remains in the EU, European patents will be unaffected. The European Patent Office is independent of membership of the EU.
For EU trade marks and Community designs, these unitary rights cannot continue to cover the UK if or when it ceases to be an EU member state. After Brexit, EU unitary trade mark registrations and European Community designs will continue to have effect in the remaining 27 member states, but until Brexit does occur both EU trade marks and Community designs likewise have effect in the UK.
If the UK can reach a deal with the EU to include a transition period, EU trade marks and Community designs would continue to cover the UK during that transition period. In the event of a no-deal Brexit and absent any further extension of time, EU trade marks and Community designs could cease to apply to the UK as early as 31 October 2019.
The effects of Brexit upon EU trade marks and Community designs will be provided for in UK legislation whether or not a deal is reached.
UK Statutory Legislation on Brexit and EU Trade Marks
UK Parliament has passed The Trade Marks (Amendment etc.) (EU Exit) Regulations 2019 (“the Regulations”), ready to take effect on whatever date the UK leaves the EU.
The Regulations, inter alia, are to ensure that UK protection continues after exit day for EU trade marks (“EUTM”s) registered at exit day and to make provision for EUTMs pending at that point.
The Regulations are comprehensive, with pertinent provisions detailed below:
Creation of comparable UK trade marks at exit day
For all registered EUTMs, a comparable UK trade mark will be recorded on the UK register with the same priority and/or seniority dates as the corresponding EUTM. This will be at no cost to the EUTM holder and with minimum administrative burden. Existing priority and seniority dates will be automatically reflected in the comparable UK trade mark registration.
Pending EUTMs at exit day
Comparable UK rights will only be created for EUTMs with a registered status immediately before exit day.
For EUTMs pending on exit day, it will be possible within 9 months of exit day to apply to register an identical UK trade mark for the goods/services covered in the EUTM, to take the same filing and priority dates as the EUTM application. The UKIPO will require payment of the same official fees as for a regular UK trade mark application, based on the number of trade mark classes included.
Opt out from creation of comparable UK trade marks
Registered EUTM holders not wishing to be granted a comparable UK right may opt out from receiving one, by filing a notice at the UKIPO identifying the trade mark by its registration number, naming any party with an interest in the EUTM and confirming appropriate notice given to that third party of the opt out from creation of a comparable UK trade mark. Opt out is not possible if the EUTM has been used in the UK, if it has been assigned or licensed, if it has been the subject of an agreement or has had litigation based upon it.
For each newly created comparable UK right, renewal will be required separately from the corresponding EUTM, but on the same renewal date. Where EUTM renewal falls due after exit day, early payment of the renewal fee at the EUIPO prior to exit will have no effect on the comparable UK right.
For comparable UK rights with renewal dates falling less than six months after exit day, the UKIPO will issue renewal reminders on the actual date of expiry or as soon as practicable after that, to advise of the expiry but to also provide a further six month period, from the date of the reminder, in which the registration may be renewed. Renewal within the additional six months allowed for renewal will attract the usual renewal fee, but no fine for late renewal.
For EUTMs which expired before exit day and are still within their 6 month grace period for late renewal, comparable UK trade marks will be created but given an “expired” status, and will only be maintained on the UK register if the corresponding EUTM is renewed at the EUIPO before expiry of the grace period.
Licences, security interests and assignments
If existing in respect of a corresponding EUTM at exit day, these will continue to have legal effect in the UK in relation to the comparable UK right, but steps should be taken by affected parties to ensure recordal of these interests on the UK register within 12 months.
Use and reputation
Both UK and EUTMs may be revoked on grounds of non-use if a registered mark is unused for an uninterrupted period of five years. The Regulations make provision for comparable UK rights created on exit day, in terms of these use requirements and proof of use in opposition proceedings. If there has been use in the EU but not the UK prior to exit day, this will count as use of the comparable UK right. After exit day, use of the mark in the UK will be required. There will come a point when the whole of the relevant 5 year period will be after Brexit, at which point only UK use will be relevant.
For assessment of reputation of a comparable UK right created from a corresponding EUTM, a similar approach will be applied, with EU reputation counting before exit day and UK reputation being required afterwards.
Jurisdictional arrangements and pending proceedings
For cases before designated “EU Courts” in the UK, which are ongoing at exit day, these will continue to be heard as if the UK were still an EU member state. For ongoing proceedings before the UKIPO at exit day, where an EUTM holder has brought action against a UK trade mark, these will continue to be heard under the UK legislation.
Where an injunction is in place at exit day which prohibits actions in the UK which would infringe an existing EUTM, the terms of that injunction will be treated as if they also apply to the comparable UK trade mark.
Conversion of EUTMs into national rights
Subject to certain conditions, refused or withdrawn EUTMs may be converted into national rights with the same filing and/or priority dates. This is possible within three months of the ceasing of effect of the EUTM. For EUTMs refused or withdrawn within three months of exit day, the UK will honour the right to conversion. This will be possible by applying to register a corresponding UK trade mark with a claim of the earlier filing and/or priority date of the EU application or registration which has been refused or withdrawn.
Community designs and EU designations in International trade mark and design registrations
Similarly, UK legislation will allow for the creation of comparable UK rights in respect of Community designs as at the effective date of Brexit. Also provided for, will be the effect upon EU designations in International trade mark and design registrations. For registrations existing at the point of Brexit, a standalone UK registration will be created with the same effective dates as the EU designation. There will be transitional provisions for applications pending at that point, comparable to those for EUTMs pending at exit day.
After Brexit, protection for new trade marks and designs will need to be sought in the UK, distinct from the EU, but with designation also being possible for both territories though International registration via the Madrid Protocol (for trade marks) and Hague Agreement (for designs).
There is no immediate need to replace existing EU rights with UK national applications or designations but, if or when Brexit occurs, registration will need to be sought for new rights, separately, at the UKIPO and EUIPO. There are circumstances in which national protection should be considered in addition to or in place of EU registration, such as where use of a trade mark will not or does not extend to a substantial part of the EU, but such issues existed before Brexit became a consideration, just as they are relevant now.