There continues to be a high level of uncertainty regarding the impact of Brexit on the rights of EU trademark owners. For the last 21 years, the EU Trademark Registration (EUTM), formerly known as the Community Trademark or CTM, has allowed a trademark owner to obtain a single trademark registration covering all 26 EU member states, rather than having to register its mark separately in each country. However, the impending implementation of Brexit has thrown the validity of EUTMs in the U.K. as of next year into doubt.
In March 2017, the U.K. invoked Article 50 of the Treaty on the European Union, essentially advising the EU that the UK intended to withdraw and starting the clock on a two year period to negotiate the terms of the withdrawal. After the expiration of this period (March 30, 2019), all EU-related treaties shall cease to apply to the United Kingdom.
In December 2017, the EU Intellectual Property Office (EUIPO) issued a “Preparedness Notice” advising trademark holders that absent an agreement to the contrary by the March 30, 2019 deadline, registered EUTMs would no longer have any validity or effect in the UK. The EUIPO stated that “in view of the considerable uncertainties, in particular concerning the content of a possible withdrawal agreement, all right holders and applicants are reminded of certain legal repercussions…which need to be considered and anticipated.”
This means that in a worst case scenario, a party that owns an EUTM without a corresponding U.K. registration would not be able to rely on registered rights when enforcing its mark against an infringer in the U.K., and would have to rely solely upon whatever common law rights it may have in the U.K. It is generally far more difficult to establish and enforce common law rights in the U.K. than in the U.S., so the loss of registered rights may create significant difficulties for trademark owners seeking to stop infringements in the U.K. The loss of registered rights could even prevent trademark owners from using the ® symbol within the United Kingdom.
It is still possible that the EU and U.K. could reach a comprehensive agreement that would allow for the continued validity of EU trademarks in the U.K. However, given the implications of Brexit for trade, security, immigration, and other issues, the rights of EU trademark holders are not likely to be at the top of the list for the EU and U.K. representatives negotiating the terms of withdrawal. Furthermore, some U.K. politicians are continuing to advocate for a “hard Brexit” that would result in the U.K. leaving the EU without a deal to replace any existing treaties.
It is also possible that the U.K. could unilaterally pass legislation that would continue to protect the rights of EUTM holders, for example by creating new U.K. trademark registrations that would continue to recognize whatever rights the trademark owner previously owned in the EU. Again, however, there is no guarantee that any such legislation will be passed by the deadline.
Therefore, if the U.K. is a key market for the owner of an EU trademark who does not currently have a separate U.K. trademark, we would recommend considering filing a U.K. trademark application now in order to ensure continued trademark protection in the U.K. regardless of the outcome of the withdrawal process.