Brexit & Trade Marks. The UK is leaving the EU, Marks & Clerk is not

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1 Brexit & Trade Marks The UK is leaving the EU, Marks & Clerk is not

2 On 29 March 2017 the United Kingdom gave formal notice of its intention to leave the European Union, in keeping with the result of the referendum on EU membership that had been held the previous year. Unless agreement to an alternative date is reached, this means that the UK will leave the EU on 29 March The UK is leaving the EU, Marks & Clerk is not. Marks & Clerk is an outward looking firm with a long history of working internationally and across borders and we will continue to be one of the leading European intellectual property firms. We have had a presence in continental Europe for nearly 30 years, serving clients from the UK and the EU, as well as having offices in Asia and Canada. Negotiations between the UK and the EU continue but for the time being there is considerable uncertainty over what the future relationship between the UK and the EU will look like. Although some kind of transitional deal immediately following the UK s departure seems likely, the nature of that is also unclear. While Brexit will certainly impact virtually every aspect of the UK economy, and the legislative challenge will be significant, much of the current architecture of intellectual property law will remain unchanged following the UK s departure from the EU. International intellectual property agreements to which the UK is party such as the Paris Convention and the TRIPS Agreement, for example, exist outside of the EU so will be unaffected by Brexit. Likewise, relationships between the UK and the European Patent Office also exist outside the remit of the EU. Marks & Clerk s expert and dedicated Brexit team is keeping a close eye on the Brexit process and will continue to update our clients and our guidance regularly. Our offices Aberdeen (UK) 2. Birmingham (UK) 3. Cambridge (UK) 4. Edinburgh (UK) 5. Glasgow (UK) 6. London (UK) 7. Manchester (UK) 8. Oxford (UK) 9. Luxembourg 10. Paris (France) 11. Sophia Antipolis (France) 12. Ottawa (Canada) 13. Beijing (China) 14. Hong Kong (China) 15. Kuala Lumpur (Malaysia) 16. Singapore

3 Brexit & Trade Marks Brexit promises a major change to trade mark law and practice in the United Kingdom. Some of that will be immediate; other aspects are likely to develop over time At present there are four types of registered trade mark which provide protection in the UK: 1. UK national trade marks; 2. EU trade marks; 3. International Registrations designating the UK; and 4. International Registration designating the EU. UK national trade marks Applications for UK national trade marks are made to the UK Intellectual Property Office, not to an EU institution. There is accordingly no reason why existing UK national trade mark registrations should not remain validly registered following Brexit. However, domestic trade mark law is greatly influenced by the EU Trade Mark Directive. The current scheme of the UK s EU Withdrawal Bill envisages that EU law, as it exists on the date of Brexit, will become part of the corpus of UK law. This would include the EU Trade Marks Directive. Thus there should be very little change to the substantive law, in so far as it relates to UK national trade mark registrations, at the moment of Brexit. Furthermore, the UK will remain a member of the Paris Convention, which underpins intellectual property protection around the world. As such, it will remain possible for applicants who have filed for trade mark protection in the UK to subsequently claim the priority of that application for a trade mark registration in the EU (or elsewhere) and vice versa. However, following Brexit the UK courts will no longer be bound by rulings of the Court of Justice of the EU (CJEU) on matters of trade mark law. Therefore the courts interpretation of the scope of protection may change over time and may diverge from the EU approach. That said, the UK courts are likely to find rulings of the CJEU on identically-worded provisions of trade mark law persuasive, even if they are no longer binding. EU Trade Marks (EUTMs) EUTMs are registered with the EU Intellectual Property Office and have unitary effect in all Member States of the EU. Many companies have relied upon EUTMs rather than national trade mark registrations for their trade mark protection in Europe. The consequences of the UK ceasing to be an EU Member State are therefore of great importance. The Government s EU Withdrawal Bill aims to incorporate existing EU law into UK law on Brexit. In theory this would include the EU Regulation governing EUTMs. However, this will not be workable in practice, given that EUTMs are EU-wide rights and the UK will no longer be part of the EU. Fortunately it appears that the prevailing view is that it would be commercially unacceptable to deprive proprietors of EUTMs of the registered trade mark protection they it appears that the prevailing view is that it would be commercially unacceptable to deprive proprietors of EUTMs of the registered trade mark protection they previously enjoyed in the UK

4 previously enjoyed in the UK via their EUTM following Brexit the EU s position statement on intellectual property rights states that holders of Community (ie EU) rights should not suffer any loss of protection on Brexit. What is not known is how this will be achieved there are several possible mechanisms. The simplest way would be to extend the current EUTM system to include the UK after Brexit. This is unlikely to be politically feasible. An alternative approach would be for all EUTMs to be entered onto the UK trade mark register following Brexit as UK national trade marks (UKTMs). These new UK national marks would have the same scope of protection and the same priority, filing and registration date as the original EUTM. If relevant they would also have the same seniority as the EUTM. One option would be for re-registration of EUTMs to be automatic, which could result in a lot of clutter and deadwood on the register. Another option would be to require EUTM proprietors to formally opt-in in order to obtain separate UK protection. The UK Intellectual Property Office (UKIPO) could be given the right to examine the new UKTM in the same way as if it were a freestanding new national UK trade mark application, which would generate substantial work for the UKIPO and therefore introduce delay, as well as creating uncertainty for trade mark proprietors. Another question is whether a fee will be payable and, if so, how much it will be. CITMA, the representative body in the UK for trade mark attorneys, is campaigning for EUTMs to be entered onto the UK register at no or minimal cost to the proprietor. In addition, this route raises broader issues on matters such as use and seniority and what should happen in respect of pending EUTM applications and EUTMs currently subject to cancellation proceedings. Other issues will also need to be resolved. For example, it is not yet known how challenges to EUTMs based on earlier UKTMs will be dealt with following Brexit. If the UK is no longer part of the EUTM system, it is feasible that challenges to EUTMs which are based on UKTMs would no longer be permitted and any pending challenges would be summarily dismissed. Whilst the landscape remains uncertain, and although it seems highly unlikely that EUTM proprietors would simply lose their protection in the UK following Brexit, that is still a potential outcome. To the extent the UK is a key territory for EUTM proprietors who do not already have an equivalent, separate UKTM, the most risk averse course would be to file a UKTM now at least in respect of any core marks in order to ensure that registered trade mark protection in the UK is maintained regardless of what happens following Brexit. However, the time and costs of doing this will need to be balanced against what currently appears to be the low risk that a proprietor would actually lose its registered trade mark protection derived from an EUTM in the UK after Brexit. We recommend that advice be obtained and decisions made on a case-bycase basis. The EU recently announced that, subject to there being no agreement to the contrary, intellectual property professionals domiciled solely in the UK could lose their rights of representation before the EU Intellectual Property Office (EUIPO). Whatever the results of the Brexit negotiations, Marks & Clerk s international network, including offices in France and Luxembourg, ensures that we will continue to be able to represent our clients before the EUIPO.

5 The validity of IRs should not be affected by Brexit, even where the IR is based on an EUTM Home Mark. However, Brexit is likely to have some indirect effects International registrations International trade mark registrations (IRs) are governed by the Madrid Protocol (and historically also the Madrid Agreement, which is no longer in force). The Madrid Protocol is a supra-national treaty to which there are 98 Contracting Parties (countries and intergovernmental organisations) including the UK and the EU. In order to obtain an IR, the applicant must have a home trade mark application or registration (the Home Mark ) in the country in which it has a real and effective industrial or commercial establishment, is domiciled, or of which it is a national. For an IR based on an EUTM as the Home Mark, the country must be an EU Member State. As IRs are governed by a supra-national treaty, the validity of IRs should not be affected by Brexit, even where the IR is based on an EUTM Home Mark. However, Brexit is likely to have some indirect effects on IRs. For example, and in the absence of any automatic transitional provision established under UK law, if the holder of an IR designating the EU (but not also separately designating the UK) wishes to maintain registered trade mark protection in the UK following Brexit, it will need to extend the scope of protection of its IR to specifically include the UK. It is not yet known whether a special mechanism will be set up for this or whether an existing procedure could be used. In the meantime and following Brexit it would be prudent for applicants for new IRs to designate both the UK and the EU. Another issue is that an entity or person wishing to file a new IR after Brexit which is based on an EUTM as the Home Mark will, as before Brexit, still have to show that it has a real and effective industrial or commercial establishment in, is domiciled in, or is a national of, an EU Member State. This may pose a problem once the UK is no longer a Member State following Brexit. Therefore, UK companies without a presence in Europe (and all UK nationals) will have to file a UKTM and use that as their Home Mark for their IR application instead. As the filing date of the IR is not linked to the filing date of the Home Mark there will not be any disadvantage to simply filing a new UKTM rather than relying on an existing EUTM in terms of loss of an earlier filing date. Trade marks seniority If a trade mark proprietor owns a national trade mark in one of the EU Member States and subsequently obtains an EUTM registration, the proprietor can surrender or allow the earlier national trade mark to lapse (and thereby avoid paying renewal fees in relation to that mark) but retain the benefit of the earlier mark, in particular its earlier filing date, by claiming for the EUTM the seniority of the earlier trade mark. The proprietor of the EUTM is then deemed to have the same rights as he would have had if the earlier trade mark had continued to be registered. In order to claim seniority, the applicant for the EUTM must be the same as the proprietor of the earlier national mark and the marks must be identical. The goods and services covered by the EUTM must be identical with or contained within those for

6 until this uncertainty is resolved, it would be prudent for EUTM owners claiming seniority from an existing UK trade mark to refrain from surrendering the earlier trade mark or allowing it to lapse. which the earlier trade mark is registered (for instance t-shirts are contained within an earlier registration for clothing). If, however, rather than surrendering the earlier trade mark or allowing it to lapse, the earlier trade mark is revoked or declared to be invalid, the EUTM will lose its seniority claim. Following Brexit it will no longer be the case that the earlier trade mark will be a national trade mark registered in an EU Member State (even if it was at the time of the seniority claim). It is not clear what impact this may have on seniority claims. It is possible that seniority claims based on an earlier UKTM will be lost. This could give third parties with intervening rights an opportunity (where none previously existed) to challenge the EUTM although this would be subject to any unregistered trade mark rights the EUTM proprietor may have developed which pre-date the challenger s intervening rights. Furthermore, unless specific provision is made by the UK government to revive any UK national marks which have been surrendered or allowed to lapse as a result of the proprietor s reliance on the seniority of the corresponding EUTM, the proprietor will have lost those rights entirely. One possibility is that, if the UK government makes provision for EUTMs to be entered onto the UK trade mark register following Brexit as new UK (national) trade marks, then to the extent the seniority of the EUTM in question derives from an earlier UK trade mark, which has since been surrendered or allowed to lapse, that seniority claim could continue to be recognised by the new UK trade mark. In the meantime, until this uncertainty is resolved, it would be prudent for EUTM owners claiming seniority from an existing UK trade mark to refrain from surrendering the earlier trade mark or allowing it to lapse. EU trade marks non-use An EU registered trade mark (EUTM) becomes subject to use requirements five years after registration. This means that if the mark is not put to genuine use: (a) in the form in which it is registered or a form which does not alter the distinctive character of the mark; (b) in relation to the goods and services for which it is registered; and (c) in the EU; within five years of the date of registration (or any subsequent five year period) it becomes vulnerable to full or partial revocation for non-use. As a corollary of this, where an EUTM which has been registered for more than five years is asserted against a third party in opposition or cancellation proceedings, or in invalidity proceedings before the courts, the EUTM proprietor can be put to proof of use of the mark before it is permitted to rely on the mark in the proceedings. The issue of non-use is particularly relevant in the context of Brexit because many EUTM proprietors may only have been using their

7 EUTM in the UK. Whilst this may (the law in this area is complex) have been sufficient to constitute genuine use of the EUTM prior to Brexit, it is highly unlikely to continue to do so once the UK leaves the EU. It is not yet known how this issue will be addressed following Brexit. Will EUTMs which are more than five years old and which have only been put to genuine use in the UK automatically become vulnerable to revocation for non-use or will an additional grace period be given to enable proprietors (where commercially possible) to commence use of their EUTM in one or more of the remaining Member States? An additional grace period would certainly be welcomed by trade mark proprietors. There are a number of options available to EUTM owners to help mitigate this risk: 2. File a new trade mark The mark currently protected can be reregistered, either as a new EUTM and/or as a new UK trade mark. The new EUTM would have a new five year grace period in which the proprietor could put the EUTM into wider geographical use and the existing UK use of the trade mark (assuming it continues) should be sufficient to satisfy the use requirements. However, this alone would not assist in maintaining the original EUTM. The downside of this approach is that the new marks will have a later filing date than the original EUTM, which could open the marks up to challenge from third parties with intervening rights. 1. Review commercial strategy in the EU EUTM holders who want to continue using their EUTM in the EU after Brexit could consider expanding their market into mainland Europe now, if this makes sense from a commercial and financial perspective. This could include starting to export products to non-uk EU countries or specifically targeting non-uk EU customers online. In order to satisfy the requirements of genuine use, the use of the mark in these territories must be to create or maintain a market share under the mark for the relevant goods or services in that territory. The use must therefore be more than merely token. Whether the use of the EUTM is or is not expanded, EUTM proprietors should keep good records and evidence of the use of their EUTMs throughout the EU, so that these materials can be relied upon in any future revocation proceedings.

8 Marks & Clerk advises on all aspects of intellectual property. If you have any questions regarding the impact of Brexit on your intellectual property rights, please contact your usual Marks & Clerk advisor or, alternatively, you can direct your question to the chair of our Brexit committee, Graham Burnett-Hall. Graham Burnett-Hall Partner Solicitor Visit the Brexit section of our website for further information at com/home/knowledge-news/special- Articles/Brexit.aspx Marks & Clerk is recognised as one of the world s leading intellectual property firms. The firm s patent and trade mark attorneys, solicitors and consultants offer clients a comprehensive range of intellectual property services covering patents, trade marks, designs and copyright. This includes obtaining protection worldwide, portfolio management, strategic and commercial advice, licensing, enforcement, due diligence and litigation. Marks & Clerk has expertise in a wide range of commercial sectors and technologies. With a global network of 16 offices, in the UK (across eight cities), continental Europe, North America and Asia, and long-established relationships with other leading IP firms worldwide, the firm is able to meet clients IP requirements on a local and global basis. This publication aims to provide general information on Brexit and intellectual property. It does not constitute legal advice Marks & Clerk Properties Ltd Marks & Clerk is a registered trade mark.