JOINT STATEMENT REGARDING THE NEGOTIATIONS CONCERNING THE UNITED KINGDOM S EXIT FROM THE EUROPEAN UNION WITH REGARDS TO TRADE MARKS AND DESIGNS AND

Transcription

1 JOINT STATEMENT REGARDING THE NEGOTIATIONS CONCERNING THE UNITED KINGDOM S EXIT FROM THE EUROPEAN UNION WITH REGARDS TO TRADE MARKS AND DESIGNS AND THE RIGHT OF REPRESENTATION OF UK PRACTITIONERS BEFORE EUIPO AND THE EUROPEAN COURTS OF JUSTICE 1

2 On the 23th of June 2016, the United Kingdom (UK) voted in favor of withdrawal from the European Union. On the 16 th of January 2017, the British Prime Minister stated that, after withdrawal, the UK will regain control of its own laws and will no longer recognize the jurisdiction of the European Courts of justice. Regarding the negotiations concerning the UK s exit from the EU (hereinafter Bre it ), we have conducted an overall reflection on its impact on Intellectual property issues and, more specifically, on European Union Trademarks (EUTMs), Community Designs (RCDs) and on the representation rights of UK attorneys before European Union Courts. 1. Trade Marks and designs UK Trademark attorneys have put forward two proposals: (i) that unitary EU rights registered after Brexit should cover the UK or (ii) as an alternative, the establishment of a new Europea s ste allowing all countries of geographic Europe, including the UK, to be covered by a unified title even if they are not an EU member. Given the fact that the EUTM and RCD are unitary rights covering the entire territory of the EU with a legal system depending on the case law of the European Courts of Justice, this would be incompatible with the new position of the UK that unitary EU rights registered after the Brexit should cover the UK. We suggest the following: 1 (i) for existing rights, an automatic conversion of all EUTMs and RCDs into UK trade mark and design registrations with the same scope of protection, registration date and, where applicable, the same priority and/or seniority claimed; (ii) for any EUTM or CD applications pending at the effective date of Brexit (hereafter also referred to as actual e it ), the applicant should be allowed, within a reasonable time period, to file a request to transform these applications into UK applications, with the same scope of protection, filing date and, when applicable, priority date; (iii) in any case, the right holder or the applicant should not be required to pay any additional fee; (iv) any UK registration originating from an EUTM registration should be subject to use requirements under the UKTM Law as from the date the UK ceases to be a Member of the EU; (v) any use made in the UK of an EUTM within the 5 years before the actual exit of the UK should be taken favorably into consideration when deciding whether the EUTM has been put to genuine use in the EU; and (vi) it should be specifically agreed upon between the EU 27 and the UK that the rules relating to exhaustion of rights should apply to goods moving between the EU and the UK. 2. Right of representation Concerning the right of representation of UK attorneys before the EUIPO, the representation of natural or legal persons before the Office may only be undertaken by a legal practitioner (i) qualified in one of the Member States of the European Economic Area (EEA) and (ii) having his place of business within the EEA. A transitional period has been suggested during which British representatives could continue to represent their clients before the EUIPO. 1 We give our support to the EU Commission and its position paper published in September 2017 on intellectual property rights after the withdrawal of the UK. The EU Commission opts in favor of an automatic recognition of an intellectual property right in the United Kingdom on the basis of the existing intellectual property right having unitary character within the Union. It should be simple, with no financial costs and no administrative burden for the holder and no possible vetoes from the UKIPO. This automatic recognition will be a high legal security in respect of existing rights. 2

3 We consider that (i) after the withdrawal of the United Kingdom from the EU, the only way for United Kingdom attorneys to be eligible to act before the EUIPO would be if the UK remains in the EEA; (ii) if the UK does not remain in the EEA after the Brexit, UK attorneys should not be able to represent their clients before the EUIPO; (iii) due to the simple mechanism required to name a representative, a transitional period is not required. Giving permission to UK attorneys to represent before the EUIPO after the Brexit: (i) would lead to a breach of equality between European professionals; (ii) would represent an important loss of business for attorneys in the other EU countries. Furthermore, (iii) if the UK is no longer a member of the EEA, the UK should not continue to take advantage of this system; and (iv) there would be no political justification for giving this privilege to the UK. However, discussions with the UK may be considered after Brexit, in order to enter specific agreements on these different subjects. For the sake of clarity, it seems appropriate to specify that the same provisions should apply to all pending proceedings which require professional representation, such as oppositions, appeals before the Boards of Appeal, revocation and invalidity proceedings, as well as actions before the General Court or the Court of Justice. However, in pending proceedings for which professional representation is not strictly necessary, because they are coming to an end and do not include any further procedural activity, notifications could be made by the EUIPO or the EU Courts directly to the trademark or design owners. *** 3

4 1. Foreword One of the topics that will have to be discussed in the negotiations for the exit of the UK from the European Union relates to the transition, as of the date of Brexit, of the rights on European Union Trade marks and registered and unregistered Community Designs, deriving from the EU Council Regulations 2017/1001 and 6/2002 respectively. This includes registered rights, pending applications and new applications filed after the date of Brexit, as well as rights of representation of UK professionals before the EUIPO and the European Courts of Justice. The impact of Brexit on some of these matters will depend on whether the UK decides to remain a member of the European Economic Area (EEA). This position paper has been written taking into account the notice of the European Commission and the EUIPO of December 1, 2017, reminding that, as of the withdrawal date of the UK: EUTMs and registered CDs and non registered CDs, which are already conferring rights, will continue to be valid in the EU27 member States but will no longer have effect in the UK; Any pending application for an EUTM or for a registered CD will no longer cover the UK; Existing seniority claims in the EUTM based on national TM rights in the UK will cease to have an effect in the EU; Natural or legal persons who are domiciled or have a place of business in the UK only will have to be represented before the EUIPO, in accordance with articles 120(1) of regulation (EU) 2017/1001 and article 78(1) of the regulation (EC) n 6/ Trade Marks and Designs 2.1 Existing rights In order to cause as little inconvenience as possible to trade mark owners, we suggest that the agreement between the UK and the EU should entail an automatic conversion of all EUTMs and RCDs into UK trade mark and design registrations, enjoying the same scope of protection, registration date and, where applicable, the same priority and/or seniority claimed. It should also be established that EUTM and RCD owners should be informed, through the address for service indicated in the EUTM or RCD, of the details of the corresponding UK registrations, warning them that, if at the expiration of the EUTM they are interested in maintaining such right in the UK, they should file a separate renewal application before the UK Intellectual Property Office (UKIPO). The agreement between the UK and the EU should also consider the effect of UK prior rights on invalidity of RCDs in accordance with art. 25.1(d)(ii) of the regulation (EC) n 6/2002. Particular attention should be given to pending invalidity applications, the appealable invalidity declarations and the pending appeals at the date of Brexit that may have been based (by UK design owners) on a design registered in UK, filed before but made available to the public after the date of filing of the application or, if priority is claimed, the date of priority of the Registered Community design to be declared invalid. Furthermore, the possibility to invoke already existing UK prior rights at the date of Brexit in subsequently filed invalidity application should be discussed. 4

5 2.2 Pending applications It is suggested that, upon the actual date of the UK s exit from the EU, applicants for any pending EUTM or RCD applications should be allowed, within a reasonable time period, to file a request for conversion of these applications into UK applications, with the same scope of protection, filing date and, where applicable, priority date. This might be covered by UK legislation, without the need for an applicant to even file a request. In any case, this should not involve the payment of any filing fee, or only require a very small fee, if necessary. This application should then be treated the same way as any other UK trade mark or design application. However, as far as EUTM applications are concerned, there are a number of cases which might be potentially critical. Reference is made to applications which, at the time of the actual exit of the UK from the EU, are (i) subject to oppositions or (ii) have been provisionally refused on absolute grounds. (i) Account should be given, in particular, to EUTM applications subject to oppositions based only or also on prior UK rights. The following scenarios could take place: (a) Oppositions based on UK rights only. At the time of actual exit, the EUIPO should disregard the opposition and let the EUTM application proceed to registration. The applicant would then be entitled to ask for the conversion of the EUTM application into a UK application. With regard to the prior UK right(s) which would continue to affect the converted application, the following alternative solutions could be considered, if appropriate: the EUTM application is converted into a UK application still burdened by the opposition, which would be examined and decided by the UKIPO. This option would be favourable to UK prior right owners, but might sound unacceptable for the UKIPO, which may wish to maintain control over the admissibility of oppositions; the EUTM application is converted into a UK application free from the opposition. Once the UK application is examined and republished, the original opponent would be entitled to re file the opposition. No fees should be paid to the UKIPO. Such option would probably be welcomed by UK trademark owners, but not by the UKIPO, which might not accept to waiver opposition fees. In addition, it would potentially create a difference in treatment with UK prior trademark owners who had not filed an opposition against the EUTM application, but would be allowed to do so against the converted UK application by paying regular opposition fees; the EUTM application is converted into a UK application free from the opposition. Once the UK application is examined and republished, the original opponent will be entitled to refile the opposition, subject to payment of reduced or regular opposition fees. This solution would probably disappoint opponents relying on UK rights only, who would be forced to pay double fees; (b) Oppositions based both on UK rights and o UK national rights. At the time of actual exit, the EUIPO should examine the opposition insofar as it is based on o UK national rights only. If the applicant asks for the conversion of the application into a UK application, paragraph (a) would apply. (c) Oppositions based on o UK national rights only. At the time of actual exit, the EUTM application would still be burdened by the oppositions, which would be examined and decided 5

6 by the EUIPO. If the applicant asks for the conversion of the application into a UK application, the latter would be free from any encumbrances. (d) Oppositions based both on UK rights and EUTM applications/registrations. At the time of actual exit, both the EUTM application and the UK converted application could still be affected by an opposition. The EUIPO should examine the opposition insofar as it is based on prior EUTM applications/registrations. If the applicant asks for the conversion of the application into a UK application, the UKIPO should treat the converted application as subject to an opposition based both on UK prior rights (in which case, paragraph (a) would apply) and on an EUTM registration, as the latter would be automatically converted into a UK registration with an earlier date than the application date of the converted UK application. If the opposition is based on an EUTM application and the opponent asks for the conversion into a UK application, this would constitute a further basis of the opposition. (e) Oppositions based on EUTM applications/registrations only. If the applicant asks for the conversion of the application into a UK application, the UKIPO should treat the converted application as subject to an opposition based on an EUTM registration, as the latter would be automatically converted into a UK registration with an earlier date than the application date of the converted UK application. If the opposition is based on an EUTM application only, the UKIPO should wait for the opponent to decide whether or not to ask for the conversion into a UK application. Depending on the oppo e t s choice, the opposition will be maintained or dismissed. (ii) In the event that, at the time of actual exit, an EUTM application is undergoing a provisional refusal of protection based on absolute grounds, in particular based on article 7(1)(c) EUTMR, the absolute ground would still affect, in principle, both the EUTM application and the converted UK application. The following alternative solutions could be considered, if appropriate: (a) The EUTM application is converted into a UK application burdened by the refusal. The UKIPO would be free to confirm or dismiss it, if it does not agree with the EUIPO; (b) The EUTM application is converted into a UK application not burdened by the refusal. The UKIPO would be free to examine the application and issue a new refusal based on the same or different absolute grounds Unregistered Designs UK design law already provides for a UK unregistered design right under the Copyright, Designs and Patents Act 1988, which differs from the unregistered design protection under the EC Regulation No. 6/2002. For example, unregistered Designs under the EU Regulation protect the appearance of the whole or a part of a product, i.e. 2D or 3D designs, whereas UK unregistered designs only protect shape/configuration, excluding surface decoration. Therefore, after Brexit, due to the differences between the UK law and the EU Regulation, British law would not be suitable to replace the European Regulation on unregistered designs in the UK, and many such designs would no longer enjoy protection. It is therefore advisable that the UK expands the scope of its unregistered design law and harmonizes the scope of protection and the protection requirements with the EU Regulation. 6

7 2.2.2 Aspects on use of trade marks Any UK registration originating from an EUTM registration should be subject to use requirements under the UK Trade Mark Law as from the date the UK ceases to be a Member of the EU. It is, however, suggested that, for a period of 5 years as from the date of actual exit, any use made of the EUTM before that date, which would be considered as genuine use by the EUIPO, should also be considered as genuine use of the converted UK trade mark, even if such use would otherwise not have been deemed sufficient for maintaining a UK trade mark. On the other hand, any use of an EUTM made in the UK within the 5 years before the actual exit of the UK should be taken favorably into consideration when deciding whether effective use in the EU of the EUTM has taken place Exhaustion of rights After the actual exit, the matter of exhaustion may be treated differently in the EU 27 and the UK. The EU will continue with regional exhaustion, whereas the UK has to contemplate other possibilities, such as national exhaustion. Another (preferred) possibility is for the EU 27 and the UK to agree specifically (in a bilateral treaty) that the rules relating to exhaustion of rights should apply to goods moving between the EU and the UK, notwithstanding that a the general principle of free movement of goods for customs tariffs is not in place. 3. Right of representation of United Kingdom attorneys before EUIPO and European Courts of Justice 3.1 Legal background The right to represent before EUIPO The right to represent before EUIPO for EUTMs is provided for by Article 120 of EUTMR (2017/1001), stating the following: Article 120. Professional representatives 2) Any natural person who fulfils the following conditions may be entered on the list of professional representatives: (a) being a national of one of the Member States of the European Economic Area; (b) having his place of business or employment in the European Economic Area; (c) being entitled to represent natural or legal persons in trade mark matters before the Benelux Office for Intellectual Property or before the central industrial property office of a Member State of the European Economic Area. Where, in the State concerned, the entitlement is not conditional upon the requirement of special professional qualifications, persons applying to be entered on the list who act in trade mark matters before the Benelux Office for Intellectual Property or those central industrial property offices shall have habitually so acted for at least five years. However, persons whose professional qualification to represent natural or legal persons in trade mark matters before the Benelux Office for Intellectual Property or those central industrial property offices is officially recognised in accordance with the regulations laid down by the State concerned shall not be required to have exercised the profession. 7

8 The right to represent before EUIPO for RCDs is provided for by article 78(4) as of CDR (no.6/2002): Article 78. Professional representation 4) Any natural person may be entered on the special list of professional representatives in design matters, if he fulfils the following conditions: (a) he must be a national of one of the Member States; (b) he must have his place of business or employment in the Community; (c) he must be entitled to represent natural or legal persons in design matters before the central industrial property office of a Member State or before the Benelux Design Office. Where, in that State, the entitlement to represent in design matters is not conditional upon the requirement of special professional qualifications, persons applying to be entered on the list must have habitually acted in design matters before the central industrial property office of the said State for at least five years. However, persons whose professional qualification to represent natural or legal persons in design matters before the central industrial property office of one of the Member States is officially recognised in accordance with the regulations laid by such State shall not be subject to the condition of having exercised the profession The right to represent according to the Office guidelines According to the EUIPO Office Guidelines (Part A, Sector 5, 2.3), a representative who is entered on the Office s list of professional representatives according to Article 120(1)(b), (EUTMs), is automatically entitled to represent also in design matters (Article 78(1)(b) CDR)). The list of representatives for design matters is intended for those representatives that can only represent in design matters but not in trademark matters. According to paragraph 2.3 of Part A, Section 5 of the Guidelines, in order to represent before the EUIPO in trade mark matters three requirements are to be fulfilled: (d) The representative must be a national of one Member State of the EEA. (e) The representative must have its place of business within the EEA. (f) The representative must be entitled under national law to represent third parties in trade mark matters before the national industrial property office at a Member State of the EEA The right to represent before European Courts of Justice Before the Court of Justice of the European Union, article 19 in title III (Procedure before the Court of Justice) of the Statute of the Court of Justice of the European Union provides that: Onl a lawyer authorized to practice before a court of a Member State or of another State which is a party to the Agreement on the EEA may represent or assist a party before the Court. Article 53 provides that The procedure before the General Court shall be governed by Title III. The procedure before the General Court is the same as the procedure before the Court of Justice of the European Union. 8

9 3.2 Consideration of British representatives after Brexit Due to this legal background, as from Brexit, if the United Kingdom does not remain in the EEA, British representatives who are not nationals of a Member State of the EEA, and/or have a place of business within a member country of the EEA, and/or are entitled to represent on trade mark and design matters before a national office of a Member State of the EEA, will not be entitled to be on the list of professional representatives before EUIPO. The same reasoning applies to representation before the Court of Justice of the European Union and the General Court of Justice: if the United Kingdom is not part of the EEA, British representatives who are not nationals of a Member State of the EEA will not be entitled to represent their clients before the European Court of Justice and the General Court of Justice. In our view, European law should be applied automatically The immediate effect of Brexit concerning representation before EUIPO and European Courts of Justice A transitional period of two years after Brexit has been suggested, during which British representatives could continue to represent before EUIPO. We underline that the substitution of a representative before the EUIPO is a very simple step. Paragraph of Part A, Section 5, of the Guidelines provides a mechanism to name a representative where there is the obligation to do so, and the owner has not complied with this obligation. In fact, the Office always invites the applicant to designate a professional representative, allowing a term to do so, in representation, opposition or cancellation proceedings. On the other hand, we think that the United Ki gdo s decision to remain or not to remain in the EEA after Brexit will be made well in advance of the date of Brexit. Trade mark and design owners who need representation will be aware long before that date of those cases where, since the representative is British, a new representative will have to be named Professional capacities of representation before EUIPO and European Courts of Justice incompatible with Brexit The link between the right to represent before EUIPO and the right of representation before a national office of an EEA member state is inter alia due to the fact that the European Union Trademark regulation and the Community Design regulation are linked with the national legislations of member states, which have been harmonized by the corresponding EU Directives. This means that professional representatives of EEA member states are supposed to know such law and practice which, due to harmonization, are very similar to those being applied by the EUIPO. The same applies to the jurisdiction that the European Courts of Justice have in connection with EUIPO decisions, with European Union Courts and with national matters, through prejudicial rulings. It is a fact that, once Brexit takes place, practice and decisions of United Kingdom cases will no longer be subject to the rulings of the European Courts of Justice. The will to be no longer bound by European Courts of Justice rulings is precisely one of the main reasons why the United Kingdom has decided to leave the European Union. 9

10 Obviously, this will not allow British practitioners to follow the European Courts of Justice case law, as EEA members states do, and will not ensure a sufficient capacitation of British practitioners to represent third parties before EUIPO Economic impact of professional activities in the EEA countries According to Article of the European Union trade mark regulation: Without prejudice to the second sentence of paragraph 3 of this Article, natural or legal persons having neither their domicile nor their principal place of business or a real and effective industrial or commercial establishment in the European Economic Area shall be represented before the Office in accordance with Article 120(1) in all proceedings provided for by this Regulation, other than the filing of an application for an EU trade mark. And according to the article 77.2 of the Community Design Regulation: Without prejudice to the second subparagraph of paragraph 3, natural or legal persons not having either their domicile or their principal place of business or a real and effective industrial or commercial establishment in the Community must be represented before the Office in accordance with Article 78(1) in all proceedings before the Office established by this Regulation, other than in filing an application for a registered Community design; the implementing regulation may permit other e ceptions. Natural and legal persons located outside the EEA must be represented before the Office. This means that there are a lot of cases originating from outside the EEA which must be handled by professional representatives, an important amount of professional activity representing an important generation of employment and income, which in turn leads to the payment of income tax. Due to several reasons, an important share of this activity, employment and taxation is currently being directed to professionals in the United Kingdom. It would be unfair that, once Brexit takes place and the United Kingdom is no longer a member of the EEA, the United Kingdom continues to take advantage of a European Union Intellectual Property system to generate employment and tax income in the United Kingdom to the detriment of EEA member states. For all the above reasons, the outcome of the negotiations between the European Union and the United Kingdom in connection with professional representation before EUIPO and European Courts of Justice, if the United Kingdom does not remain in the EEA, should be that, as from the date of Brexit, British professional representatives are not entitled to represent before EUIPO and European Courts of Justice, without any transitional period at all. 10