Brexit & Trade Marks The UK is leaving the EU, Marks & Clerk is not
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 2019. 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 and global intellectual property firms. We have had a presence in continental Europe for nearly 30 years, with offices in France and Luxembourg, as well as having offices in Asia and Canada, serving clients from all over the world. 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. A transitional period has been agreed in principle, pursuant to which EU law would continue to apply in the UK until 31 December 2020, with the effect that very little would change until then so far as intellectual property rights are concerned. 13 12 1. Aberdeen (UK) 2. Birmingham (UK) 3. Cambridge (UK) 4. Edinburgh (UK) 5. Glasgow (UK) 6. London (UK) 5 4 1 7 2 3 8 6 10 9 11 Our offices 7. Manchester (UK) 8. Oxford (UK) 9. Luxembourg 10. Paris (France) 11. Sophia Antipolis (France) 12. Ottawa (Canada) Whilst 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, the UK s relationship with the European Patent Office is also outside the remit of the EU, as the European Patent Office in not an EU institution. Marks & Clerk s expert and dedicated Brexit team are keeping a close eye on the Brexit process and will continue to update our clients and our guidance regularly. 16 17 14 15 13. Toronto (Canada) 14. Beijing (China) 15. Hong Kong (China) 16. Kuala Lumpur (Malaysia) 17. Singapore 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. The EU and the UK have agreed in principle that there should be transitional regime lasting until the end of 2020, during which EU law will continue to apply in the UK. Whilst it cannot be certain that the transitional regime will come into effect, as that depends on the successful negotiation and ratification of the Withdrawal Agreement between the UK and the EU, for the purposes of this briefing note we have assumed that there will be a transitional regime lasting until at least 31 December 2020. 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. Existing UK national trade mark registrations will remain in force 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, or following the end of the transitional period. Furthermore, the UK will remain a party to a number of international agreements which underpin intellectual property protection around the world, including the Paris Convention. 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 the end of the transitional period 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. Whilst many questions are yet to be answered, the draft Withdrawal Agreement published by the EU in March 2018 is encouraging. The draft agreement firstly assumes a transition period, as mentioned above, during which existing intellectual property rights will be maintained, lasting until 31 December 2020. This means that EUTMs will continue to apply in the UK and be recognised and enforced on an EUwide basis by the UK courts. Furthermore, UK attorneys and lawyers will continue to be Whilst many questions are yet to be answered, the draft Withdrawal Agreement published by the EU in March 2018 is encouraging.
able to exercise their representation rights before the EU Intellectual Property Office and the CJEU during the transition period. The UK government and the EU are in agreement on this. At the end of the transition period, the draft agreement envisions no loss of protection for holders of EU intellectual property rights. The draft agreement stipulates that the holders of such rights that have been registered or granted before the end of the transition period will automatically be granted a comparable intellectual property right in the United Kingdom. For EUTMs, this would mean a trade mark consisting of the same sign, for the same goods or services. The date of filing or the date of priority will be the same as that of the EUTM and the first renewal date of the new UK intellectual property rights will be the same as the renewal date of the corresponding EUTM. The UK government appears to be in agreement with the general principle that there should be no loss of rights but it is not yet clear precisely how this will be implemented. For example, the UK could decide that existing EU intellectual property rights should still be recognised by the UK courts after the end of the transition period up until their next renewal date and that rights holders will need to take some positive action if they wish to maintain their rights thereafter. It is also not yet clear whether the UK government wishes to be able to charge a fee for re-registration of EUTMs. The UK government appears to be in agreement with the general principle that there should be no loss of rights but it is not yet clear precisely how this will be implemented. The UK s EU Withdrawal Bill (not to be confused with the EU/UK Withdrawal Agreement), which is working its way through the UK parliament, 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 once the transitional period ends, given that EUTMs are EU-wide rights and the UK will no longer be part of the EU. The Bill contains (controversial) powers for the UK government to amend existing legislation to deal with issues that arise as a result of Brexit, and this would be one such example. 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. This will raise 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. The draft EU/UK Withdrawal Agreement expressly considers the status of pending EUTM applications. It proposes that, where there are existing applications for EUTMs in progress at the end of the transitional period, the applicant will have 9 months in which to file an application for an equivalent trade mark in the UK. Any such UK application will be given the same filing date as the EUTM application on which it is based. Where cancellation proceedings are in progress at the end of the transitional period, a subsequent decision holding the EUTM to be invalid will automatically apply to the corresponding UK trade mark that was created in respect of the EUTM. Whilst the landscape remains uncertain, and although it seems highly unlikely that EUTM 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. proprietors would simply lose their protection in the UK following Brexit, that is still a potential outcome, and 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-by-case basis. 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 inter-governmental 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. The application for an IR must be filed with the intellectual property office of the Home Mark (the Office of Origin) and must designate the Contracting Parties in which registered trade mark protection is sought. This does not amount to registration of the IR in the designated Contracting Parties; the IR must be forwarded to the designated Contracting Parties and examined by them in accordance with their national laws before that can happen. Once national registrations are granted, they become a bundle of national trade mark rights (as opposed to a single unitary right such as the EUTM). 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 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. Where the earlier trade mark was a UKTM, it will no longer be the case following Brexit 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. The draft Withdrawal Agreement proposes that the new UK mark that will be created in 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. respect of the EUTM will have the benefit of the seniority claim where the seniority claim is based on an earlier UKTM but the draft Agreement does not expressly cover the future position of the EUTM s seniority claim. It is possible that seniority claims of EUTMs 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. 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 5 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 5 years of the date of registration (or any subsequent 5 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 5 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 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 (or the end of any transitional period). Will EUTMs which are more than 5 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: 1. Review commercial strategy in the EU EUTM holders who want to continue using their EUTM in the EU after Brexit (or after any transitional period) could consider expanding their market into mainland Europe now and during any transitional period, 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 used 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 that is being made throughout the EU, so that these materials can be relied upon in any future revocation proceedings. 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 5 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 trade 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. 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 that is being made throughout the EU, so that these materials can be relied upon in any future revocation proceedings.
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. Visit the Brexit section of our website for further information at www.marks-clerk. com/home/knowledge-news/special- Articles/Brexit.aspx Graham Burnett-Hall Partner Solicitor brexit@marks-clerk.com +44 20 7420 0265 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 17 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. 2018 Marks & Clerk Properties Ltd Marks & Clerk is a registered trade mark.