The UK is to leave the EU (“Brexit”) on 29 March 2019. When Brexit becomes fully effective, EU unitary trade mark registrations (“EUTMs”) and registered Community designs (“RCDs”) will cease to have effect in the UK, but will continue to have effect in the remaining 27 member states. Currently, and up until that point, both EUTMs and RCDs continue to have effect in the UK.
The draft Withdrawal Agreement between the UK and EU sets out the terms upon which the UK will leave the EU, but remains a draft document. The draft provides for a 21 month transitional period until December 2020, during which EUTMs and RCDs would continue to be recognised and enforceable in the UK. Provided that the Withdrawal Agreement can be settled upon and signed in the short term, EUTMs and RCDs will continue to have effect in the UK beyond the Brexit date of 29 March 2019, and through to 31 December 2020.
The UK Government has indicated that all existing EUTMs and RCDs will be protected in the UK as it leaves the EU and, in place of those EU-level rights, more than 1.5 million new UK trade marks and registered designs would be granted automatically and free of charge. The UK Intellectual Property Office (“UKIPO”) has clarified that this is subject to agreement to the Withdrawal Agreement, but adds that: “In any scenario, including one which does not involve a deal between the UK and the EU, the government will seek to minimise disruption for business and to provide for a smooth transition.” For existing EUTMs and existing RCDs, the UK IPO states that “… for all scenarios, the government aims to ensure continuity of protection and avoid the loss of those rights. In doing so, our overall objective is to provide maximum clarity and legal certainty for right holders and third parties. The government is looking at various options and is discussing the best way forward with users of the system.”
The possibility of the UK leaving the EU without an agreement is receiving increasing media exposure as the date of Brexit draws closer. The UK Government has begun to publish a number of technical notes of guidance to prepare for a ‘no deal’ scenario, but maintains that ” … a scenario in which the UK leaves the EU without agreement (a ‘no deal’ scenario) remains unlikely given the mutual interests of the UK and the EU in securing a negotiated outcome.” Negotiations, including in relation to the Withdrawal Agreement, are said to be continuing “at pace”, but with preparations for all eventualities, including ‘no deal’, being the duty of a responsible Government.
Should no deal be reached, 29 March 2019 would become the effective date at which EUTMs and RCDs would no longer cover the UK, but the above statements from the UK Government provide some assurance that a loss of rights will be avoided in any scenario, including one of ‘no deal’.
Based on these statements given by the UK Government, we expect that the UK Government will unilaterally honour EUTMs and RCDs which existed at the date of Brexit in the event of no deal. However, the UK Government has not guaranteed that to be the case. IP rights holders should therefore consider their position now in relation to rights currently protected by an EU registration. As discussed above, bearing in mind the intention of the UK Government appears to be to automatically duplicate EU rights into the UK, you may simply do nothing and wait until the situation is clarified. Alternatively, if you cannot tolerate this element of risk, then UK national trade mark applications could be filed now, especially for high value marks, so as to provide certainty, even though this could result in a duplication of rights when transitional provisions are clarified.
There are other circumstances, too, in which national trade mark applications 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 the vote for Brexit, just as they are relevant now.
We continue to monitor for developments in this important area, ready to inform our clients whenever there is real news to report. If you would like to discuss the current scope of your rights and identify any bolstering of protection which might be appropriate, please contact your usual advisor at AA Thornton.
Author: Rachel Havard | Published: September 2018