Brexit update – December 2018

EU Trade Marks and Community Designs – Deal, no deal, or no Brexit at all?

What is the current situation?

Considerable doubt remains about how, when or even if the UK will leave the EU. However, if the UK leaves without a deal then the outcome in relation to IP should be essentially the same as it would be if there is a negotiated exit – the main difference is that there will be no transitional period without a deal.

If Brexit becomes fully effective, EU trade mark registrations (“EUTMs”) and registered Community designs (“RCDs”) would cease to have effect in the UK, but would 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.

Whether the UK should leave the EU with a deal or without one, the UK Government has indicated that all existing EUTMs and RCDs would be protected in the UK as it leaves the EU and, in place of those EU-level rights, around 1.7 million new UK trade marks and registered designs would be granted, to afford at a national level equivalent effective dates and scope of protection.

If there is a negotiated exit then there will be a transitional period at least through to 31 December 2020 – otherwise the transition to UK national rights would become effective on 29 March 2019.

European patents are unaffected by Brexit as the European Patent Office is not an EU organisation.

The possibility remains that the UK might not leave the EU at all; the European Court of Justice has just confirmed that, in principle, the UK could halt Brexit without requiring the consent of the other 27 EU member states which would considerably simplify the process of the UK withdrawing from the Brexit process. However, it seems unlikely that Brexit would be halted altogether unless there is a further vote by the British people in favour of remaining in the EU.

Of course, if there were no Brexit at all, EUTMs and RCDs would simply continue to cover the UK.

What happens to EUTMs and Community Designs at any effective date of Brexit?

For EUTMs and Community designs, the expectations for either deal or no deal scenarios are largely the same, except that with no deal, the effective Brexit date could be as soon as 29 March 2019, but if a deal were secured, this would likely postpone the effective Brexit date until at least 31 December 2020.

  • For EUTMs or RCDs granted before the effective Brexit date, protection would continue through creation of a comparable and enforceable UK right. This should be created free of charge by the UK Intellectual Property Office using the data available from the EU Intellectual Property Office, and with no action required by the rights holder. Rights holders not wishing to have such a new UK registered trade mark or design may surrender it. Otherwise, the newly created UK right would fall due for renewal at the same time as the corresponding EU right.
  • For EUTM and RCD applications pending at the effective Brexit date, there would follow a 9 month period during which equivalent UK applications could be filed, retaining the effective EU application date. UK national application fees would be incurred.
  • Unregistered Community design rights which arise before the effective Brexit date would continue to enjoy protection in the UK for at least the remainder of their term of protection, without any required action by the rights holder.

What should you consider doing now?

Where you have existing EUTMs or RCDs:

Based on the latest statements and guidance issued by the UK Government, we do expect them to unilaterally honour EUTMs and RCDs which are granted by the date of Brexit, be that in the event of no deal or at the end of the 21 month transition period if a version of the Withdrawal Agreement can be accepted by the UK Parliament and should there be no other obstacles to an orderly Brexit.

Some precautionary UK national trade mark applications could still be filed now, especially for high value marks, so as to provide certainty, but this would likely result in a duplication of rights in the long run.

There are other circumstances 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 Brexit became a consideration, just as they are relevant now.

When considering new EU applications:

If Brexit were to take effect as soon as 29 March 2019, i.e. if there is no deal or no postponement of that deadline, it is unlikely that the EUTM registration procedure would be completed before the effective date of Brexit for any new EU applications filed now, such that separate UK application fees would later need to be incurred. Consideration could be given to simultaneously filing UK trade mark applications with any new EU trade mark applications filed now, but there would still be the potential that these separate UK national applications would be unnecessary if a deal is concluded quickly and which allows for a transition period.

Opposition proceedings:

Without a firm indication of when the effective Brexit date might fall, careful consideration should be given to reliance upon UK rights in any EU opposition proceedings, in that proceedings initiated now are unlikely to be concluded as early as March 2019 if there is an early Brexit date, and national UK rights would cease to be a valid basis for opposition to an EU right. Likewise, some thought should be given to reliance upon an EU right within any UK opposition procedure, although EU rights protected at the point of Brexit are expected to be recognised and enforceable post Brexit as if they were national rights. Should the effective date of Brexit be postponed, and especially if there were a 21 month transition period, there is more chance of opposition proceedings reaching their conclusion without adverse effect upon earlier rights relied upon in those proceedings.

If you would like to discuss the current scope of your rights, please contact your usual advisor at AA Thornton.

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