9 April 2020
Brands update - April 2020 – 7 of 8 Insights
A number of IPOs have issued guidance in response to the COVID-19 pandemic, including indicating which, if any, deadlines are extended, acceptable forms of communication and whether hearings are proceeding.
Our table summarises guidance from over 50 IPOs around the world including the UKIPO, EUIPO, WIPO, USPTO and Chinese PTO. Brand owners and their advisers will need to regularly review guidance issued and ensure that any deadlines are met within the appropriate time frame or extensions of time are requested.
Since some IPOs are continuing to communicate by post and have not deferred deadlines, post will also need to be monitored. Where a particular deadline is moved or extended, it is expected that subsequent deadlines (such as for a counter-party) will also be extended.
It will be difficult to obtain and lodge original signed documents, certified copies and notarised and legalised documents. The UKIPO has said that it is able to email certified copies of entries on the Register to applicants with a hard copy to follow by post. Likewise, some notaries are still operating including by way of home and office visits (virtual notarisations are generally discouraged due to the difficulty in identifying the person signing).
Even with these measures, lodging documents with overseas IPOs will present challenges. Some IPOs, such as that in Saudi Arabia, have already announced that original documents can be filed at a later date. Where this is the case, it will be important to track deadlines and supply originals as soon as it becomes possible. Others have been silent on the point and it will be important to liaise at an early stage with local lawyers on the issue.
Court procedures and time lines are being rapidly shifted, with the courts in some jurisdictions completely shutting down and others prioritising important cases or moving to e-filing and virtual hearings. Those with pending or potential court actions should proceed carefully and seek advice where necessary. We are already aware of at least one case in the USA in which a claimant was heavily criticised for bringing an action for interim relief for trade mark infringement given the current pandemic and the nature and scale of the alleged infringement.
Litigants should also ensure that changes to working patterns such as remote working do not give rise to any additional issues. In particular, document creation and retention policies should be reviewed and procedures put in place to protect privilege. More generally, IP enforcement strategies should be reviewed and might need to be streamlined in the short term, particularly for those dealing with numerous small-scale infringements. Standard cease and desists letters might need to be amended, time-scales flexed and procedures put in place to send and monitor hard copy post.
Some IPOs, such as that in the Benelux, have warned that their online trade marks and designs databases might not be up to date. The same could be true of other online databases. Bear in mind that rights could be resurrected and that data might not be accurate or complete especially when conducting clearance searches.
Now is a good time to focus on key projects and ensure that a more streamlined approach to brand protection is taken. It is also a good time to audit your portfolio and make sure that it meets the needs of the business. Costs can be managed down by using the full 6 month priority period before filing in multiple jurisdictions, limiting applications to key goods and services, merging registrations, relying on registered designs and taking a more judicious approach to renewal (where appropriate).
A trade mark registration is vulnerable to revocation if it has not been put to genuine use in relation to the goods and services for which it is registered within any continuous period of 5 years from registration, unless there are proper reasons for non-use. Going forward, we are likely to see an increase in claims that the COVID-19 pandemic constitutes proper reasons for non-use.
This should be kept in mind when clearing new brands and otherwise considering issues of revocation. Whether COVID-19 constitutes proper reasons for non-use will depend on how use has been impacted, what (if anything) the trade mark owner has done to try to overcome the issue, and what preparations for use had been made before the pandemic (see our short article on the issue).
It is likely that a variety of IP-related agreements will be affected by the current pandemic including manufacturing, supply chain, franchising, sponsorship, events, publishing, media agency and settlement agreements. In many cases, the parties will be able to reach a commercial solution.
If they cannot, agreements will need to be reviewed to determine the impact, whether the agreement can and should be varied or terminated (including issues of force majeure and frustration), damages, notification requirements and mitigation. We are already advising a number of clients on these issues (see our article on force majeure and frustration here).
All agreements which have not yet been executed should be reviewed for the potential impact of COVID-19. Remember that it will not be possible to rely on force majeure clauses or frustration now that COVID-19 is in the contemplation of the parties to the agreement; specific drafting will be required.
Even relatively straight-forward co-existence agreements will need to be reviewed to determine if undertakings such as those to withdraw particular trade mark applications, change brands and run off stock can be complied with within the timescale envisaged.
Businesses are under increased scrutiny around such issues as their financial resilience (share prices, director's duties, closures, funding, insolvency etc), the treatment of employees (protection from infection, overwork, staff retention, pay etc) and customer service (the availability of compensation/refunds, approach to insurance claims, service levels, profiteering, stockpiling, unfairly exploiting the crisis etc).
Mainstream and social media should be proactively monitored and urgent action taken where necessary. Our Reputation Management team (among others) is already assisting a number of clients with communications to regulators, law enforcement, customers, suppliers, employees, the media and public, as well as helping with adverse and misleading mainstream and social media posts.
A number of bogus letters from IPOs asking for payment for deferral of deadlines and other matters have already come to light. Remember that IPOs will always communicate with an applicant's local representative, not with the applicant directly. If in doubt about whether a request for payment or other matter is legitimate, seek input from your advisers.
The British Standards Institution has already noted an increase in counterfeit and suspicious goods fuelled by issues of supply and demand and greater reliance on online purchasing. This will be exacerbated by the fact that customs authorities and Trading Standards are unlikely to be at full capacity.
To tackle the issue, brand owners should consider focusing their resources on the online environment (including social media which is increasingly being used to sell bogus products), using any spare employee capacity to help monitor for infringements, liaising with competitors and working with online platforms.
IP lawyers might also need to consider issues around consumer protection and unfair commercial practices, data privacy and security, privacy and confidentiality (eg relating to remote working and new forms of sale and supply), supply chain disruption and management, IT and outsourcing, internal policies, compulsory licensing/crown use, the use of electronic signatures, as well as the risks of cyber-attacks, phishing and other types of fraud.