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6 October 2020
Brexit and brands checklist: What should brand owners be doing now?
- Briefing
Here's a list of actions brand owners should consider taking to prepare for the upcoming end to the Brexit transition period on 31 December 2020.
It's split into actions to consider now and those to consider after 31 December 2020. Note that these actions will be relevant irrespective of whether there is a deal or no deal Brexit. The presence or absence of a deal will not affect the position. Click on "+" at the end of each suggested action if you would like to know more.
For more on how Brexit will impact brand protection and brand management, watch our recent webinar.
Actions to consider now
1. Prepare now on the basis that the transition period is highly likely to end on 31 December 2020.
- The UK left the EU on Friday 31 January 2020 and is currently in a transition period (also called an "implementation period" or IP period) which extends to 11pm on 31 December 2020. It seems unlikely this period will be extended even though extension is technically possible.
- During the transition period the UK continues to be bound by EU laws and to benefit from the existing EU IP regime. Once the IP Period expires, the law governing EU-wide IP rights will change significantly. We already know what these changes will entail, and the position is unlikely to be affected by any UK-EU trade deal.
- Brand owners can and should plan for these changes now.
2. Ensure that any pending EUTMs are prosecuted expeditiously (including resolving any straight-forward oppositions) to maximise the chances of them registering on or before 31 December 2020. This will mean you automatically obtain a comparable UK registration as opposed to the right to apply for the same mark in the UK (which could be objected to or opposed all over again).
- As of 1 January 2021, EUTM registrations will no longer cover the UK. However, the owners of EUTM registrations in existence on 31 December 2020 will be given a new comparable UK trade mark registration automatically and for free (called a "comparable trade mark (EU)"). Here we call them comparable UK registrations. EUTM registrations will continue to cover the EU27 only.
- Comparable UK registrations will have the same priority, filing, seniority and renewal dates as the EUTMs from which they derive. It is possible to opt out of receiving a comparable UK registration.
- Conversely, all EUTMs pending on 31 December 2020 will have to be refiled in the UK if UK protection is required. This includes EUTMs that have been accepted for registration but not yet registered. If the UK application is filed within nine months of the end of the transition period (ie by 31 September 2021), it can claim the same priority, filing and seniority dates as the corresponding EUTM.
- Any refiled UK application can be objected to or opposed in the normal way. The fact that an objection or opposition has been overcome for the corresponding EUTM will be irrelevant. Therefore, if UK protection is required, there is a significant advantage to ensuring EUTMs register before 31 December 2020.
- International marks designating the EU will be dealt with in the same way.
- The same system will also apply to Registered Community Designs (RCDs) and International Designs designating the EU. The new comparable UK design registration will be called a "re-registered design". While many of the issues mentioned in this note for trade marks will be relevant to registered designs, the overall position is much more straight-forward (since designs are relatively easy and quick to register and are not subject to use requirements).
3. For similar reasons, try to keep your EUTM and Registered Community Design (RCD) applications and registrations alive (avoiding final refusals and cancellations) until 31 December 2020.
- Any EUTM or RCD applications that have been finally rejected or withdrawn on or before 31 December 2020 will not be able to take the benefit of the new nine-month "priority period".
- Likewise, any EUTM or RCD registrations that have been finally cancelled or surrendered (or allowed to lapse with no prospect of resurrection) on or before 31 December 2020 will not be protected as comparable UK registrations.
4. For new marks, consider filing separate applications in the UK and EU from now onwards, particularly if UK protection is required quickly (eg for licensing or enforcement purposes).
- Any EUTMs filed from now onwards are unlikely to register on or before 31 December 2020. This means that a separate UK application will be required anyway. It might be better to file separately in the UK straight away rather than during the nine-month "priority period" when there are likely to be delays.
5. If a pending EUTM is unlikely to register on or before 31 December 2020, consider refiling in the UK now, but only if UK protection is required quickly (eg for licensing or enforcement purposes) and any loss of priority/filing date in the UK will not give rise to problems.
- If there is no urgent need for UK protection, it will usually be better to refile in the UK during the nine-month "priority period". The UK application can then take the benefit of the priority, filing, and seniority dates attaching to the corresponding EUTM.
6. Consider whether any EUTMs should be refiled at EU level if they have been used only in the UK in the last five years. This particularly applies to important marks that have low-level or old UK use.
- The EU has said that genuine use of an EUTM in the UK on or before 31 December 2020 is likely to count as use of the EUTM after 31 December 2020 if it is within the relevant five-year period. So, if there is genuine use of an EUTM in the UK right up to and including 31 December 2020, then the EUTM should not be vulnerable to a non-use attack until five years later (ie 1 January 2026). However, the EU has also said that the relevance of UK use will decrease over time and that only a decision of the CJEU will ultimately decide the relevance, if any, of UK use.
- Given this slight uncertainty, consider refiling important EUTMs at EU level where they have low-level or old UK use (and where there is no or insufficient genuine use in the remaining EU27).
- Conversely, the UK has said that genuine use of an EUTM in the EU27 on or before 31 December 2020 will count towards use of the comparable UK registration if it is within the relevant five-year period. This means that a comparable UK registration cannot be revoked for non-use until at least five years after the last genuine use on or before 31 December 2020 in the EU. So, if there is genuine use of an EUTM in the EU27 right up to and including 31 December 2020, then the comparable UK registration should not be vulnerable to a non-use attack until five years later (ie 1 January 2026).
7. Where marks currently registered or used in the UK only are regularly relied on to block third-party EUTM applications, consider applying to register those marks as EUTMs or separate national rights elsewhere in the EU27 (depending on clearance and use plans).
- After 31 December 2020, it won't be possible to rely on UK prior rights to prevent the use and/or registration of EUTMs. If a UK prior right is regularly relied on in this way, consider applying to register such mark at EU level or nationally in an EU27 member state.
8. Carefully review pending and threatened infringement actions involving EUTMs, RCDs and Unregistered Community Designs (UCDs) – there might be strategic advantages and disadvantages to certain acts, including commencing actions before 31 December 2020.
- After 31 December 2020, UK courts will no longer qualify as EUTM courts. They will not therefore be able to determine questions of infringement of EUTMs, grant pan-EU injunctions or cancel EUTM registrations. However, UK courts will continue to have jurisdiction in relation to any proceedings that were pending on 31 December 2020, and proceedings or actions relating to such proceedings under Articles 29-31 of the Brussels Recast regulation. The courts of other EU member states and the EUIPO will recognise and enforce any measures or judgments arising from the above.
- The position is the same for EUTM courts in EU27 member states. After 31 December 2020, any measures or judgments granted by such courts relating to the infringement or validity of EUTMs will not be recognised or enforced in the UK unless they result from proceedings pending on 31 December 2020 or related actions or proceedings.
- Threatened proceedings should be carefully reviewed to determine the best time to institute. Similarly, pending proceedings should be reviewed to determine how to mitigate or leverage the impact of the end of the transition period, particularly as regards any counterclaims for cancellation.
- Note that, where EUTM infringement proceedings were pending in the UK on 31 December 2020, the UK courts will also have power to grant an injunction to prohibit unauthorised use of any comparable UK registration (which derives from any EUTM alleged to have been infringed), and cancel the comparable UK registration where there was a counterclaim for revocation or invalidity of the EUTM from which it derives.
- Note also that injunctions based on EUTMs granted before 31 December 2020 (by the UK or an EU27 member state court) will remain in force in the UK (but under the comparable UK registration not the EUTM) unless there is an order of the UK court to the contrary. It is not yet clear whether the EU27 member state courts will continue to recognise injunctions granted by the UK courts before 31 December 2020. It is assumed they will apply similar rules to the UK.
9. Review opposition and cancellation actions filed against EUTMs and RCDs (whether at the EUIPO or in a designated EU member state court) as soon as possible – there might be strategic advantages and disadvantages to certain acts.
- The EUIPO has said that, after 31 December 2020: UK prior rights will be disregarded in all EUTM opposition and invalidity actions; relative grounds of refusal or invalidity that exist in the UK only (even if attaching to a prior EUTM) will be ignored; and UK-based reputation will not count towards reputation of an EUTM. It has also stated that while use of an EUTM in the UK on or before 31 December 2020 will be taken into account (if within the relevant five-year period), the relevance of such use will decrease progressively over time.
- While only a decision of the CJEU will ultimately decide if the above is correct, it is consistent with current EUIPO practice. In view of this, advice on disputes should be sought as soon as possible. There might be strategic advantages to trying to accelerate or decelerate certain actions, relying on a mixture of UK and non-UK prior rights and relying on EU27 use and reputation.
- Note that, where an EUTM is declared invalid or revoked after 31 December 2020 in an action that was pending on that date, the comparable UK registration will also be declared invalid or revoked to the same extent except where the grounds for invalidity or revocation do not apply in the UK – see our separate article on this. The same is not true for EUTM oppositions. EUIPO opposition decisions issued after 31 December 2020 will not affect any UK application for the same mark that is filed, which will have to be separately opposed.
- Note also that opposition and cancellation actions against UK rights are unlikely to be significantly affected. UKIPO and court proceedings based on prior EUTMs which are ongoing at 31 December 2020 will continue, but under the UK Trade Marks Act 1994 (on the basis of the law as it stood prior to 31 December 2020).
10. Seek advice if you rely on UCDs and/or the new UK supplementary unregistered design – protection might not arise after 31 December 2020 unless the design in question is first disclosed in the EEA (for UCDs) or UK (for UK supplementary unregistered designs).
- UCDs in existence as at 31 December 2020 will continue to be protected in the UK until the corresponding EU right expires. These UK rights will be called "continuing unregistered Community designs".
- A new UK "supplementary unregistered design" is also being created (which will be equivalent to the UCD but cover the UK only) for new designs made available after 31 December 2020. This will sit alongside the existing UK unregistered design right.
- There has been debate about whether (after 31 December 2020) UCDs will arise if the design in question is first disclosed in the UK. Likewise, there is conflicting information about whether the UK supplementary unregistered design right will arise if first disclosure occurs in the EU27.
- While the uncertainty continues, those who rely on unregistered designs at both UK and EU level should consider: whether simultaneous disclosure (eg online) in both jurisdictions can be achieved (although we don’t yet know if this will be sufficient); whether they might be able to benefit from the other form of UK unregistered design right, which protects the shape and configuration (but not surface decoration) of certain products; and relying on registered designs.
11. Make sure that key agreements are clear as to whether they cover the UK and the new UK trade mark and design rights. Carefully consider jurisdiction clauses.
- In the UK, any licences, consents, security interests and documents in existence before 31 December 2020 and covering an EUTM or RCD registration will be deemed to cover the comparable UK registration or re-registered UK design, as appropriate. This is subject to any agreement to the contrary.
- However, there are no similar presumptions for references to the EU, EUTM/RCD applications or unregistered rights. Furthermore, we do not know how agreements that are not governed by English law might be interpreted.
- It is therefore worth reviewing key agreements (such as co-existence agreements, settlements and licences) to ensure that they are clear. The clauses governing territory, rights, governing law and jurisdiction should particularly be considered.
- New agreements should deal with EU and UK rights and territories separately. Jurisdiction clauses should be carefully drafted, particularly where EUTMs are relevant.
12. Check that your current advisers can (like Taylor Wessing) continue to represent you in all EUTM and RCD actions and disputes before the EUIPO after 31 December 2020. The same is true for employee representatives.
- Generally, UK-based professional representatives will not be able to represent clients before the EUIPO after 31 December 2020. EEA representation is required. However, a UK-based professional representative will continue to be able to represent a client in all stages of an EUIPO procedure after 31 December 2020 where they were acting on such procedure on or before that date.
- Natural or legal persons having their domicile or principal place of business or a real and effective industrial or commercial establishment in the EEA may be represented before the EUIPO by an employee. According to the EUIPO, the employee must be in the EEA. Furthermore, the EUIPO has said that the exception for on-going procedures mentioned above does not apply to employees.
- Those with in-house UK teams used to handling EUIPO matters will therefore have to consider appointing EEA-based representatives or qualifying employees, even for on-going procedures. The User Area for such employees will change to that available for users in third countries and the EWS portal will no longer be available. Local copies of communications and data should be taken where necessary. Note that representation is not required for the filing or renewal of an EUTM or RCD.
- Our team will be able to continue to handle the full range of actions and disputes before the EUIPO.
- More information on representation is available here.
13. Consider appointing UK-based representatives for your new comparable UK registrations and re-registered designs so that, if substantive steps need to be taken, someone qualified in UK law can advise.
- An address for service within the UK, EEA or Channel Islands is currently sufficient. However, the UK is consulting on whether to omit the EEA.
- It is usually preferable to have a UK address for service and UK representation in case substantive advice on UK law is required (even if just advising on conflicting third party applications).
14. Obtain advice if you might seek to convert an EUTM into a UK mark or claim seniority from a UK mark for an EUTM.
- Any application to convert an EUTM into a UK mark should be submitted by 31 December 2020. Advice should be sought first eg as to the pros and cons of conversion as opposed to obtaining a comparable UK registration/refiling in the UK.
- Any seniority claim based on a UK application or registration must be filed by 31 December 2020. Again, advice should be sought.
- Note that, where an EUTM registration has a valid claim to seniority from a UK right, that seniority claim will automatically form part of the newly-created comparable UK registration. (The original UK trade mark from which seniority was claimed does not need to be alive or kept alive although we recommend that it is, at least in the medium-term.) Likewise, where a pending EUTM application has a valid claim to seniority from a UK right, seniority can also be claimed for the corresponding UK application if filed within the new nine-month "priority period".
15. Generally, don't to let UK registrations lapse or be surrendered, even if duplicated by EUTMs.
- Generally, it is worth maintaining UK national registrations (even if they post-date identical EUTMs) until the scope of comparable UK registrations is fully tested.
16. If you rely on any .eu domains, consider whether you will continue to qualify to hold them after 31 December 2020.
- After 31 December 2020, only those who are established in, citizens of or resident in an EU27 member state will be eligible to hold .eu domains. Notifications will be sent by EURid to the holders of .eu domains for which there is a UK address asking them to update their address details if they meet the new eligibility criteria.
- Those who do not meet the new criteria or who fail to update their address details will have their .eu domains withdrawn on 1 January 2021 (meaning that such domains will no longer work) and revoked on 1 January 2022 (meaning that such domains are available for others to register).
- For more information, see the EURid website.
17. Carefully consider how the new rules on exhaustion will affect your business and the potential to lobby around the new UK regime.
- EEA-wide exhaustion will continue to apply in the UK for the medium term. It means that IP owners will not be able to use their IP rights to prevent goods first put on the market in the EEA (by the IP owner or with its consent) from circulating into the UK (subject to the usual rules). The UK is considering whether this regime should be changed and there is scope to lobby on the new regime.
- Meanwhile, IP owners can potentially object if goods first put on the market in the UK are then put on the market in the EEA. There could be an IP infringement in that EEA country. Those used to exporting goods from the UK to the EEA or selling UK-derived goods in the EEA will need to consider the IP position.
- Note that IP rights that were exhausted in both the UK and EEA before 31 December 2020 remain exhausted in those jurisdictions after that date.
18. Consider whether 2020/21 and subsequent budgets need increasing to account for additional filings, renewals, and likely increase in watch notices and disputes.
Actions to consider on or shortly after 31 December 2020
1. Duplicate your internal records for EUTMs and RCDs to reflect the newly-created comparable UK registrations and re-registered designs.
- The registration number of a comparable UK registration will consist of the last eight digits of the registration number of the EUTM from which it derives with the prefix "UK009". For a re-registered design, it will be the full registration number of the RCD from which it derives with the prefix "9". This should make it relatively easy to batch update records.
2. Take particular care when copying over renewal dates from EUTMs and RCDs to the newly-created UK rights. Remember that renewing EUTMs and RCDs early will not negate the need to renew the UK right.
- Where an EUTM or RCD is due for renewal after 31 December 2020, renewing before that date will not eliminate the need to renew the comparable UK registration or re-registered design. There are no cost savings to be had by renewing EUTMs or RCDs early. The UKIPO is, however, allowing renewal any time up to six months after the renewal date with no late renewal fee.
3. Determine whether any pending EUTM and RCD applications should be refiled in the UK and file before 30 September 2021 to take the benefit of the new nine-month "priority period".
- To benefit from this nine-month "priority period", the EUTM application must be pending on 31 December 2020 and the refiled UK application must relate to the same mark as, and the specification used must be identical to, or contained within, that EUTM application.
- Likewise, the RCD must be pending on 31 December 2020 and the refiled UK application must relate to the same design.
4. Review brand strategies and watches for adequacy. Particularly monitor for new UK applications deriving from EUTMs you have already opposed (which you will need to separately oppose in the UK). Also be alive to bogus UK applications and invoices.
- Any refiled UK application will need to be opposed in the normal way. The fact that an opposition has been filed or successful in respect of the corresponding EUTM will be irrelevant.
- Bogus applications are likely during the new nine-month "priority period", as are bogus invoices. Remember that invoices are never sent directly from the UKIPO or EUIPO to where parties are professionally represented.
5. Remember to record any registrable transactions (eg of licences or security interests) at the UKIPO against the newly-created UK rights (or refiled applications) – recordals against EUTMs and RCDs will not automatically port across.
- Any licences of, or security interests granted over, EUTMs and RCDs will need to be recorded at the UKIPO in respect of the corresponding UK right.
6. Remember to file separate trade mark and design applications at UK and EU level if protection is required in both jurisdictions.
- After 31 December 2020, separate applications will be required at UK and EU level if protection is required in the UK and EU27.
- Remember that UK nationals and persons established in the UK can still file and hold EUTMs; it is just that those EUTMs will no longer cover the UK.
7. Refile any applications for action (AFAs) designating the UK (where filed via another EU27 member state's customs office) or designating any EU27 member state (where filed via UK customs).
- An AFA filed via UK Customs and designating the UK will remain in place until expiry. However, if it was filed via another EU27 member state's customs office, a new AFA will need to be filed in the UK. This is principally because the UK Border Force and HMRC will not have access to the COPIS database that EU Customs share.
- Likewise, the EU Commission has said that AFAs filed via UK Customs and designating any EU27 member states will need to be reapplied for via an EU27 member state's customs office.
8. Take care when clearing new brands in the UK – additional risks will need to be considered.
- Remember that comparable UK registrations (and re-registered designs) can, in some circumstances, be created after 31 December 2020 from EUTM and RCD registrations that have expired or been removed from the EUIPO register.
- Also bear in mind that UK trade mark and design applications can be filed up until 30 September 2021 claiming the priority, filing and seniority dates of a corresponding EUTM or RCD (as appropriate).
- Finally, consider that seniority claims might be buried within comparable UK registrations (see above entry on seniority).
9. Remember that comparable UK registrations (and re-registered designs) deriving from International registrations (IRs) designating the EU will be separate stand-alone UK registrations that do not form part of the WIPO system. They will need to be renewed and administered separately. However, there is a way of bringing comparable UK registrations back into the IR system using the system of replacement – a WIPO procedure that allows an IR designation to replace a national right.
- The system of replacement allows an IR designation to replace a national right. To take advantage of the system, the holder of an IR that currently designates the EU should designate the UK for that IR. An application should then be filed for that UK designation to "replace" the comparable UK trade mark registration. The earlier priority and filing dates of the comparable UK registration will be retained and the replaced right will form part of the IR system. There is no urgency to do this – all steps can be taken after 31 December 2020.
- There is obviously a cost involved in designating the UK for an IR. Whether that cost will be recouped by savings in renewal and administration fees (by effectively bringing the comparable UK registration back within the IR) will depend on the mark in question, its longevity and any plans for it. For more information, see our article here.
- Note that, to file an IR based on an EUTM, the applicant must have a real and effective place of business in the EU. Therefore, IRs should be filed before 31 December 2020 if they are to use an EUTM as the base registration and the applicant only qualifies as having a real and effective place of business in the EU because it has an office in the UK (but note that an IR based on an EUTM is rarely a good idea).
- Also note that existing IRs based on EUTMs will not be at risk simply because the holder no longer has a real and effective place of business in the EU (as long as it did so at the time of filing).
10. Consider extending your UK trade mark registrations to Gibraltar if you have previously been relying on EUTMs for coverage there. Factor in that UK marks automatically cover the Isle of Man (whereas EUTMs no longer will) when deciding whether to file and maintain UK rights.
- EUTMs will no longer cover Gibraltar or the Isle of Man after 31 December 2020. Therefore, it will be necessary to register your UK marks in Gibraltar if protection is required there. UK marks automatically cover the Isle of Man and so any comparable UK registrations (whether deriving from EUTMs or IR designations) will automatically cover the Isle of Man. This should be factored into any decision about whether to file and maintain UK marks.
- Since EUTMs do not give protection in Guernsey, nothing will change. Jersey unilaterally recognises EUTMs and IRs designating the EU as giving protection in Jersey. There is nothing yet to suggest this will change after 31 December 2020.
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