What's the development?
- By the end of 2025, the owners of vast numbers of EUTM and comparable UK trade mark registrations will be unable to prove use, meaning that they will struggle to maintain and enforce those registrations.
- Those at risk are: (a) EUTM registrations that were registered on or before 31 December 2020 but that have not been put to genuine use in the EU27 after that date, or (b) comparable UK trade mark registrations that have not been put to genuine use in the UK after 31 December 2020.
- The issue arises as a result of Brexit and the 'grace period' that was effectively given to the owners of EUTMs and comparable UK trade mark registrations to put their marks into use in the relevant jurisdiction. That grace period will expire at the end of 2025.
- Although the grace period does not expire until the end of 2025, in reality, it will become increasingly difficult for the owners of marks at risk to prove use as time goes on this year. That is why brand owners need to act now.
- Brand owners should carefully review their portfolios to check whether any of their marks fall into either of the above two categories. If they do, they should consider the options including resolving any pending disputes based on these registrations, attempting to commence use in the relevant jurisdiction (either directly or through others), or refiling for the mark (where there is a legitimate commercial rationale for doing so).
What is proof of use?
The UK and EU operate a 'use it or lose it' trade mark system. This is manifest in two ways:
- Where a trade mark registration has not been put to genuine use for any continuous five-year period in the relevant jurisdiction, the registration is generally vulnerable to revocation for non-use on the application of a third party. If a registration has been used on some, but not all, of the goods/services covered, it will be partially revoked (for those goods/services for which use has not been shown).
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Those defending opposition, invalidity and infringement actions can request that the other side prove use of any registrations relied upon in the action if those registrations are more than five years old. Where genuine use cannot be shown for particular goods/services, they are generally not taken into account in the action.
This means that trade mark owners must generally be able to prove use of their marks in the relevant jurisdiction once they have been registered for five years or more. It's worth noting, however, that an EUTM does not necessarily need to have been used across the EU. In fact, use in one member state alone can sometimes be sufficient to maintain and enforce the EUTM as a whole.
This is a significant advantage of an EUTM and is why (pre-Brexit) many UK-based businesses registered their marks as EUTMs even though they only intended to use the mark in the UK – they could obtain EU-wide trade mark coverage while potentially only having to use the mark in the UK.
Why the current issue around use?
- Comparable UK trade marks. At the end of the Brexit transition period (31 December 2020), all EUTMs (whether future or existing) ceased to cover the UK. To compensate, the UK government issued a national UK trade mark registration (called a comparable UK trade mark registration) for each EUTM registration in existence. The comparable UK trade mark registration was given the same priority, filing and registration dates as the parent EUTM from which it derived. This meant that some comparable UK trade mark registrations were more than five years old on creation and so subject to the proof of use requirements described above. However, some had never been used in the UK (eg because the parent EUTM had only ever been used in other EU member states but not the UK). A solution was drawn up to address this.
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EUTMs. Up until the end of the Brexit transition period, the owner of an EUTM registration could potentially prove use (and so maintain and enforce the registration) by showing that it had used the mark in the UK. At the end of the Brexit transition period, EUTMs no longer covered the UK and so UK use potentially became irrelevant. Again, a solution was implemented to address this.
What was the solution?
- Comparable UK trade marks. Use of a parent EUTM in the EU27 (the remaining EU member states ie not including the UK) would be taken into account for proving genuine use of the corresponding comparable UK trade mark registration as long as the EU27 use (a) occurred on or before 31 December 2020 and (b) was within the relevant five-year use period. The EU27 use is 'ported' across to the comparable UK trade mark.
This effectively gave the owners of comparable UK trade mark registrations (who had put the parent EUTM to genuine use in the EU27 up until the end of the Brexit transition period) a further five years to put the comparable UK trade mark to genuine use in the UK. Likewise, it effectively gave the owners of EUTMs (who had put the EUTM to genuine use in the UK up until the end of the Brexit transition period) a further five years to put the EUTM to genuine use in the EU27. These five-year periods expire at the end of 2025 (after 31 December 2025).
What happens as the end of 2025 approaches?
As this year progresses, the 'ported' use will increasingly be at the beginning of the five-year proof of use period. While use at the very beginning of the proof of use period can (depending on the facts) be sufficient to maintain and enforce the registration, it seems likely that the EU (and potentially also the UK) will start to give less weight to 'ported' use and expect use to have actually commenced in the relevant jurisdiction.
What should brand owners do?
- Brand owners who own any (a) EUTM registrations that were registered on or before 31 December 2020 but have not been put to genuine use in the EU27 after that date, or (b) comparable UK trade mark registrations that have not been put to genuine use in the UK after 31 December 2020, should consider the options.
- The options include (a) doing nothing (and accepting that it will be almost impossible to maintain/enforce these registrations by the end of 2025) (b) attempting to commence use in the relevant jurisdiction either directly or through others (eg through licensing or online sales), or (c) refiling for the mark (where there is a legitimate commercial rationale for doing so ie subject to potential bad faith allegations).
- Where any pending 'disputes out' are based on registrations falling within either of these two categories, brand owners will need to consider the impact on the merits of the dispute. In some cases, it might be necessary to try to settle the dispute.
Please contact a member of our team or your usual Taylor Wessing if you would like more assistance on this issue.
