What to do now to protect your trade marks in a no deal Brexit scenario

This is an update to our previous note of 31 January 2019 which gave guidance on and compared the impact of a No Deal Brexit and Deal Brexit on brand portfolios. Since the risk of a No Deal Brexit on 29 March 2019 (now only 50 days away) looms ever larger, this note focuses just on that. If there is a deal, with a Withdrawal Agreement, or if Article 50 is extended to postpone Brexit, then please refer to our earlier note. We will shortly be issuing a separate note on what to do in light of Brexit in trade mark disputes (litigation and registry actions).

The key change since our last note is that the draft UK law on trade marks in a No Deal scenario has now been provisionally passed. The Trade Marks (Amendment etc) (EU Exit) Regulations 2018 (the "Regulations") completed their passage through the UK parliament on 6 February 2019. They will come into force on 29 March 2019 if there is No Deal.

Should brand owners take urgent action?

Brand owners should preferably be making contingency plans for a No Deal Brexit now – see particularly points 2, 3, 4, 5 and 12 below – but a lot will happen by default.

Should EUTM registrations be re-filed in the UK?

There is no need to re-apply for these marks in the UK. The Regulations provide that all EUTMs registered as at 29 March 2019 will automatically be protected as "comparable" UK trade mark registrations, without any loss of priority, filing or seniority dates and for free. There is provision for EUTM owners not wishing to have UK protection to opt-out, but not where the mark has been used in the UK, is subject to an interest or proceedings have been commenced under it. We do not know whether the comparable UKTM will retain their EUTM numbers, perhaps with an added prefix, or if they will be allocated entirely new numbers. The latter will create additional administration and resource that will need planning for, both by the UKIPO and for those owning and managing portfolios that include the new comparable UKTMs.

Should pending EUTM applications be re-filed in the UK?

Under the Regulations, applicants with EUTMs pending on 29 March 2019 will be given a period of 9 months in which to apply for the same mark in the UK without any loss of priority, filing and seniority dates. So 29 December 2019 will be a key date to note. It is thought that normal UK application fees will apply. All pending EUTMs (even those that have been accepted for registration but not yet registered) will have to be re-filed in the UK if UK protection is required. This means that the application will be re-examined by the UKIPO and any objections or oppositions will have to be dealt with again before the UKIPO, irrespective of their outcome before the EUIPO. Generally, there is no benefit in re-filing pending EUTMs in the UK now. This is particularly so for EUTMs that were filed more than 6 months ago, from which normal priority can no longer be claimed. The Regulations provide this new priority period irrespective of how long the EUTM has been pending, so it can, for example, revive priority for EUTMs that may have been the subject of one or more long-running oppositions or of EUIPO objections under appeal. It is worth re-filing now if UK protection is required as soon as possible (perhaps for licensing or enforcement purposes) and any loss of priority/filing date does not matter. Since the UKIPO will be busy handling many re-filings after Brexit, examination might be a little slower then, which could again justify re-applying now.

Should pending EUTM applications be prosecuted differently?

If your EUTM has not already been advertised for the 3 month opposition period, it is too late to try to rush it through to registration before 29 March 2019. However, if the opposition period has closed or will do so shortly and oppositions have been filed, there may be merit in trying to rush the application through to registration within the next 50 days, albeit without making undue compromises. In that event, the UK comparable right will be created without having to re-file the application and perhaps face more objections and oppositions before the UKIPO. However, if the UK does not leave the EU on 29 March 2019 the rush will then have been unnecessary. Bear in mind that, post-Brexit, absolute grounds of objection against pending EUTMs where those grounds only relate to the UK might be disregarded by the EUIPO after 29 March 2019. This is unclear but possible. This might weigh in favour of trying to slow down the prosecution of any pending EUTM applications for which there are absolute grounds for refusal pertaining to the UK only.

Should new applications be filed at UK as well as EU level from now?

Any EUTMs filed from now onwards will not register before 29 March 2019 even if they are filed on the "fast track". This means that a separate UK application will be required at some point anyway if protection is wanted in the UK. Filing now will secure that protection earlier but those application costs might be wasted if a Deal Brexit is then agreed at the last moment. This is because an EUTM filed now would then probably be registered before the end of any extension or transition period and so will, on Brexit, be split out into a comparable UKTM registration for free. After 29 March 2019, separate applications will be required at UK and EU level.

Will trade mark owners need a correspondence address in the (i) UK for UK marks and (ii) EEA (excluding the UK) for EUTMs?

• UKTMs - the Regulations do not change the current rules which require an address for service within the EEA. The UK government has said that it will not change the current rules in the immediate term. So the comparable UKTMs can keep the same address as on the EUTMs at the time of Brexit. However, the UK government has indicated that this may change in the medium term. A UK-based firm would also be sensible as attorney on record for such rights in the event that positive acts of representation are required.
• EUTMs- representation within the EEA is necessary to handle all but the most straightforward of matters before the EUIPO (filing applications and renewals). Those with in-house UK teams used to handling EUTM matters may have to consider appointing EEA-based representatives after 29 March 2019. With its network of leading IP teams in 10 EU Member States other than the UK, Taylor Wessing has all the contingency plans in place to continue handling the full range of actions and disputes before the EUIPO without client service disruption.

Should EUTMs be refiled at EU level if they have been used only in the UK up to exit?

The EU has said that use of an EUTM in the UK before 29 March 2019 is likely to count as use of the EUTM going forwards if it is within the relevant 5 year period. If that is the case, then presumably an EUTM would not be revoked for non-use unless and until 5 years after last genuine use in the UK. However, it has also said that only a decision of the CJEU will ultimately decide this issue. Therefore, when assessing whether to refile any EUTMs, bear in mind the slight risk that pre-Brexit use of an EUTM in the UK might not count. For a belt and braces approach, key EUTMs that are or are approaching 5 years old and which have only been used in the UK could be re-filed. Bear in mind the age of the EUTM, use plans and the risk of conflicting applications being filed in the EU when determining whether/when to re-file.

Should EUTMs be refiled in the UK if they have been used only in the EU (excluding the UK) up to exit?

The Regulation provides that use of an EUTM in the EU before 29 March 2019 will count towards use of the comparable UK registration if it is within the relevant 5 year period. This means that a comparable UK registration cannot be revoked for non-use until at least 5 years after it was last put to genuine use in the EU. Accordingly, there is no additional need to re-file marks in the UK; usual considerations apply when determining whether to re-file for reasons of non-use.

What if marks currently registered or used in the UK only are regularly relied on to block third-party EUTM applications?

Generally, file those marks as EUTMs or as separate national rights elsewhere in the EU now (depending on use plans) since UK marks will no longer be valid rights for opposition or invalidity proceedings after 29 March 2019. You might wish to delay the EUTM / other filing if the mark has and will not been used in the EU (excluding the UK) within the next 5 or so years so that the non-use period does not start to run (subject to the risk of conflicting third party applications being filed in the interim).

What will happen to International trade mark registrations designating the EU?

The UK government has said that it is working with WIPO to determine whether the holders of international marks designating the EU can continue to have protection for the comparable UK right under the International system. Those negotiations are on-going. Meanwhile, the Regulation deals with international marks designating the EU in the same way as normal EUTMs (as described in points 2 and 3 above).

Will UK persons still be able to file International marks based on EUTMs?

To file an IR based on an EUTM, the applicant must have a real and effective place of business in the EU. IRs should be filed before 29 March 2019 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). 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).

What else should be considered?

Generally do not to let UK registrations lapse even if duplicated by EUTMs. Consider carefully any new seniority claims for UK registrations. Review trade mark strategies and watches for adequacy. Be alive to the possibility of fraudsters sending out scam invoices from 2019 onwards and third parties filing bogus UK applications during and particularly just after the end of the 9 month priority period. We anticipate the UKIPO will be dealing with many oppositions based on bad faith grounds shortly after 29 December 2019. Consider whether 2019/20 budgets need increasing to account for additional UK (and possibly EUTM) applications and likely increase in watch notices and disputes. Note that renewal dates for comparable UKTMs will remain the same as for the corresponding EUTMs.

What happens to licences of EUTMs?

Under the Regulations, a licence that before Brexit covered the whole EU will, unless there is an agreement between the parties to the contrary, continue to cover the UK. That amounts to a licence under the new comparable UKTM. That licence is a registrable transaction and should be recorded at the UKIPO. There will be no automatic transfer of licence recordal data from the EUIPO register to the UKIPO register so this obligation to record this licence applies irrespective of whether the licence had been recorded at the EUIPO. However, if it had been recorded at the EUIPO, there is an extended period (18 months) within which to record the licence at the UKIPO.