Brexit & Your Trade Marks – What To Expect

Last updated: 20 February 2017

Estimated reading time: 8 minutes

Many of our clients with registered trade marks are eager to find out what potential scenarios could exist, and what action they’ll need to take, after the UK leaves the EU.

Here we’ll be covering:

  1. When will there be a change to the current situation for trade marks after Brexit?
  2. What will happen to your trade mark after UK withdrawal from the EU?
  3. What are the potential scenarios that exist with European trade mark registrations after Brexit and what are the potential implications of each?
  4. Which scenario would be the best and is likely to be adopted?
  5. After Brexit, what will happen to existing EUTM licences where the licensed territory is defined as ‘the EU’ – will the UK be a part of this?

When will there be a change to the current situation for trade marks after Brexit?

After the UK notified its intention to withdraw from the EU pursuant to Article 50 of the Treaty on the European Union on 29 March 2018, the UK will officially withdraw from the EU on midnight of 30 March 2019 (unless a ratified withdrawal agreement establishes another date).  This means that all EU law will no longer apply to the UK from midnight of 30 March 2019 onwards, including EU laws pertaining to trade marks.

What will happen to your trade mark after UK withdrawal from the EU?

This will depend on what type of trade mark you have and where it is registered:

Type/location of registered trade mark How existing trade mark(s) will be affected

 

 

How will UK trade mark law be affected How will UK courts be affected
UK national trade mark registrations
(made to the UK Intellectual Property Office (UKIPO) and not an EU institution)
Unaffected Although domestic trade mark law is likely to incorporate the EU Trade Marks Directive upon Brexit, little change is likely insofar as it relates to UK national trade marks. Although UK courts will no longer be bound by the EU Court of Justice’s rulings, it is unlikely that UK courts will deviate from these rulings if they relate to identical provisions of trade mark law.
European Union Trade Marks (EUTMs) 
(made to the EU Intellectual Property Office)
Technically EUTMs will lose protection and cease to have effect in the UK although this is unlikely (the EU’s statement on IP rights states that holders of IP rights should not suffer any loss of protection upon Brexit).

 

There are a number of potential scenarios that exist, see below

While the aim of the EU Withdrawal Bill is to incorporate EU law into UK law, applying this to EUTMs is not a workable scenario because EUTMs are EU-wide rights and the UK will no longer be part of the EU.

 

The general view held is that it would not be in the commercial interest to deprive EUTM holders of protection in the UK.

There are a number of potential scenarios that exist, see below

UK courts will no longer be competent to take actions effective in the EU or in respect of the validity of EUTMs.

 

Disputes regarding infringement and validity of EUTMs involving owners of EUTMs established in the UK will have to be settled by EU trade mark courts rather than UK courts.

Likewise UK courts will no longer be bound by the EU Court of Justice’s rulings, although it is unlikely that they will deviate from these rulings if they relate to identical provisions of trade mark law.

International Trade Mark Registrations (ITMRs)

 

An international trademark can be applied for in any country governed by the Madrid Protocol (which includes approximately 100 parties including the UK and the EU) registered initially in that country and then either:

(1) designating the UK as an additional country; or

(2) designating the EU as an additional country

Technically ITMR validity should be unaffected as ITMRs are governed by the Madrid Protocol which has multi-national influence.

 

However, in reality an ITMR owner that has designated the EU but not also designated the UK separately would need to extend the scope of its protection specifically to include the UK to maintain protection in the UK after Brexit.

ITMRs will still be available for UK businesses after Brexit but Brexit will determine whether an IMTR is designated to the UK, the EU or both. Following Brexit, it would be prudent for applicants of new IMTRs to designate both the UK and the EU. It is currently unclear whether UK courts will enforce IMTRs registered in the EU but not the UK.

What are the potential scenarios that exist with European trade mark registrations after Brexit and what are the potential implications of each?

The Chartered Institute of Trademark Attorneys (CITMA) has considered some of the possible options, including the following:

Possible scenario Detail Strengths  Weaknesses
Conversion Scheme

 

Where an owner of an EUTM could convert it into a UK trade mark subject to UKIPOs examination

UK applications would retain the application date of the EUTM registration and be subject to examination by UKIPO.

 

Similar to current method for conversion of EUTMs into national applications but different in that the EUTM registration would continue to exist.

  • Could be adopted unilaterally by UK
  • Low post-Brexit conflicts

 

  • Low legal certainty
  • High initial cost to businesses
  • High level of work for UKIPO which would cause delay and could create uncertainty

 

Jersey Model

 

UK unilaterally deems EUTMs to have effect in the UK

The UKIPO and UK courts would treat EUTMs as having effect in the UK so that pre-Brexit EUTM registrations are deemed to cover the UK without the need for any other action.
  • Could be adopted unilaterally by UK
  • Low initial cost to businesses
  • Medium post-Brexit conflicts
  • Low level of work for UKIPO
  • Low legal certainty
  • Medium post-Brexit conflicts
Republic of Ireland Model 

 

Option to include EUTMs onto UK trade mark register as UK trade marks for specified time or upon renewal – meanwhile EUTM covers UK

EUTM owners would have an option to include a parallel UK trade mark registration for a specified period of time after Brexit or upon renewing the EUTM registration.
  • Could be adopted unilaterally by UK
  • Medium-low initial cost to businesses
  • Medium-low level of work for UKIPO
  • Medium post-Brexit conflicts
  • Medium legal certainty
  • Medium post-Brexit conflicts
  • Medium legal certainty
Montenegro Model 

 

All EUTMs automatically brought onto UK register as UK trade marks

All existing EUTMs would be automatically entered onto the UK trade mark register as UK trade mark registrations and maintain equivalent protection.
  • Could be adopted unilaterally by UK
  • High legal certainty
  • Medium-low initial cost to businesses
  • Medium-low level of work for UKIPO
  • Medium post-Brexit conflicts
  • Medium post-Brexit conflicts
Tuvalu Model 

 

Option to include EUTMs onto UK trade mark register as UK trade marks

Like Montenegro model but not automatically – only if EUTM owner makes a decision to extend the trade mark to the UK, probably by filing a form with a specific time frame.
  • Could be adopted unilaterally by UK
  • High legal certainty
  • Medium-low initial cost to businesses
  • Medium-low level of work for UKIPO
  • Medium post-Brexit conflicts
  • Medium-low initial cost to businesses
  • Medium-low level of work for UKIPO
  • Medium post-Brexit conflicts
UK plus 

 

EUTM becomes European Trade Mark system covering all EU countries plus UK (and possibly other non-EU countries)

EUTM system will no longer be restricted to the EU and will instead cover all EU countries plus the UK (and potentially other European countries like Norway, Switzerland and EU candidate countries).

 

All existing EUTM registrations would cover the UK and EU as well as other countries after Brexit.

  • High legal certainty
  • Low initial cost to businesses
  • Low level of work for UKIPO
  • Low post-Brexit conflicts
  • Could not be adopted unilaterally by UK and would require the agreement of the EU/EUIPO
Veto 

 

Like Tuvalu model but UKIPO retains right of veto

This scenario resembles the Tuvalu model but allows UKIPO the right to refuse to allow a EUTM registration onto the UK register.

 

Refusal would be likely to apply to trade marks previously been refused by the UKIPO but accepted by the EUIPO or marks which are otherwise not eligible for registration under UK trade mark law.

  • Could be adopted unilaterally by UK
  • Low post-Brexit conflicts
  • Medium-high initial cost to businesses
  • Medium-high level of work for UKIPO
  • Low legal certainty

These scenarios are not exhaustive: there are other options in addition to the above, as well as several possible versions of the above scenarios.

Which scenario would be the best and is likely to be adopted?

Each option has its own pros and cons. Whilst the ‘UK plus’ option has the most benefits, the fact that it would need the approval of the EU/EUIPO is a key strategic weakness.

The Chartered Institute of Trademark Attorneys (CITMA)  favours an outcome which minimises the cost and resource burden to businesses, while maximising legal certainty.

Although nothing has yet been decided, it is expected that the UK will make it possible to convert a EUTM into a UK trade mark or to create a parallel UK trade mark registration for existing EUTMs, both of which could be adopted unilaterally by the UK. There are several additional points that the government would need to decide, such as whether the chosen process should be automatic or voluntary and whether or not it should involve a fee.

Transitional provisions will also need to be passed focusing on whether EUTMs only used outside the UK will continue to be valid within the UK and vice versa. It is also expected that there will be transitional provisions addressing jurisdiction and enforcement in pending litigation cases over EUTMs, although it is presently unclear whether UK courts will be able to grant remedies in such cases.

To provide certainty, it would be prudent for EUTMs to file UK trade mark applications for their most important trade marks now. A UK trade mark application can take as little as four months if unopposed.  Our intellectual property and can assist with this.

After Brexit, what will happen to existing EUTM licences where the licensed territory is defined as ‘the EU’ – will the UK be a part of this?

Going forward it is important to be specific in referring to ‘the EU’ in any agreements and clarifying whether or not the UK is to be included.

Where no such wording is used, the answer is likely to depend on the factual background to the licence on a case-by-case basis.

Such analysis will involve considerations such as:

  • were there any national rights included in the licence alongside the EUTMs?
  • was the EU territory chosen because it is a single market?
  • are there legal/regulatory reasons why the licensee needs to be located in an EU member state?

As for existing licences, if all parties are in agreement, such licences should be amended to clarify whether or not the UK will remain part of the licensed territory after Brexit. It would also be wise to clarify the position regarding future EU joiners/leavers.

What next?

Our intellectual property solicitors also specialise in trade marks. Whether you are keen to review your IP strategy ahead of Brexit, or you simply need legal advice on applying for or managing your trade marks, we can help. Call us on 0800 689 1700, email us at enquiries@hjsolicitors.co.uk, or fill out our contact form below and we’ll get back to you within 24 hours.

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