Br*x*t and brands – out of the EU in 680 days
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| Don't even say the b-word ... |
What will happen to IP rights in a post-Brexit world? This is a question that has been daunting IP professionals for a few months now ... and to which no firm response has been provided yet.
The IPKat is delighted to host the musings of former guest Kat Darren Meale (recently promoted to partner at Simmons&Simmons) on this matter.
Here's what Darren writes:
"This one is about the UK leaving the EU. Having had enough of this millennium’s most reckless political decision, this occasional IPKat contributor cannot bring himself to say Br*x*it without an asterisk or two to cool his ire. In any event, have you thought about the implications for trade marks and designs, as well as the businesses that use them and the practitioners who make their living from them? Allow me to give you some food for thought (or perhaps a snack – this is by no means a comprehensive guide to the many issues).
Trade marks
In all likelihood, on 29 March 2019 (B-Day), well over a million EU trade mark registrations will cease to apply in the UK. This may be the largest removal of intellectual property rights in history. Here are nine things you should know.
1. Although we are in entirely new territory, there is a widespread confidence amongst the UK IP profession that the UK government and the UKIPO will create a dedicated process by which owners of EUTMs can secure continued protection for their marks in the UK. Two models appear the most likely. The first option is for all EUTMs to be automatically granted separate protection as UKTMs carrying the same benefits as their parent EUTMs (including filing and registration dates). CITMA calls this the Montenegro Model. The second is for owners to have the option to elect for this separate protection, most likely by filing a request at the UKIPO and paying a fee. CITMA calls this the Tuvalu model. CITMA has more on the options here. Something will need to be done about International Registrations designating the EU too.
2. Be careful calling the above process “conversion”, which is an option already available by which an EUTM can be given up and turned into applications for national marks in EU Member States. Perhaps “division” would better serve – EUTMs previously covering 28 countries should be (one way or another) divided into an EUTM covering 27 and a UKTM covering 1.
3. The bad news is that we do not expect to find out exactly what option will be chosen and how it will be executed until fairly late in the process. Civil service time within the UK government is in short supply at present, and that will only get worse as B-Day approaches. For that reason we do not expect to see a public consultation issued by the UK government. These commonly precede major, and not so major, changes in IP law in the UK (such as the new copyright exceptions introduced in 2014) and provide the IP community an opportunity to kick the tyres of proposal and point out all the flaws. Any flaws in the plan this time will have to be sorted out after the event.
4. EUTMs are subject to use requirements five years after they register. It would make sense that use in the UK prior to B-Day would count as use in the EU so far as proof of use is concerned, but not after it (but the former may be a question for the EUIPO and Court of Justice of the EU). Going forward, however, businesses which only really operate in the UK will not be able safely to maintain EUTMs beyond their initial five year registration period (after which the use requirement kicks in).
5. When an EUTM is filed, there is no need for the applicant to intend ever to use the mark for the goods and services claimed. In the UK, applicants must sign a declaration of intention to use. What of divided marks? Will owners have to declare they did intend to use in the UK, that they have used or that they will soon?
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| ... wishing a happy B-day ... |
7. Some of the biggest headaches are likely to involve EUTMs and EUTM applications pending before the EUIPO where opposition or cancellation procedures (which can take years at the EU level) are ongoing. If you are three years into litigation relying on passing-off and/or a UKTM, will your challenge suddenly fail? If an EUTM under challenge is divided to the UK, will you have to start proceedings afresh before the UKIPO? Will a UK High Court infringement action based on an EUTM need to be struck out? What will happen to pan-EU injunctions already in force, especially those ordered by a UK court? We’ll also see the death of the celebrated EUIPO/Alicante Torpedo.
8. UK IP professionals will be worried about their rights to represent before EU institutions, including the EUIPO and the EU General Court. EU IP professionals may have the same concerns about working in the UK. Trade mark attorneys look to be in a worse position than solicitors at present (for those unfamiliar with the UK system, these professions are quite distinct), because (as I understand it) re-qualifying to practice in a remaining EU Member State (which may be required) is harder for attorneys than solicitors (hello Law Society of Ireland!). There is also a place of business requirement, which is unlikely to trouble those of us working in practices which span Europe, but which will disadvantage UK-only firms. On the plus side, EU businesses are likely to need UK IP lawyers to help them with all of their new divisional UKTMs.
9. What do brand owners need to do now? Opinion is divided: file new UKTMs now? Wait for the division process? Pack it all in and emigrate to the moon? Talk to your colleagues, advisors or talk to me, as the answer most likely depends on your business, portfolio and your plans.
Designs
The story is very similar for the more than 700,000 Registered Community Designs (RCDs). Again CITMA has produced some very helpful material on the possible options, which closely mirror those for EUTMs. See here and here.
There will be both similar and different complications with RCDs, some of which no one may even have thought of yet.
Unregistered design rights will be impacted heavily. Unregistered Community Design right, which is very similar in protection to RCDs but is available without registration and lasts for three years, will no longer cover the UK. The UK still has its own UK unregistered design right, but it is quite different and does not protect, for example, surface decoration. The fashion industry is thought to be the biggest loser here, but we may see a new or updated UK designs law in due course to plug the gap (although I’m not confident we’d get it before B-Day). Unregistered Community Design right will continue to apply in the remainder of the EU, of course, but there are issues around disclosure of designs which are first disclosed to the public in the UK (at London Fashion Week for example).
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| ... thinking about B-day |
And there’s more
Exhaustion of rights has been mentioned above in the context of TMs but there will be a more general impact across IP. There are some lesser known IP rights which will be impacted – plant variety rights for example. Protected geographical indications (PGIs) and protected designations of origin (PDOs) may no longer be honoured in the UK (Parma ham from Paisley anyone? Champagne from Chatham?). You might need a new plan, too, if you operate from a .eu domain name. Copyright, as if it isn’t complicated enough, will also probably throw up some surprises, but at least we may be given a respite from reading any more Court of Justice decisions on communication to the public…
Never fear, we’re all still here
While the seismic political changes in the UK and the EU may create challenges and headaches, the UK has always been a leading jurisdiction for the practice of IP, including trade marks and designs. With so many dedicated UK IP lawyers in our community that is unlikely to change, and together we’ll solve any issues which arise. But you’d be best not to think that B-Day is years away – it's not – now’s the time to put a plan in place."
While the seismic political changes in the UK and the EU may create challenges and headaches, the UK has always been a leading jurisdiction for the practice of IP, including trade marks and designs. With so many dedicated UK IP lawyers in our community that is unlikely to change, and together we’ll solve any issues which arise. But you’d be best not to think that B-Day is years away – it's not – now’s the time to put a plan in place."
