Brexit and Brands: 536 days and counting – what is the UK going to do?

Darren Meale (Simmons & Simmons also recently named Young Innovator of the Year by the Financial Times), returns with another Brexit and Brands update [see previously here and here], this time with news of the UK’s position in the great Brexit battle.

Here’s what Darren writes:

“As previously reported here, the first meeting of the Financial Services Brexit and Brands Roundtable took place late last month, with Steve Rowan, Director Tribunals – Trade Marks and Designs of the UK Intellectual Property Office, attending to outline the hard work the Office is undertaking to get the UK’s IP assets ready for action when B-Day arrives just 536 days from now. Here are the big points – both on what has happened since the Brexit vote, and what might be happening next.

More UK trade marks – up 21% this year

1.     There has been a significant uptick in UK trade mark filings last financial year – 21% more, equating to about another 10,000 applications on the 2015/16 figure.

2.     There is a much larger spike in the number of applications for registered UK designs – these are up 125%.

3.     The demographic of filers has shifted slightly – there are now more international applications, and more applicants are represented than before (perhaps the two go hand in hand). Applications from the US and China have doubled.

4.     There are signs of “double banking” – applicants applying for UK and EU trade marks at the same time (in my view, this must be as a Brexit-protection strategy), although not everyone is doing this.

5.     The UKIPO is still working hard to process the increased numbers, and continues to hit its KPIs.

6.     The opposition rate for applications remains stable at 4%, however more applications means overall more oppositions, and increased pressure on resources. The office has recruited extra staff to deal with the increase in workload.

All options on the table for what happens on B-Day – including automatic “cloning” of EUTMs/RCDs and other unitary rights

7.     The UK government has not taken any official position on how it wants to deal with IP rights, notwithstanding that the EU has done so. Although IP is in some sense “technical”, it is rolled up with the other Brexit issues which are being negotiated, so there is no timetable for the UK government telling us either its primary or fall back positions (one surmises the rationale is not to give too much away).

*Many* options on Greg's table

8.     The UKIPO is planning to be ready for all possibilities, and is working out how its IT systems will have to change depending on each possible outcome.

9.     One option is to negotiate to stay part of the EU IP machine, with no change to present arrangements.

10.  The Tuvalu and Montenegro options remain contenders, as outlined in my first Brexit blogpost here. In essence these options involve – to use the UKIPO’s preferred term – “cloning” of EU unitary rights into UK equivalents (I have previously referred to this process as “division” – don’t call it conversion, as that is something else). Tuvalu sees cloning on request, Montenegro clones everything on Brexit day whether the trade mark owners like it or not. This will see something like a million EUTMs cloned to the UK register and 700,000 or so RCDs, if this option is implemented.

11.  The UKIPO is and continues to be very keen to consult informally, so if you have views, put them forward – it is not clear at this stage whether there will be a formal consultation.  One might think that Tuvalu raises some issues, such as deprivation of rights if no opt-in (which may have human rights impacts), the cost of opt-in and the burden of administrating the process. It might be said that Montenegro will lead to cluttering of the UK register, although to the extent that becomes the case, this should gradually solve itself as cloned marks come up for renewal.

12.  Cloned rights present obvious challenges, which the UKIPO's discussions with user groups seem to be exploring in some depth. These include: non-use issues, what to do about pending applications and ongoing oppositions, should the EUIPO decision on an EUTM application be honoured in respect of a cloned UKTM, or a separate decision reached, how to deal with seniority/priority claims, how to deal with EUTMs with non-English specifications, how to communicate with a million EUTM owners who suddenly have UKTMs too. And so on. 

13.  On the subject of exhaustion – the issue is being discussed with user groups.

14.  The UKIPO does understand that IP owners want certainty, and that they want to plan for changes.

15.  On geographical indications, this is a Defra lead.

So: plenty to think about. One of the biggest frustrations of Brexit in almost all areas is that, whether you think leaving the EU is a good idea or an absolutely crackers one, we don't know what Brexit actually looks like. And while we still have a while to go, business needs to plan ahead. Not just the brands and IP owners we act for – big or small – but us solicitors and trade mark attorneys too. Never mind the UKIPO's IT systems, could your trade mark management database handle the sudden cloning of your entire EUTM and RCD portfolio? How will it be done? Who will pay for it? 

Leaving you with those thoughts, I say thank you UKIPO for your attention to the detail here. To the politicians: please get on and tell us what you want our IP system to look like!

The Brexit and Brands Roundtable still has room for more brand owners to get involved –  drop me a line if you'd like to know more.”