Brexit and IP: an update

The EU has agreed a further extension to 31 January 2020 with the option for the UK to leave earlier if the Prime Minister can secure support for the withdrawal deal. Does this mean a no-deal Brexit is now off the table?

Prime Minister Boris Johnson accepted the EU's offer of a Brexit extension to 31 January 2020, thereby avoiding a cliff-edge hard Brexit on 31 October 2019. The delay is flexible in the sense that the UK may leave at an earlier date, if the UK parliament chooses to accept the withdrawal deal (although this seems unlikely, at least at the moment as there is no majority for the ‘deal’ in Parliament).

While it now seems clear that both the UK and EU are keen to avoid a no-deal exit, IP owners are nonetheless advised to continue to prepare their IP for Brexit based on the information currently available, and the processes and procedures that have already been put in place, which we have summarised below. You can also download a handy checklist of IP actions to take post pre- and post-Brexit here.

Brexit and your IP

The good news for IP owners when it comes to Brexit planning is that the UK government has already put in place statutory instruments to ensure that the property rights in all existing registered EU trademarks (EUTMs) and registered European Community designs (RCDs) will continue to be protected and to be enforceable in the UK on the day of exit, whether in the form of a deal or no deal. This will be done by providing for an equivalent UK registered trademark or registered design.

Rights holders with existing EUTM or RCD registrations will have a new UK equivalent right granted automatically and that will come into force at the time of the UK’s exit from the EU. The UKIPO has published guidance on how it plans to manage the numbering of such registrations, including how they will be distinguished from existing UK rights.

As we have written previously, the new UK trademark or design right will be entered automatically into the UK Register. There will be no UK government fee to pay or opt-in procedure to follow. The new UK trademark or design will effectively be a ‘clone’ of the parent EUTM or RCD with exactly the same details, such as filing and registration dates of the parent EUTM or RCD, and will be treated as if it had been applied for and registered under UK law which means that it:

• will be subject to renewal in the UK;
• can form the basis for proceedings before the UK Courts and the UKIPO’s Tribunal; and
• can be assigned and licensed independently from the EU right.

Actions for brand owners

While the above process will happen automatically on the date of Brexit, there are some actions that brand owners will need to take pre-Brexit, including:

• Pending applications

Where an EUTM or RCD is still in its application stage, that is to say it is not registered only pending registration on exit day, it will NOT be cloned automatically on to the the corresponding UK Register. Instead, the EU applicant will have nine months from exit day (including in a no-deal scenario) to instruct the filing of a new UK trademark or design application equivalent to the parent EUTM or RCD application using the same details as the parent. This will be the only mechanism by which EU applicants will be entitled to claim the same filing date as the filing date of the parent EUTM or RCD application, but it will involve payment of fees to the UK Registry in accordance with the UK trademark or design application fee structure. Any clients of ours with EU applications, which are still pending on exit date will be automatically contacted and asked wish to file an equivalent application in the UK and will be provided with costs, a deadline for filing and additional advice. As we understand it, the registries are not planning to notify applicants of the need to refile.

• Ongoing proceedings

Any ongoing opposition and invalidity proceedings may be impacted if they are based solely on a UK right, as it may not be a valid right on Brexit (especially in the event of a no deal). We will be contacting clients who may be impacted with our recommended next steps.

• International rights

The same provisions set out for EUTMs will apply to International Trade Mark and international Design registrations designating the EU. In the event of a ‘no deal’, however, the comparable right will be a UK registration and not a UK designation. This will have some impact on record management.

• Renewals

Brand owners are also advised to review EUTM and RCD portfolios to consider whether they wish to retain (or renew) the cloned right in both jurisdictions, as each will be charged separately, and there may be an impact on any co-existence agreements in place. Assuming the cloning takes place as per the UK’s published plans, there will also be an ‘opt out’ clause in this automatic cloning. The UKIPO has also announced that it intends to waive any late fees for the first six months to give brand owners time to make the necessary decisions. It’s also important to note that you can’t avoid paying the UK renewal fee by paying before Brexit for any EU renewal that is due after it: The new ‘cloned’ UK registration will still need to renewed although we understand that the UKIPO’s six months grace for the renewal will also apply.

• Proof of use

Rights holders are also recommended to review EUTMs and RCDs to assess if use is only in the EU27 and not in the UK. If so, expansion of use should be considered in the future since the cloned UK registration may become vulnerable to cancellation actions for non-use.

• Unregistered design rights

The UK is planning to create a new right, called the Supplementary Unregistered Design Right, to ensure that all Unregistered Community Design Rights (UCDR) that exist on Brexit continue to be protected and enforceable in the UK for their remaining lifetime. We recommend pulling a list together of any unregistered design rights affected in case further action is necessary.

• Exhaustion of rights

Rights exhausted in the UK and EU before Brexit day will remain exhausted in both territories. In the event of a ‘no deal’, the UK has said it will recognise exhaustion of goods marketed in the EEA, but the EU has yet to agree to recognise exhaustion of rights in the UK.

• Coexistence agreements, licences and other IP agreements

Agreements that cover the EU should cover the cloned UK rights unless there is evidence that such documents were not intended to have effect in the UK. For this reason, we recommend ensuring that the territory clause in agreements for all ongoing matters which include the EU also includes the UK separately.

• Security interests

Brand owners should also check whether any licences or security interests have been recorded against a EUTM registration, as these may also need to be recorded against the cloned UK trademark.

• .eu domains

As things stand, UK businesses will no longer be eligible to register or renew .eu domain names as of 11pm UTC on Brexit day, and will not be able to draw upon their UK trademark rights to act against infringing or bad faith registrations of .eu domains from that date. Click here for further information and advice.

You can download a handy checklist of IP actions to take post pre- and post-Brexit below.

Should you double file?

The latest guidance from CITMA and CIPA suggests brand owners should only consider double filing national applications in the UK and EU, if registration of the trademark or design will not be completed by the date of Britain's exit. For international registrations, it is recommended to start adding UK designations now. Post-Brexit, double registrations will be required to ensure that brand owners benefit from protection in both the EU and UK.

Get auditing

If you haven't already done so, undertaking an audit of your IP rights will be key to getting your portfolio ready for Brexit in whatever form it occurs. As a first step, we recommend the following actions:

1. 1. Collate a list of EU and IR rights that will be impacted, as well as pending EU applications or ongoing oppositions.
2. 2. Identify EU rights that overlap with existing UK registrations (as it will be possible to 'opt out' of their cloning).
3. 3. Review EU/UK use in line with your existing registered portfolio.
4. 4. Check coexistence agreements, licenses and other IP agreements.
5. 5. Review unregistered designs in light of UK plans to introduce a new Supplementary Unregistered Design Right.
6. 6. Generate a list of renewal due dates, including rights that will require a second UK renewal payment post-Brexit.
7. 7. Identify any rights or classes that are no longer relevant, to potentially save cost and streamline the portfolio.
8. 8. Take legal advice on any points of concern.

Impact on representation

It is likely that UK representatives will lose their rights to representation on Brexit day. CITMA and CIPA have both warned that this may result in an influx of scam letters to UK rights holders, especially given that current rules suggest there will be a two-month deadline in which representative addresses for service will need to be updated to ones in the EEA.

Please be assured that Novagraaf will be able to continue to act for you during and following the process of exit from the EU. We are a Europe-wide firm with offices across Europe as well as in the UK.

What about patents?

There will be no change to the current way in which European patents (EPs) can be obtained, maintained or litigated in the UK. The Brexit vote does not mean the UK ceases to be a member state of the European Patent Convention (EPC) that established the European Patent (EP) system. Even after Brexit, therefore, companies will be able to file an EP application designating the UK.

There are, however, some implications for supplementary protection certificates (SPCs). Please get in touch below if you require further information or support. Similarly, news last month that the German Federal Constitutional Court intends to hear the constitutional complaint against the Unified Patent Court legislation this year has again raised the question of when (if at all) the Unitary Patent will come into being, and if so what the UK’s involvement would be (if any). We continue to monitor progress and will keep you updated when we know more.

Get the latest guidance from our team of IP specialists by subscribing to our IP newsletter, Perspectives. For more tips and advice on auditing, please download our white paper 'Best practices in trademark auditing: A practical guide'.