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Brexit and IP Rights at the end of the Transition Period

Posted on 11 June 2020

This article was last updated on 26 June 2020.

Following the Withdrawal Agreement entered into between the UK and EU, and the steps taken by the UK Government and UK Intellectual Property Office (UKIPO), rights holders have been reassured that their IP rights will continue to be protected in the UK after the end of the transition period. IP rights will also feature in the ongoing discussions over a free trade agreement between the UK and EU. These developments should therefore be watched closely, but there are a number of issues that rights holders should be considering now to ensure that their IP portfolios are properly protected across both the EU and the UK once the transition period comes to an end.  

As a general step, rights owners should review their IP portfolios and related agreements to be in an optimum position at the end of the transition period. For example, they should consider the need for an increased budget due to newly created UK rights leading to separate renewals, potentially more disputes, and also increased levels of records management. 

As part of our Brexit preparations, we have set up Mishcon de Reya IP B.V., a trade mark practice based in The Netherlands. Mishcon de Reya IP B.V. is a wholly owned subsidiary of Mishcon de Reya LLP and will allow us to ensure continued representation in relation to EU Trade Mark (EUTM) and Design matters before the EU Intellectual Property Office (EUIPO). 

Trade Marks and Designs

The key steps for brand owners in relation to existing and pending EUTMs and Designs are as follows:

Existing registered EUTMs and EU Designs – no need to file UK applications

At the end of the transition period, a new comparable UK trade mark or design registration will be created automatically based on the EU right, and without charge. The new registration will retain the same filing (priority) date and renewal date as the EUTM/Design.  There is therefore no need to re-file existing EUTM/Design registrations in the UK. 

Rights owners should note the following in relation to these newly created UK rights:

  • Registration certificates will not be issued, but details will be available on the UKIPO website. Newly created UK trade marks will have the same registration number as the relevant EUTM with the prefix UK009 added to the last eight digits. Newly created UK designs will have the same registration number as the relevant EU Design, prefixed with the digit 9.
  • It will be possible, after the transition period, to opt out of having a cloned UK right, unless certain conditions apply.
  • The new UK right will be renewable separately from the EU right.
  • Any licences or security interests that refer to an existing EUTM or EU Design will, subject to contrary wording in the agreement, apply to the newly created UK right. Whilst it is not necessary to record such transactions at the UKIPO against the newly created UK right, there are advantages in doing so. There will be a 12-month period after the end of the transition period in which to do so. You should notify any licensees of the new right and check that creation of the new right does not put you in breach of any agreement.
  • Check that any assignments of existing EUTMs/EU Designs have been recorded at the EUIPO, so that the UKIPO can identify the correct owner of the newly created UK right.
  • Where an existing EUTM has only been used in the UK, consider what use can be made of the mark in the EU.  After the end of the transition period, use of an EUTM in the UK (including for export purposes) will not qualify as use in the EU for the purposes of maintaining the EUTM.  However, use of an EUTM in the UK (including for export purposes) before the end of the transition period will constitute use in the EU provided that it relates to the relevant period for which the use has to be shown.
  • The newly created UK mark will not be liable to revocation on the grounds that the corresponding EUTM has not been put into genuine use in the UK before the end of the transition period. Use of the EUTM in the EU (whether inside or outside the UK) before the end of the transition period will count as use of the newly created UK trade mark, if it was during the relevant period.
  • When assessing the reputation of a newly created UK mark, it will be possible to take into account reputation acquired in the EUTM in the EU before the end of the transition period.  After the transition period, reputation of the new UK mark will only be based on use of the mark in the UK.

Pending applications for EUTMs and EU Designs – no need to re-file before the end of the transition period

Pending EUTM applications

An application for an EUTM that is currently pending at the EUIPO may well not register before the end of the transition period, but there is no need to re-file the application in the UK at this stage. 

After the end of the transition period, there will be a nine month window in which to file a UK application, retaining the priority date of the EU application. A separate application fee will be payable and the UKIPO will not notify applicants of this deadline. 

On a case-by-case basis, it may be advisable to file in the UK before the end of the transition period, if protection in the UK is needed as soon as possible. However, this would mean losing the priority application date of the EUTM application. If there is an extension to the transition period, there may also be wasted filing costs.  

Where an EUTM registration or application has been refused or withdrawn, it may be converted into a national right in certain circumstances, provided an application is made to request conversion within a three month period. You should seek advice if you consider conversion will be required.

Pending EU Designs applications

There also will be a nine month priority window after the end of the transition period for applicants to file a corresponding application at the UKIPO for a UK registered design. 

Where publication of an EU Design has been deferred, this will be treated as a pending application. Accordingly, an application will need to be made to the UKIPO within the nine month priority window after the end of the transition period. It will then be possible to defer publication of the UK registered design for up to 12 months, provided the overall deferment period does not extend beyond the total of 30 months.

New applications for EUTMs and EU Designs – consider dual filings

If you are currently considering a new EUTM application to be made before the end of the transition period, you should consider filing a UK application alongside it (after that date, dual filings will be necessary). This is a decision to make on a case by case basis.

When conducting clearance searches after the end of the transition period, you should take into account that an application may be made in the nine month window relying upon the priority date of an earlier EUTM application.

As EU Designs can reach registration very quickly at the EUIPO, dual filing for designs is only recommended, if it is being considered, as we approach the end of the transition period.

International trade mark and design registrations and applications designating the EU

There is also no need to re-file existing International Registrations designating the EU in the UK as new applications, as such rights will be preserved in the UK after the end of the transition period.  The UKIPO has recently confirmed that these will be comparable UK rights.

Unregistered design protection

Existing Unregistered Community Designs (UCDs) will remain protected in the UK for the remainder of their term of protection (up to three years) after the end of the transition period. A new UK unregistered design right called the 'supplementary unregistered design right' will also be created which will mirror the characteristics of the UCD.

However, due to uncertainties over the rules of first disclosure for both UCD and the new 'supplementary unregistered design right', designers should consider filing for registered design protection or making a simultaneous disclosure in the UK and EU. The UK Government has raised the issue of reciprocity in relation to first disclosure of designs during the discussions over a free trade agreement.

IP agreements

New agreements should clearly set out what is intended in relation to the definition of the territory of the agreement, and the IP rights that are covered. Review existing agreements to ensure that they reflect the desired position (there may be an opportunity to renegotiate certain aspects).

Any existing agreements that relate to EUTMs or EU Designs will apply, subject to contrary wording in the agreement, to newly created UK registrations at the end of the transition period. Check that ownership of a UK right does not put you in breach of any contractual commitments, and also whether you need to notify any contracting party of the newly created right. As noted above, consider whether to record relevant transactions at the UKIPO against newly created UK rights.

Existing and pending disputes at the EUIPO/UKIPO/UK Courts

Review any existing or pending disputes before the EUIPO (such as opposition or invalidity proceedings), particularly where these are based on UK rights (as it will no longer be possible after the end of the transition period to rely upon those UK rights or, e.g., a reputation in the UK).

There is likely to be an increased level of disputes at the UKIPO following the end of the transition period. However, where an EUTM or Design is being challenged at the EUIPO through a cancellation action which is ongoing at the end of the transition period, and that EU right is later declared invalid at the EUIPO, this outcome will also apply to the new UK right created (unless the grounds for the invalidity or revocation do not apply in the UK). Opposition actions will also need to be considered in relation to new UK applications filed during the priority window. 

For existing disputes before the UKIPO that are based on earlier EU rights, the Government has confirmed that these will continue until completion of the proceedings on the basis of the existing law, presumably on the basis of the newly created UK right. 

You should also review any existing or pending disputes before the UK courts relating to EU rights. After the end of the transition period, any remedies granted by the UK courts in such proceedings will only apply to the UK comparable right, and it will no longer be possible to obtain pan-EU relief in the UK court.

Where a UK court has made a referral to the European Court of Justice (CJEU) for interpretation of a point of EU law before the end of the transition period, the CJEU will provide answers to the questions referred, even if the case is heard by the CJEU after the transition period. 

Parallel imports and exhaustion of IP rights

Parallel imports are genuine products put on the market in one country by the trade mark owner, but then exported to another country without its permission. Currently, when the trade mark owner puts the goods on the market anywhere in the EEA, it loses the ability to object (other than in exceptional circumstances) to them being exported to any other EEA country – its IP rights are said to be "exhausted".

As a 'temporary fix', the UK Government had said that it will maintain this regional exhaustion regime, thereby allowing continuity of supply of parallel imports into the UK from the EEA, but further clarification is awaited from the Government on this. Further, even where EEA-exhaustion is maintained in the UK, there is no suggestion of any reciprocity, i.e., businesses wishing to export to the EEA goods first put on the market in the UK may need the rights holder's consent to do so.

Counterfeiting and Customs

If a rights holder has filed an EU-wide Application for Action (AFA) through the UK Border Force, this will cease to have effect outside the UK after the end of the transition period. It will be necessary to file a separate EU AFA through an EU27 Customs authority.

If a rights holder has filed an EU-wide AFA via one of the EU27 Customs Authorities covering the UK, this will cease to have effect in the UK after the end of the transition period, but will remain valid in the EU Member States designated. A separate application will need to be filed with UK Border Force.

.eu domain names

After the end of the transition period, businesses established in the UK and non-EU citizens residing in the UK, will no longer be able to register .eu domain names or, if they already own a .eu domain name, to renew it.  Details of the process that owners (with a Great Britain or Gibraltar residence country code) of existing .eu domain names should follow are published on the EURid website (this should be reviewed regularly for updates). In particular, registrants will have until the end of the transition period to demonstrate compliance with the .eu requirements, failing which the domain will be marked as withdrawn (in which case, it can no longer be used for websites or email). Further, 12 months after the transition period ends, all withdrawn domains will be revoked and available for general registration.

You should take relevant action in relation to such .eu domain names as soon as possible, and in accordance with the stipulated timetable.

Alternative domains may need to be considered if, for example, it is not possible to put the registration into the ownership of an eligible entity.

Other IP rights

This guidance note does not deal in detail with other rights but as a brief overview:

Patents

The existing system for protecting and enforcing patents will remain unchanged, as it is based on the UK's membership of the European Patent Convention, i.e., separate from the EU. The UK will introduce its own mechanism in respect of Supplementary Protection Certificates (SPCs). One important aspect is that the term of any new UK SPC will be calculated based on the earlier date of an EU or UK marketing authorisation. However, it now appears likely that the UK will not be able to participate in the Unified Patent Court and Unitary Patent regime (should that regime come into force).

Copyright

Copyright law will remain largely unchanged immediately post-Brexit, though there will be changes in relation to aspects of cross-border protection and enforcement of copyright, for example, in relation to portability of content and broadcasting. There may, over time, be divergence.  EU Member States have until 7 June 2021 to implement the controversial Directive on Copyright in the Digital Single Market but the UK has said it does not intend to do so, given that this date falls after the end of the transition period.

Database rights

Database rights created before the end of the transition period will continue to be protected for the remainder of their duration. However, new database rights will be limited, in the UK, to UK citizens, residents and businesses; and new database rights in the EU will not be available to UK citizens, residents and businesses.

Geographical indications

The UK will set up its own geographical indication (GI) schemes for food, drink and agricultural products; spirits; wine; and aromatised wine, with new UK GI logos for those products protected under the UK schemes. Existing UK products registered under EU GI schemes at the end of the transition period will remain protected in the UK under the UK GI schemes. For those products, producers will have until 21 January 2024 to display the new UK GI logo on their packaging.  Where the products are protected in the EU, producers can continue to use the EU logo in the UK after the transition period. UK GIs registered under the EU GI schemes by the end of the transition period will continue to receive protection in the EU, but all new UK products will need to obtain UK GI protection first before securing EU GI protection. There may be further developments in relation to GI protection as part of discussions relating to free trade arrangements, both with the EU, and with other countries like the USA. 

 

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