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Brexit and IP rights: No Deal planning update

Posted on 09 October 2019

This article has been updated to reflect the fact that the current deadline for a No Deal Brexit is 31 January 2020.

The government and UK Intellectual Property Office (UKIPO) have taken a number of steps to reassure rights owners that their rights will continue to be protected in the UK post-Exit Day in a No Deal scenario. Many rights owners have already been planning for a No Deal Brexit, but there are a number of steps that can now be considered. Should a withdrawal agreement be negotiated, we will issue fresh guidance.

As a general step, rights owners should review their IP portfolios and related agreements to be in an optimum position on Exit Day. For example, 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 and to address the potential outcome of a No Deal Brexit, 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 government has summarised the changes to trade mark law and practice in the event of a No Deal, and in a separate guidance note relating to designs and International Registrations. 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

On Exit Day, a new comparable UK trade mark or design registration will be created automatically from the EU right, and without charge. The new registration will retain the same filing (priority) date and renewal date as the EUTM/Design. 

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 Exit Day to opt out of having a cloned UK right, unless certain conditions apply. There may be an official fee for opting out so, unless it is necessary to opt out, you may prefer to allow the newly created UK right to lapse on renewal, or to surrender it.  
  • 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 Exit Day 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 on Exit Day. 
  • Where an existing EUTM has only been used in the UK, consider what use can be made of the mark in the EU, and whether to re-file. Whilst the EUIPO has suggested that use in the UK before Exit Day can continue to qualify as use of the EUTM after Exit Day, it has also said that this will ultimately be a matter for the European Court of Justice.
  • Where an existing EUTM has only been used in the EU27 and not in the UK, the UK government has confirmed that use in the EU (including the UK) before Exit Day will count as use of the newly created UK trade mark, provided it is in the relevant five year period. 

Pending applications for EUTMs and EU Designs – no need to re-file before Exit Day

Pending EUTM applications

An application for an EUTM that is currently pending at the EUIPO may well not register before 31 January 2020, but there is no need to re-file the application in the UK at this stage. 

After Exit Day, 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 Exit Day, 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 further delay in the Brexit process, 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 Exit Day 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 on Exit Day.  Accordingly, an application will need to be made to the UKIPO within the nine month priority window after Exit Day. 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 a possible Exit Day on 31 January 2020, you should consider filing a UK application alongside it (after Exit Day, dual filings will be necessary).

When conducting clearance searches post-Exit Day, 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 Exit Day deadline.

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 after Exit Day, though such rights will be preserved in the UK as a national registration rather than a UK designation.  It will be possible to replace the newly created UK registration by the corresponding international registration, provided you subsequently designate the UK after Exit Day (it will be advisable to ask the UKIPO to take note of the replacement in the UK register).

If you hold a pending EU designation on Exit Day, there will be a nine month period after Exit Day to apply to register a UK trade mark and retain the earlier filing date of the pending EU designation.

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 Exit Day. A new UK unregistered design right called the 'supplementary unregistered design right' will be created on Exit Day 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.  

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 on Exit Day. 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 post-Exit Day 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 post-Exit Day. For example, if you are involved in cancellation proceedings at the EUIPO, there will need to be consideration of separate proceedings at the UKIPO in relation to newly created UK rights.  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.  Post-Exit Day, 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.

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 will maintain this regime, thereby allowing continuity of supply of parallel imports into the UK from the EEA. However, 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. The government has issued guidance in relation to exhaustion of IP rights and Brexit.

Counterfeiting and Customs

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

If a rights owner 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 Exit Day, 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 Exit Day, 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 as the current plan is described as being on hold).  In particular, registrants will have until a certain date 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, from a date to be confirmed, all withdrawn domains will be revoked and available for general registration.

Any non-eligible .eu domain that expires during a period to be confirmed will not be automatically renewed, and will move to the 'withdrawn' status as soon as it expires.  Accordingly, you should take relevant action in relation to such .eu domain names as soon as possible, and before Exit Day.

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. The UK government has published guidance in relation to patents/SPCs and Brexit.
  • Copyright: Copyright law will remain largely unchanged though there will be change in relation to aspects of cross-border protection and enforcement of copyright, for example, in relation to portability of content and broadcasting. Further, Member States have until 7 June 2021 to implement the controversial Directive on Copyright in the Digital Single Market, and the UK will need to decide what it wants to do in relation to regulatory alignment. The government has produced guidance on copyright and Brexit (and also database rights).
  • Database rights: A database created in the UK will no longer be protected in the EU post-Exit Day. Where a database is created in the EU, it will not be protected in the UK, but database rights created before Exit Day will continue to exist in the UK for the remainder of their duration.
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