Updated 7 December 2020
The Withdrawal Agreement (WA) between the EU and the UK contains a number of mechanisms to ensure a smooth transition in relation to intellectual property rights at the end of the transition period. In particular, at the end of the transition period, owners of existing registered EU Trade Marks and Designs will automatically be given a comparable UK right.
The WA also contains a provision relating to ongoing cancellation actions against an EUTM or Design, either at the European Intellectual Property Office (EUIPO) or before a relevant EU national court as at the end of the transition period. Specifically, Article 54(3) of the WA provides that, where the existing EUTM or Design is revoked (e.g., on the grounds of a lack of genuine use) or declared invalid, pursuant to a final determination in those ongoing proceedings, the comparable UK right will then also be revoked or declared invalid to the same extent. However, this will not be the case if the grounds for that determination would not apply, or would not have been satisfied, in relation to the comparable UK right. The comparable UK right is treated as if it existed at the date that the cancellation proceedings were commenced against the EU right, and was subject to an application for cancellation under the corresponding provisions in the UK Trade Marks Act.
Whilst separate cancellation actions will not therefore be needed where a comparable UK right is created at the end of the transition period in relation to an existing EUTM or Design (unless the derogation applies), ongoing oppositions at the EUIPO against an EUTM will not be treated in the same way. This is because a comparable UK right will not be created on the basis of an ongoing application for an EUTM or Design. Instead, the applicant for those rights will need to file an application at the UKIPO; if they do so by 30 September 2021, they can claim the filing/priority date of the EU application and any claim to seniority. Accordingly, fresh opposition proceedings would need to be instituted in the UK at the relevant time should an application be made.
Ongoing EU cancellation actions
The UK Government has made The Intellectual Property (Amendment etc) (EU Exit) Regulations 2020. Regulations reflect commitments in the WA and also update, and in some cases correct, a number of earlier IP-related Exit Regulations that were made last year. In particular, they set out a mechanism for how ongoing cancellation proceedings in relation to EUTMs and Designs will be dealt with. The UKIPO has also updated its guidance in relation to trade marks and designs on this issue.
Procedure
Where an EU trade mark or design is subject to cancellation proceedings, a UK comparable right will still be created but the cancellation proceedings will be recorded against the UK comparable right. When a final decision in the EU proceedings is reached (i.e., no further appeals are possible), the UKIPO will need to receive a 'Cancellation Notice' in relation to the EU right, or otherwise become aware of the cancellation. The Cancellation Notice must contain certain details, together with confirmation that the decision is final, and may be submitted by the owner of the relevant right or by any other person.
Where the Cancellation Notice is submitted by someone other than the proprietor, or the Registrar otherwise becomes aware of the cancellation, it will notify the proprietor to give them an opportunity to submit a 'Derogation Notice'. This must be accompanied by a statement of reasons as to why the grounds for cancellation of the EUTM or Design do not apply to the comparable UK right, together with supporting evidence. The Derogation Notice must be submitted at the same time as the Cancellation Notice if filed by the proprietor, or within the period (not less than one month) specified by the Registrar. If a Derogation Notice if not submitted, the comparable UK right will be cancelled to the same extent as the EUTM or Design, unless the Registrar directs otherwise.
It will be possible to appeal the UKIPO's decision.
If the cancellation fails against the EU right, it will be possible to contact the UKIPO so that they can remove the indication that the UK comparably right has an ongoing action against it.
The UKIPO has given some examples of when a derogation is likely to succeed or not. For trade marks:
- derogation is likely to succeed where the cancellation of an EUTM was based on an earlier mark or other right that would not have applied in the UK such as national marks of countries other than the UK
- derogation is unlikely to succeed where the cancellation of an EUTM was based on a UK earlier mark or other earlier right that covers the UK
- derogation is unlikely to succeed where the EUIPO’s cancellation decision is based upon absolute grounds because of its meaning in English
- derogation is unlikely to succeed on the basis that the mark is open to objection in all states of the EU (e.g. where the mark consists of a three-dimensional mark)
For designs:
- derogation is likely to succeed where the invalidation of a design on the grounds of public policy and/or morality was based on words within the design the meaning of which would not be known in the UK
- derogation is unlikely to succeed where the registered community design was invalidated for lack of novelty
Effect
The cancellation of the comparable UK right will take effect on the same date that the cancellation of the EU right is deemed to take effect.
Subject to any claim for compensation for damage caused by negligence or lack of good faith by the proprietor or a claim for restitution based on the unjust enrichment of the proprietor, the revocation/invalidity of the comparable UK right will not affect:
- A decision arising from infringement proceedings which has been finally determined and which has been enforced prior to the date on which the entry in the register of the comparable UK right has been removed/amended ('decision date'); or
- Any contract entered into before the decision date to the extent it has been performed before that date, subject to the right of a party to the contract to claim the repayment of any consideration paid under the contract where, having regard to the circumstances, it is fair and equitable for such repayment to be made.
Next steps
Parties involved in EUTM or Design cancellation actions that are unlikely to be resolved before the end of the 2020 should consider the potential consequences on the comparable UK rights that will be created, and those contemplating such proceedings at the EUIPO may wish to file them before 31 December 2020. In particular, they should consider the extent to which any of the relevant grounds and arguments relied upon may or may not have the same effect in relation to the comparable UK right. Given that there must be a final determination in the proceedings relating to the EU right (which may take some years where cases are appealed to the CJEU and then remitted back to the EUIPO, for example), the need to consider whether the outcome of such cases should be 'honoured' at the UKIPO will remain in place for some time.