Brexit and IP: What happens next?

Posted on 22 January 2020

The UK is due to leave the European Union on 31 January 2020.  As things stand, this will be on the basis of the revised Withdrawal Agreement negotiated by Boris Johnson in October 2019, rather than on a No Deal basis.

Under the Withdrawal Agreement, there will be a transition period until 31 December 2020. This period may be extended, provided that the UK and EU27 agree to this extension by 1 July 2020. However, the UK Government's position is that there will be no extension to the transition period and it is legislating to entrench this position in law.

Transition Period: Status Quo Applies

During the transition period, EU law will continue to apply to the UK, and so there will be no change in relation to protection and enforcement of IP rights during this period.  EU Trade Marks, Registered Community Designs (RCDs) and Unregistered Community Designs (UCDs) will continue to extend to and apply in the UK until the end of the transition period. There is therefore no need to take any action in relation to existing EUTMs or EU Designs.

The continued application of EU law during the transition period will however no longer be on the basis that the UK is a Member State, but will arise as a result of the Withdrawal Agreement.  In effect, the UK will be treated still as if it is an EU Member State.

We will continue to represent clients before the EUIPO during the transition period. As part of our Brexit preparations, we have also 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 EUTM and RCD matters at the EUIPO after the end of the transition period.

Withdrawal Agreement: Provisions relating to EUTMs and EU Designs

The Withdrawal Agreement deals with preservation of EUTMs and EU Designs in the UK at the end of the transition period through the automatic creation of equivalent rights in the UK. This will take place on 31 December 2020 (on the assumption there is no extension to the transition period). 

In summary, the Withdrawal Agreement provides as follows in relation to the treatment of EUTMs and EU Designs at the end of the transition period:

  • Existing EUTMs and RCDs will be preserved in the UK at the end of the transition period through the creation of an equivalent UK right, with the same priority and seniority. This will happen automatically, and at no cost to the right owner.  Similarly, where there is an UCD which arose before the end of the transition period, the owner of that UCD will automatically become the holder of an enforceable right in the UK for the remaining period of protection of the corresponding UCD. 
  • Where an application for an EUTM or RCD is pending at the EUIPO at the end of the transition period (i.e., on 31 December 2020 or any agreed extended date to the transition period), the applicant will have a 9 month priority window in which to file a UK application, i.e., they will retain the filing/priority date of the EU application.  At this stage, it is not necessary to file dual EU and UK applications, though this should be considered on a case by case basis, particularly as we get closer to the end of the transition period or if an EUTM application is opposed. 
  • Where an EUTM or RCD 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 United Kingdom).  
  • Where a UK court has made a referral to the Court of Justice of the European Union (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.  Key referrals from the UK Courts which will therefore be determined, include questions recently referred by the Intellectual Property Enterprise Court relating to UCD and whether it is necessary for the first disclosure of the design to take place in the EU for UCD to arise. 
  • An equivalent UK trade mark arising from an EUTM 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 (see further below re use).
  • When assessing the reputation of an equivalent UK trade mark arising from an EUTM, 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 equivalent UK trade mark will only be based on use of the mark in the UK.

What will happen to IP laws after the transition period?

During the transition period, the UK and EU27 will negotiate the terms of their future relationship, including in relation to trade. It remains to be seen how much regulatory alignment will be agreed, including in relation to IP rights. If no agreement is reached by the end of the transition period, this would lead to a 'No Trade Deal Brexit'. We will update you on developments on the negotiations throughout the year.

In addition to the provisions in the Withdrawal Agreement, the UK had prepared various Exit Regulations which set out how the newly created UK trade mark and designs will be treated, the procedures for priority applications based on pending EUIPO applications, and other planned revisions to UK trade mark and design law practice. The Exit Regulations will now not come into force until the end of the transition period. As their drafting took into account the possibility of a No Deal situation, it is possible that over the transition period that certain provisions in the Exit Regulations will be revised though we expect much of the detail to remain the same and our article in October 2019 summarised the key points. One point that brand owners could consider now is in relation to use of an existing EUTM (i.e., whether there is use of the EUTM in the EU27 and the UK), though the Exit Regulations provide that use of an existing 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 during the relevant period.

In general terms, existing EU IP laws that apply in the UK (as at the end of the transition period) will be retained as part of UK law once the transition period has completed, with appropriate modifications. Over time, however, the UK may diverge on certain aspects in relation to retained EU laws. 

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