Since the referendum result on 23 June 2016, brand owners have been seeking clarity as to the treatment of their valuable intellectual property rights post-Brexit. Until the 'big picture' issues could be agreed, these questions could not be discussed. However, today it was finally announced that a number of issues relating to IP have been agreed, alongside a transitional period which will continue to 31 December 2020. The Withdrawal Agreement remains in draft until all aspects of it have been agreed. Likewise, the transition period will only be approved once all aspects of the Withdrawal Agreement are agreed. The draft Agreement is colour coded to show which aspects have been agreed (green), those which have been agreed politically but where the legal text needs to be agreed (yellow), and those which are yet to be agreed or discussed (no colour).
Current Status – Business as usual until end 2020
Whilst the UK is due to leave the EU on 29 March 2019, it has today been agreed that there will be a transition period until 31 December 2020. During this period, there will be no difference in the protection and enforcement of existing IP trade marks or designs, or of those that are registered during the transitional period. The draft Agreement sets out what will happen at the end of the transitional period and also what will happen to pending applications.
EU Trade Marks and Community Designs
The draft Agreement provides for the continued protection of pan-EU intellectual property rights in the UK post-Brexit, as well as International Registrations designating the EU. The procedure by which such rights will be registered in the UK is one aspect where agreement is yet to be reached – the draft Agreement proposes that this should take place free of charge and brand owners should not be required to take any positive action themselves, i.e., those rights should be automatically preserved in the UK. The EU27's approach here is in line with industry's clear preference, and would create a no-cost and simple system for EU rights holders.
The draft Agreement proposes that any resulting new UK trade marks will keep their EU trade mark filing and renewal dates, and their priority and seniority dates (if applicable). However, if an EUTM is, for example, declared invalid or revoked as a result of proceedings that were ongoing before the end of the transitional period, the corresponding UK right should likewise also be cancelled (unless the relevant grounds would not apply in the UK). As for use, the draft Agreement provides that a trade mark should not be revoked on the ground that the corresponding EU trade mark had not been put into genuine use in the UK before the end of the transition period.
Rights holders have also been concerned about the potentially significant gap in design protection post-Brexit. Many sectors rely on Unregistered Community Designs to protect their valuable designs and, whilst the UK does have its own unregistered design right regime, it has a different scope of protection (e.g., it does not protect surface decoration). The concern in relation to Unregistered Community Design is that, on one interpretation of the law, designs that are first shown in the UK will not qualify for the EU-wide right post-Brexit. This issue has been the subject of much lobbying by UK design led businesses.
The draft Agreement provides that existing Unregistered Community Designs as at the end of the transitional period should remain enforceable in the UK for the rest of their period of protection. However, the UK Government is expected to clarify the treatment of new designs post-Brexit. In its Technical Note issued on 6 March, it stated that, where the UK does not have existing domestic laws to protect certain rights, 'it will establish new schemes'. This could be seen as potentially paving the way for a right mirroring the Unregistered Community Design in the UK.
The draft Agreement provides that there will be an ad hoc right of priority for EU trade mark and design applications that are pending at the end of the transitional period. This will allow applicants to file a UK application during the nine month period after the transitional period, which will be given the same filing and priority date as the EU application.
What This Means for Brand Owners
Assuming all aspects of the draft Withdrawal Agreement can be agreed, brand owners will welcome the certainty that their valuable rights will remain protected post-Brexit, and that there will be a transitional period to allow for them to prepare effectively for Brexit. They can also now consider their filing strategies during this period, given the position in relation to pending applications at the end of the transitional period.
Some brand owners had been considering whether to file UK applications before Brexit, i.e., in addition to EU trade marks. This may still be appropriate in certain cases but, given the firm indications today, we fully expect that a system will be put in place to preserve the UK elements of those rights. It is important, however, to monitor this situation in case an overall agreement is not reached. It is also important to monitor what is agreed in relation to the registration procedure for the UK element of EU trade marks and designs to be preserved post-Brexit, as well as any proposals in relation to the protection of unregistered designs in the UK.