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Mishcon Academy: Digital Sessions - Brexit and Brands: The end of the transition period and beyond

Posted on 9 December 2020

Mishcon Academy: Digital Sessions are a series of online events, videos and podcasts looking at the biggest issues faced by businesses and individuals today.

This session was recorded on 7 December 2020. The information in the film was correct at the time of recording.

Many will have taken advantage of the cost effective EU-wide system for protecting their trade marks and designs. For new rights after 1 January, however, brand owners will need to file separate applications – in both the UK and the EU. But, the package of measures in the Brexit Withdrawal Agreement avoids disruption for rights owners in relation to their existing portfolios. EU trade mark and design registrations will be preserved in the UK through the automatic creation, free of charge, of a UK right. Overnight, the UK trade marks register will treble in size, with around 1.4m EU trade marks being cloned into UK rights.

In this video our speakers consider how brand owners can prepare for the influx of cloned UK rights, the impacts on their portfolios, their commercial arrangements and management of disputes before the Registries and the Courts.

Nina O’Sullivan

Good afternoon and welcome to this Mishcon Academy Digital Session.  This is the latest in a series of sessions looking at the impact of Brexit.  In today’s session we’re going to be focusing on the impact of Brexit for Trademark and Design Portfolio and Enforcement.  My name is Nina O’Sullivan, I’m a Legal Director here at Mishcon and I’m delighted to be joined by Sally Britton, who is a Partner and Head of our Brands Group and also by David Rose, Partner and Head of our IP Disputes Group.  How it’s going to work today is that Sally is going to be speaking shortly on the impact of Brexit for Brand Portfolio Management.  We will then have a deeper discussion on some of the points that she raises and we’ll then pass over to David who is going to look at the impact for Enforcement of Trademark and Designs but also disputes in the Court and before the IP Registries. 

As I’m sure you’ll all have seen, the discussions in relation to the UK and EU’s future trading relationship are ongoing.  They are at a crunch point.  I think we’ve said that quite a few times over the last year.  Indeed, I think the Prime Minister and his counterpart at the Commission are speaking as we speak now this afternoon.  But whilst there is considerable uncertainty about the future trading relationship, we have in fact had certainty in relation to the treatment of Trademarks and Designs post-Brexit for some time and that’s because of the provisions in the Withdrawal Agreement – the divorce between the UK and the EU – which set out how existing rights should be preserved after the end of the transition period on the 31 December but also contain a number of provisions which seek to minimise disruption for parties involved in disputes.  In addition to the Withdrawal Agreement, we have also had exit regulations which have been made by the UK Government, and those have clarified a number of areas as to how the new rights that are going to be created will be treated after the 1 January.  So, in terms of the headlines before I hand over to Sally, from the 1 January 2021, if you do want protection in both the UK and the EU, you are going to need to seek separate UK and EU registrations and if you are looking at unregistered IP rights there are going to be a number of criteria to be thinking about.  However, as I mentioned, the Withdrawal Agreement does provide that existing EU registrations will be protected in the UK through the automatic creation of cloned rights and Sally’s going to explain that in a bit more detail shortly.  If you however, have an application for an EU Trademark or a Registered Community Design pending at the end of the transition period on 31 December that will not be carried through to the UK register; you will need to make a separate UK application if you want protection in the UK and that will be examined and dealt with in the usual way.  But if you file that application by the 30 September, it is possible to retain the filing or priority dates of the EU application, as Sally will explain shortly. 

I thought it would be useful to have a quick look at some of the numbers involved here.  Now, this side is just talking about Trademarks.  The numbers for Designs are obviously a bit lower but as you’ll see here at the moment, the UK Trademark Register has around 750,000 current UK Trademark Registrations and once these new rights are created on the 1 January, that is going to balloon in size to around 2.4 million registrations on the UK Register and that’s obviously going to have a number of implications for individuals and businesses that rely on UK protection. 

So, I’m going to hand over now to Sally.  Sally. 

Sally Britton

Thanks very much Nina.  So, just to go into a little bit more detail in terms of the practicalities around these Cloned Rights, or you’ll also see them referred to in the legislation as Comparable UK Rights.  So, as Nina said, existing EU TMs, Registered Community Designs and IRs designated in the EU, will be automatically converted into Comparable UK Rights.  So, how will that happen?  It will happen automatically and without notification.  There will be no registration.  It will be based on the data that’s on the EU IPO Register at the time, so it will be important to think about updating that register to ensure that the correct details are listed and to ensure, for example, an IR may not have a representative listed to ensure that there is a representative listed and brought onto the UK Register.  And effectively, what you’ll get is a new independent right that can be challenged, assigned, licensed and renewed separately from the EU right.  So, you’re going to have to budget for that within your portfolio or for the clients that you’re working with.  We have got detailed guidance, so just a little plug for our brands checklist that’s on mishcon.com and obviously we’ll share the slides with you after this session. 

There is the opportunity to opt-out of having a Comparable UK Right and details of the opting-out process will be available when the new rights are created.  So, you’ll have to check the register.  There’s a systems maintenance of the UK IPO for a few days after the rights are created, it reopens again on the 4 January, I think at 1.00pm.  Once we identify the new rights there is the option of opting out but we would generally recommend that clients would look also at alternative steps such as surrender or simply letting the right lapse on renewal.  But of course, there could be a reason – such as a Coexistence Agreement or other arrangement – that meant that you did want to opt out and have that right be created as though it had never been created.  It's important also that you docket, so you add to your database the numbering of the new UK Comparable Rights; the new numbering schemes have been published, I’ll mention those in a second and record relevant deadlines associated with those rights. 

Something that has caused a little bit of discussion is around renewals, in terms of Comparable Rights and you will need to budget for separate renewals.  So, something that you may have renewed on the EU Register now that’s maybe due for renewal in February next year, will actually need to be renewed despite the fact it shows as being renewed, you know, all the way through to 2031 on the EU Register, will still need to be renewed separately on the UK Register after the 1 January because the renewal date falls after that date. 

So, I said that I would mention the numbering, we’ve known the numbering for some time.  As Nina said, we have had a little bit more certainty in terms of creation of new UK Trademark and Design Rights.  Just looking at an EU TM for example, numbering of the UK Right is 009 plus the last eight digits of the EU TM.  Looking at the IR follows a very similar system and the same for the RCD and the IR. 

Perhaps a moment now just to kind of mention the kind of rights that are created from IRs.  The rights that are created from an IR will be a separate right, it won’t be a designation of the IR.  There will be a process potentially to re-designate the Comparable Right that’s created back into the IR but we don’t expect many people to rely on that.  The process will actually make the Registered Rights that would have been created in the UK as the Cloned Right, it will take it back through the application process.  And if you’ve looked at the initial slide that Nina presented, what we’re looking at is a very busy UK Register after the 1 January.  We expect that most people with brands, who are able to obtain a Registered Right automatically in the UK on the 1January, would seek to avoid further publication and an opposition process in that much more crowded environment. 

So, agreements.  So, there is some confirmation in relation to agreements that are governed by the law of England and Wales in terms of EU TMs and RCDs.  So, we do have some confirmation that they will cover the Comparable UK Rights but of course this also depends on the terms of the agreement and also on the governing law of the agreement.  There is no certainty that the same interpretation will apply to an agreement in the EU, for example.  It will also be important for you to make sure that you’re updating licensees of the new UK Right and checking as I mentioned, there’s this opting-out provision, check that its creation doesn’t breach any agreement.  And it would be sensible to take steps now just to check agreements generally if you haven’t done so already.  Just looking at the definition of territory, often there was accommodation for the fact that people thought people would be joining… territories would be joining the EU, not necessarily leaving them and there may be a definition such as, the EU from time-to-time.  Do look at that and identify any vulnerabilities or opportunities to renegotiate and as I said, check key terms such as, Governing Law and Jurisdiction. 

It's also important to think about registering licenses and security interests at the EU IPO, to give you the ability to register with benefits those security interests in relation to the Comparable UK Rights at the UK IPO. 

So, what about applications?  So, obviously we’ve got these Comparable Cloned Rights that are created without cost, automatically, which is, you know, obviously a great thing for existing rights owners.  What about applications?  So, if there is a pending EU TM or RCD application on the 1January, there will be a nine month window, until the 30 September 2021, to file a UK application for the same mark and you’ll retain the same filing or priority date as the pending EU application.  And also, any seniority.  So, if you think about it, you may have had a mark that’s under opposition and has been under opposition for some time, so you know. it could be several years as some EU oppositions do take several years.  You can file with the benefit of that original filing date.  A Registered Community Design with deferred publication will be treated as a pending application. 

It’s important to note though, that the UK application will be examined separately by the UK IPO and may well be opposed and again I refer to the very crowded register and just be understanding that at the moment, the UK IPO when notifying earlier rights owners, only notifies the owners of IRs designating the UK and earlier UK registrations.  Once the Cloned Rights are taken onto the UK Register, there will be many more notifications and we can expect more oppositions.  What does this mean? I think it’s important to think about clearance and watching services and the impact of the new applications that will be filed with potentially these very early filing dates when filing new UK applications after the 1 January 2021. 

Just for a kind of brief aside in terms of EU domains, EU domains obviously were brought into being quite a few years ago now but there is an eligibility requirement.  EU Citizens in the UK and UK Citizens residing in the EU will remain eligible for EU domain names.  However, unless steps are taken to demonstrate compliance, effective EU domain names will be suspended from the 1 January until the 31 March 2021 and will no longer work for website or email but can be reinstated if eligibility criteria is updated.  They could then be withdrawn after the 1 January and revoked from the 1 January 2022, so it’s important to note that there is a qualification criteria for EU domain names.  If you’re not in the EU, if you’re not resident in the EU or have an established place of business in the EU, you will not be able to register, maintain or renew EU domain names. 

So, finally, just in terms of my kind of quick review of the various kind of registered rights and rights to consider in terms of your portfolio, really is what I’m looking at, there is a dilemma for Designers to think about in relation to Unregistered Community Designs.  Unregistered Community Designs have been a very popular form of protection in the UK for some time and there is I am pleased to say confirmation that Registered Community Designs in existence on the 1 January, will continue to be protected in the UK for the remainder of the three year term.  So, it is in Designers’ interest to think about disclosing Designs prior to the 31 December in either the UK or the EU to take advantage of this.  After the 1 January 2021, there is a requirement for the Design to be first disclosed in the EU.  Now, there’s a lot of discussion around this, both in the UK and elsewhere.  If this means that first disclosure must be in the physical territory of the EU, first disclosure in the UK after the 1 January 2021 will mean that the Design does not qualify for Unregistered Design Protection and may also destroy a novelty of the Design in the EU which means it cannot be registered.  So, what’s the solution here?  So, as I say, there’s been a lot of discussion around this in the UK and a lot of lobbying around it.  So, the UK has committed to create a new, supplementary Unregistered Design Right, which will mirror the Unregistered Community Design Right.  And this new Design Right requires first disclosure in the UK or another qualifying country.  So, what this mean is almost exactly like the position for the Unregistered Community Design, first disclosure in the physical EU territory after the 1 January may prevent those rights existing in the UK and may also destroy a novelty of the design in the UK.  It's worth noting that there is a UK Design Right still in existence for 3D Designs and it remains available but the qualifying criteria changes on the 1 January and the EU would not qualify for that. 

Nina O’Sullivan

So, this dilemma for Designers, where do they disclose first because of this risk that if they disclose in one territory they’re not going to get protection in the other.  What are the solutions that Designers are looking at here?

Sally Britton

One solution is to disclose prior to the 31 December in the UK or the EU, to maintain continuous protection for the three year term.  That’s been confirmed.  Another option of course, is registering Designs.  So, of course, you could register Designs in the UK and the EU and actually it’s a very good time to register a Design in the EU at the moment.  Designs register very quickly.  If you get it through by the 31 December, you’ll get Cloned Rights in the UK, so that’s something to think about.  Another thing to think about is simultaneous disclosure.  So, for example putting something… disclosing something in the UK, perhaps at a retail show, and potentially simultaneously disclosing it in the EU at the same time, potentially through a physical even or perhaps some people are talking about live streaming.  Another thing that people may want to think about is actually Copyright Protection.  The recent Cofemel decision means that there potentially more of an opportunity to rely on Design Law, but as I’m sure we’ll talk about in the Dispute section. 

Nina O’Sullivan

You spoke there about Registered Designs reaching protection quite quickly, so does there come a point at which if you are considering filing an application now for a Design and/or a Trademark that you should be thinking about filing both UK and EU or should you just wait for the 1 January; it doesn’t really make much difference?

Sally Britton

So, in relation to Designs, I think you still have a chance to get the Design through.  There is no set timeframe for filing a Design and getting it registered, but we find that registrations can come through for Designs within a couple of days if deferment isn’t requested.  However, in relation to Trademarks, we are too late now to get something registered.  Obviously, we’re quite close, we’re within a month of the 31 December and we have a three month publication period, so practically speaking an application that’s filed today just isn’t going to register. 

Nina O’Sullivan

I’m going to now pass to David. 

David Rose

So, I’m first of all going to look at some aspects of procedure in the EU IPO and how things will look in the new world order and then I will do similarly in relation to the UK IPO and then I will look at some issues relating to disputes in the Courts. 

So, just looking at the EU IPO first in the area of UK rights that are relied upon in ongoing proceedings in the EU IPO.  Maybe it’s an opposition where you’ve relied upon an earlier UK application or registration or a right in passing off and you’re pursuing the opposition at the EU IPO.  This is what the EU IPO has said.  It’s said that earlier UK rights will no longer be relevant, in whatever guise, and I’ve listed, you know, the four principal ones there.  Earlier UK rights, maybe there’s reputation acquired in the UK, distinctiveness through use or maybe there’s an absolute ground that’s specific to the UK.  They will all fall away.  Probably the most important words on this slide are the first one: EU IPO’s position.  There is no law as such, this is guidance that has been issued by the EU IPO, however it is consistent with a line of case law that they developed through a decision in the general Court called Metro, that some of you may be familiar with.  It’s this idea that you have to have the right at the time the decision is made.  So, I think in that case, the mark hadn’t been renewed or whatever, even though it was very much an extant earlier right at the date of filing of the opposition and indeed, in the UK we’ve tended not to follow Metro, even though supposedly it comes from the same line of authority.  So, as a result, any opposition or invalidity based solely on a UK right will be dismissed, even for those disputes that began before the end of the transition period.  Ultimately, this may be a decision that needs to be considered by the Courts, and I’m not suggesting that anyone in this situation should necessarily take that dismissal lying down.  In a similar vein, in order to rely upon a reputation, reputation must be in the EU, so not the UK, as at the date of the relevant decision.  So, you can see the EU procedures are really closing in around the EU x the UK. 

Just as a slight contradistinction, what’s the position where you are involved in a dispute or an issue over use?  In the UK and the EU and this obviously isn’t going to change certainly not immediately after Brexit.  You get five years grace period after the date of registration in which to use your mark.  After that period it becomes vulnerable to cancellation for non-use.  So, what’s the EU IPO’s position here?  Use of an EU Trademark in the UK on or after the 1 January will not maintain an EU Trademark.  That perhaps is common-sensical.  However, use of an EU TM in the UK before the 1 January will be relevant, it will provide the necessary use in order to support use in the event of a challenge after that five year period.  So, a really quite simple bifurcation there, you can rely upon the use in the UK before the 1 January; you cannot afterwards. 

We’re going to have a situation arising where a bunch of UK Trademarks are going to… a new bunch of UK Trademarks, millions as Nina has identified are going to come onto the UK Register.  So, what’s the position with ongoing EU cancellation proceedings? Perhaps you have an EU Registration, you automatically get a clone in the UK Registration after the 1 January but that EU Trademark is the subject to ongoing cancellation proceedings.  That might be in the EU IPO or it might be in the national Courts, because of course you can challenge an EU Trademark, challenge the validity of an EU Trademark as a counterclaim in infringement proceedings in the national Courts.  Now, what the UK IPO has said is that it will honour a final determination of an invalidity decision in the EU IPO or in the UK Court, unless the grounds for the decision do not apply in the UK.  So, for example, if an EU Trademark was challenged on the basis of earlier French and German Registrations and that challenge was successful and ignoring conversion for a minute, that EU Trademark dies but it would be said that that is not a ground that could be relied upon in the UK anymore.  So, in that situation you can assume that it won’t affect the Cloned UK Right.  There is a procedure that the UK IPO has recently published as to how you need to go about that.  If there is a Cloned Registration in the UK, you will need to look behind it to make sure that there are no rights, that it’s not being challenged and if it is being challenged, what is the basis of that challenge because it could affect how that mark might subsist and exist on the UK Register in the long-term.  And I stress, ‘the long-term’ because EU IPO proceedings, as you know, they can last for many years and so this Cloned UK Registration could likewise be vulnerable for many years.  The advice there perhaps, is to consider filing any planned cancellation actions at the UK IPO before the end of the year because you will get the benefit it you do so before then. 

Let’s shift from the EU IPO to the UK IPO because there isn’t necessarily a mirror effect here with some of the rules that are going to be put in place.  In relation to the UK IPO ongoing oppositions and cancellation actions before the UK IPO based upon earlier EU rights, will continue on the basis of the UK Act as it stood on the 31 December.  What does that mean?  It means that we are taking in the UK, a different position to the EU.  It does mean that earlier rights, earlier EU rights, relied upon in a UK opposition, maybe it’s a pending EU application, maybe it’s a Registered EU application, will continue to impact on that case, on that pending case, into the new year.  So, where opposition proceedings are ongoing against an EU Trademark, watch for a UK application and consider filing separate opposition at the UK IPO once it’s published.  Indeed, you could end up having two sets of proceedings that you need to keep an eye on.  We looked at use and reputation in the context of the EU.  Looking at it now, in the context of the UK IPO, in the EU before the 1 January you can rely upon use in the UK; you can’t afterwards.  It’s more of a similar situation here in the UK.  So, use of an EU TM in the UK, i.e.  outside the UK, before 1 January will count as use of a Comparable UK Trademark if used during that relevant period.  But if it includes time after the 1 January, use in the EU will not be relevant.  So, you do have that very clear demarcation line, as you do with the EU rules.  Rely upon use in the EU, even it outside the UK before 1 Jan but not afterwards. 

So, when you’re looking at use, let’s say you have a registration from 2018 which means it will be vulnerable from 2023 and it’s an EU Trademark, you can look at use in the wider EU between 2018 and 2020, when determining what the period of use is, what the scope of use is and whether you actually do fulfil the use requirements.  And I should say, the UK IPO will adopt the same rules effectively in relation to reputation of a Comparable UK Trademark.  So, before 1 January you can look at reputation in the wider EU but you cannot afterwards. 

Okay, I want to move away from the EU IPO, the UK IPO and just look briefly at some issues before the Courts.  Arguably, there are going to be some advantages to issuing proceedings on or before the 31 December.  The reason for this is the Withdrawal Agreement.  The Withdrawal Agreement is the great agreement from earlier this year which was secured shortly after the election of the current Administration but within the Withdrawal Agreement, within its many articles and paragraphs, is Article 67.  Article 67 says a couple of quite important things.  What it basically says, in relation to proceedings that are going on in the UK before the 31 December, the enforcement rules around the EU Trademark Regulation will continue to apply and the rules around securing EU-wide relief through what is called the Recast Brussels Regulation, will continue to apply.  So, in other words, in relation to proceedings that were brought before the end of this year, you get the remedies as it were of the EU Trademarks Regulation and the EU Judgments Regulation as Recast Brussels is also called. 

Can a UK Court grant EU, pan-EU relief  as it can now, after the 31 December?  Well, on a pretty clear reading of Article 67, the answer is yes.  However, I think it’s fair to say that the waters have been somewhat muddied by the Exit Regulations,  these are the domestic UK regulations that will come into force which suggest that you can only get relief after the 31 December in relation to the Comparable EU Right.  Arguably, those Exit Regulations are subordinate to the Withdrawal Agreement, not least because the first iteration of the Exit Regulations were drafted at a time before we even had the Withdrawal Agreement.  They were drafted at a time when we were looking at a possible cliff-edge as of the 31 December last year.  So, that will be a very interesting issue to see whether you can get pan-EU relief as the Withdrawal Agreement seems to indicate after the end of this year for proceedings commenced before then.  And that’s why we say there’s potentially some advantage for those of you looking to issue proceedings on EU Trademarks, to do so before the end of this year because after the 1 January, everything changes.  If it’s a new claim, separate proceedings will need to enforce UK and EU rights and so the management of cross-border disputes is going to become more complex, the UK will genuinely be a third country. 

And that also impacts upon the strategy that UK-based companies who do not have an establishment in the EU might wish to consider.  Under the cascade rules as they currently apply in the EU Regulation, if you’re involved in a pan-EU dispute or were involved in a pan-EU disputes, maybe you’re a British company and you’re being pursued by a German company which owns EU Trademarks, the cascade requires that as a default you need to be sued in the UK because you sue in the jurisdiction, the place, where the defendant is established.  But of course, when we’re not in the EU anymore, you ignore that for purposes of a UK company with no establishment in the EU and you look at the next piece of the cascade which says that you will commence proceedings in the place where the claimant is domiciled, is established which in my example would be Germany.  And so, all of a sudden, rather than being… having a default of being subject to proceedings in the UK Courts, you’re much likely to be subject to proceedings in the EU Courts. 

A brief word about customs enforcement which I know is important to a number of you.  The normal process, as many of you will know is to file an AFA – an Application For Action.  You could always do it in the UK but equally you could do it EU-wide and get the benefit of an EU-wide customs notification and all the procedures that are involved around detention, notification, the ability to condemn counterfeit goods and so on and so forth.  That regime is changing.  The way it’s going to work with existing EU AFAs, if they were submitted in an EU-Member State, not the UK, they will remain valid in the EU but not in the UK and likewise, if your AFA was submitted through UK customs, they will remain valid in the UK but not in the EU.  So, it is important to check your AFAs and to make sure that they are properly filed and they are covering both the UK and the EU as we move into 2021. 

The final thing I’m going to address on slides is Exhaustion of Rights.  So, as you know, the EU Single Market, subject to certain exceptions, goods that are bought and sold in one Member State can be freely traded in another Member State and a Rights Holder, Trademark Owner, Design Right Owner, whatever it might be, cannot use those IP rights to prevent other people through the supply chain, cannot use those IP rights to stop them from trading, because their rights are exhausted after they made their first sale in the EU.  It's important to stress that those IP rights remain exhausted before the end of this year.  It’s business as usual; it’s the system that we’re used to, it’s the para importation of clothing, medicines, whatever it might be from one country to the other in the normal way.  But this is not something that’s going to stay the same, it is going to change and perhaps what’s in place at the moment, and as I say it may well change if there is a trade deal, in fact I’m sure it will change if there’s a trade deal struck, but as things stand at the moment there is no symmetry. 

What the UK has said, is that it will unilaterally maintain EE-wide exhaustion for the importation of goods that have been put on the market in the EEA and to some, perhaps that’s a sign of be it caution, being defensive as everyone knows, a lot of our medicines, a lot of our valuable parts for cars and all sorts of machinery are imported from the EU and it would be some might say, unfortunate, if all of a sudden we couldn’t get our medicines from the EU para imported in, as is the case at the moment.  So, the UK intends to allow the EEA-wide exhaustion moving forward but again, there’s asymmetry.  In the EU, that will not be the case, goods that are exported out of the UK into the EU will not be exhaustive and IP Rights Owners can challenge the sale or defer the sale of those goods in the EEA.  Now, the UK Government has said that their articulation of this position is a temporary measure and it does intend to consult on the long-term position early in the new year and, as I said, I would have thought that it very much would be catered for if there is a Trade Deal but if there isn’t, this is going to be politically, a real hot potato. 

Nina O’Sullivan

Thanks David.  So, just wanted to unpack some of those points a little bit more and starting with disputes before the Registries.  I think what’s clear is that there’s going to be, really, an uptick in disputes before the UK IPO because obviously at the moment, if you want to challenge an EU Right, you go straight to the EU whereas now you have to think about challenging the EU Right and also the Comparable UK Right that’s created apart from obviously those pending cancellation actions that you mentioned.  And many businesses or parties that have been involved in disputes might be very used to the EU IPO procedures but less used to how things work at the UK IPO.  Can you explain what the differences are?

David Rose

I think it would be much easier to explain the similarities because the differences are very, are very considerable indeed.  The EU it’s a fully written procedure, I can think of about three hearings at the Board of Appeal over the last 20-odd years.  It’s a drawn-out procedure, extensions of time are available as a right and quite quickly, suspensions will be given for a long time, the cooling-off period can last a couple of years and it’s not uncommon for proceedings to go on for a, for a very long time. 

In the UK, the procedure is much quicker.  Yes, there is cooling-off, although the cooling-off period is a bit shorter, extensions of time are difficult to get and you need good reasons, suspensions, you need good reasons.  In relation to invalidity and cancellation actions you can go straight to the Court, that’s not the case with opposition proceedings.  And for those who are familiar with proceedings in, say, the TTAB in the United States, it’s a little bit akin to that because we do have options for disclosure, for cross-examination of witnesses.  We… it’s very common, in fact, the UK IPO will always offer the parties a hearing.  They don’t always accept the invitation but they often do.  And, as you can imagine, with hearings with the potential for disclosure for cross-examination, they can be more expensive as well. 

So, having said all of that, for those who are looking for a more thorough examination and who are perhaps looking to test evidence in a more robust way and to then use that evidence in proceedings elsewhere in Europe it’s actually not a bad forum.  The other thing to say is that there is the option of getting much higher cost recovery than you can get in the EU IPO.  And indeed, if you bring invalidity and cancellation actions before the Court, the prospects of getting very high cost recovery in excess of 60/70% for the winner, are very good. 

Nina O’Sullivan

In terms of proceedings at the EU IPO, can you explain what the position is for representation and the ability of UK Representatives to continue to act?

David Rose

In short, UK Representatives – Law Firms, Trademark Firms – will not be able to be representatives before the EU IPO after the 31 December which is why a number of UK firms, not everyone, far from it, but a number of UK firms, have set up establishments in the EU to carry on practising.  Little plug here, Mishcon’s has set up Mishcon de Reya IPBV which is a Dutch Trademark Attorney Firm, which will be representing with the blessing of our clients, of course, will be representing our clients through our office as of the new year and really, that’s the way that it has to be.  The EU IPO and I don’t know the exact mechanics will, I think kick out UK Representatives at the start of next year. 

Nina O’Sullivan

And that’s for new matters, so in ongoing matters UK Representatives can continue to act?

David Rose

Thank you for the prompt.  I was focusing on new matters.  Yes for existing cases, they can carry on until they’re complete and that may last, as I said earlier, many, many years and that’s both a filing, where you might be in the middle of prosecution, a filing may then be opposed or maybe you’re involved in ongoing opposition or invalidity proceedings again, you can keep your representation going through your UK office until those proceedings are concluded.  So, you will see obviously, if you were to plot it on a curve, you’ll see a gradual downward slope of UK-based representation in the EU IPO over the coming years. 

Nina O’Sullivan

And I guess then turning to the UK IPOs, so there is no requirement to have a representative but there is a requirement to have an address for service and at the moment, it’s okay to have an address for service in the UK or the EEA and there’s obviously been some very recent developments here.  If you can explain those?

David Rose

What the UK IPO has said is it’s effectively giving a three year sunset period so, if for example in relation to the Cloned Rights which will automatically be registered in the UK as of the 1 January, if they have, as often they will, have an EEA Representative, they can sit there for three years and then there’ll need to be a change.  Again, there’s caveats for disputes so, if that Comparable Mark is the subject of a dispute during those three years, the EEA address for service can continue.  But again, similar to the position in the EU, if you were to plot it, you will see that there will be a diminishing number of EEA-based addresses over the next period.  And, of course, for those cloned rights that do get involved in disputes in the first three years, it’s not unreasonable to assume that perhaps a German Trademark Attorney Firm that is the address for service will want to pass it onto a UK-based firm which has experience of UK-based disputes anyway. 

Nina O’Sullivan

So, aside from the Cloned Rights where it’s possible to retain the EEA representative going forward for new applications, new contentious business, there’ll need to be a UK address for service?

David Rose

Yeah, so as I said, there’s a little bit like in the EU there’s a bit of a transitional arrangement for existing matters but yes, for new filings for example, you need to have an address for service.  I forget the full list, it’s got to either the Channel Islands…

Nina O’Sullivan

It’s Gibraltar, I think, as well as the UK.  Yeah, and Channel Islands.  Yeah. 

David Rose


Nina O’Sullivan

Okay, and turning to the Courts, so existing CJEU Case Law, that will remain binding on the UK Courts as EU-retained law, on the 1 January 2021 but it can be overturned by the Supreme Court and also by the Court of Appeal.  That’s a recent change, the Government consulted on that and decided to extend that power to derogate from existing CJEU Case Law to the Court of Appeal.  Do we think there’s going to be a rush to the Courts in the early days and do we think the Judiciary are going to be ‘chomping at the bit’, as it were, to overturn any existing retained EU Case Law, in the Trademark and Design Space?

David Rose

I mean, the obvious answer is, I don’t know.  I think that there will inevitably be divergence.  We know in certain areas of law that our Courts have been unhappy with how the Court of Justice has determined certain issues.  I mean, the one that sticks in my mind and maybe shows my age a little bit is Lord Justice Jacob in L’Oréal and Bellure, the famous ‘Smell-alike’ case which was all about extended protection of Trademarks, Unfair Advantage detriment, so on and so forth.  He was openly hostile to the CJEU decision there.  He thought that the Court was denying third parties to tell the truth about their brands and I do think that we may find that there is a slightly, a slight liberalisation perhaps, of how we approach Trademark Law.  Maybe it doesn’t… won’t include some of the strictures that come with things like Extended Protection moving forward.  There is a view that some of our Judges are a little bit more laissez faire than some of the Judges who work in the continental Courts.  I think our Judges are fair-minded.  I think they’re respectful of years of precedent that have been built up and so I think it’s going to be evolution, not revolution.  And I think particularly for those cases that were started under a particular regime but have you know, tripped over into the new world order, post 1 January, I think the court is going to be mindful of the fact that there’s a certain element of natural justice that requires these cases to be determined according to a set of understandings.  I could be proven wrong about that but my sense is more evolution than revolution. 

Nina O’Sullivan

It’s days now before the end of the Transition Period but there are some things to be thinking about in terms of preparing.  Do look at your filing strategy and the use that you’ve made of your brands.  Whilst there are those provisions that help in terms of being able to rely on use before the end of the Transition Period in either market, just make sure that you’re looking at what use has been made in identifying where there may be gaps in protection.  Have a look at your EU IPO records and check they’re up-to-date because it is those records that are going to be ported across to the UK Register.  Now, it’s probably too late to get the EU IPO to update records, however it will be possible after that date, after the 1 January to liaise with the UK IPO and to tell them that things are incorrect and need updating.  In particular if an assignment of an EU right has not been recorded at the EU IPO there will be a period of time in which to notify the UK IPO that that needs to be reflected on the UK Register. 

For the reasons we’ve discussed, it is going to be necessary to put aside increased budget.  There will be more renewals unless you decide to surrender or let marks lapse on renewal.  Obviously more filings, as we’ve said but also enhanced levels of disputes. 

It's a good opportunity also to be thinking about your agreements.  Sally picked up on points relating to territory; is it the EU, is it the EU from time to time for example?  And also to bear in mind what she was saying about the fact that, in relation to the Comparable UK Rights, the UK position is that any licensed security interest or agreement will extend to the Comparable Right unless there is something to the contrary in that agreement but that will of course depend on what the Governing Law of that agreement is. 

And just generally, make sure that you are updating your portfolio records and docketing all of the relevant dates that we’ve been speaking about today.  There is that option to opt out, for example, of having a Cloned Right after the 1 January 2021.  If you are going to do that and, as Sally said, there’s really very limited reasons why you may want to do that, for example if it’s going to put you in breach of an agreement or if you may be infringing a third party’s right by having the UK right.  There is a process to go through, there will be a form to complete and if there is an affected party you will have to give them notice that that opt-out is going to take place. 

Also, docket any dates for recording licenses and security interests at the UK IPO where those have already been recorded at the EU IPO and just note that there is that period, that nine month period to the 30 September, during which a party that has a pending application at the EU will be able to file at the UK IPO and take advantage of the priority of filing date and that is something that you are going to be thinking about if you’re filing for new applications after the 1 January, to make sure that you are checking and watching for those applications happening. 

We are very happy to answer any questions after the event so please do get in touch with us if there is any burning issues that you would like to ask us and we will share the slides and a recording from the session as well.  But thank you all very much for joining us and enjoy the rest of your evening.  Thank you. 

The Mishcon Academy Digital Sessions.  To access advice for businesses that is regularly updated, please visit mishcon.com. 

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