Brexit: What It Potentially Means For Trademark Rights Holders

08Apr

Brexit: What It Potentially Means For Trademark Rights Holders

As the United Kingdom decides whether to continue forward with its plans to exit the European Union, it’s important for trademark owners and applicants to understand how their rights will be affected and what precautions they should take to ensure their trademarks are adequately protected.

What is Brexit?

In October 2016, the United Kingdom’s Prime Minister announced her intent to invoke a treaty provision, known as Article 50, which provided notice of the United Kingdom’s intent to withdraw from the European Union. (Britain + Exit = Brexit.)

In March 2017, the United Kingdom officially notified the Council of the European Union (which represents and consists of the governments of the European Union’s members) of its intent to withdraw. By notifying the Council, the United Kingdom started the two-year countdown until it’s officially withdrawn from the European Union. Originally, the United Kingdom’s withdraw date was scheduled for March 29, 2019. However, several current events have altered this date, setting the United Kingdom’s new withdraw date for either April 12, 2019, or May 22, 2019, should certain conditions occur.

One of the areas undoubtedly affected by Brexit are intellectual property rights. Since the United Kingdom’s official announcement of its plans to leave the European Union, intellectual property owners have questioned how the withdraw affects their intellectual property rights, both present and future. In response to various concerns and questions, the United Kingdom’s Intellectual Property Office has issued several technical notices and guidance pertaining to the different forms of intellectual property.

This article will discuss what changes intellectual property owners, more specifically trademark owners, can expect as reflected in the aforementioned technical notices and guidance.

How does Brexit affect my trademark rights?

  • Trademarks registered under U.S. law only

Trademark owners whose marks are registered under U.S. trademark law only will not be impacted by Brexit. Since Brexit only impacts those rights holders with trademark protection in certain international countries, U.S. trademarks owners need not worry about Brexit’s impact.

However, it’s important to note that if a U.S. trademark owner is considering trademark protection abroad, they will need to take additionally steps to ensure that their trademark is protected in the United Kingdom. These steps will be discussed in further detail below.

  • European Union Registered Trademarks on Brexit Day

The United Kingdom is not immune to the concerns of trademark owners regarding Brexit. In fact, “the UK government has stated that their goal for IP rights in the UK post-Brexit is to recognize existing EU rights in the UK by creating duplicate protections in UK law and provide continuity where possible.”[1]

With this goal in mind, the United Kingdom will continue to protect those European Union Trademarks (“EUTM”) currently registered and in force on the date of Brexit. According to the United Kingdom’s Intellectual Property Office, “existing EU trademark [owners] will have a new UK equivalent right granted that will come into force at the point of the UK’s exit from the EU.”[2] This means that registered and in force EUTMs will receive protection in the United Kingdom automatically, being treated as if they were registered in the United Kingdom.

EUTMs that fall within this new equivalent right will also receive other benefits. For example, this new right is only subject to “minimal administrative burden[s]”[3] and doesn’t require an additional fee or application. However, this new equivalent right falls short in two ways. First, EUTMs will be subject to the United Kingdom’s renewal fee in order to keep their trademark in force in the United Kingdom. (Currently, under the United Kingdom’s trademark laws, renewals are required ten years after trademarks are placed on the country’s register). This can involve a substantial amount of money for trademark owners whose marks are filed in several classes. Second, EUTMs won’t automatically be added to the United Kingdom’s register, but will be added at a later date which the Intellectual Property Office hasn’t provided. While this may be beneficial in terms of paying renewal fees, it may cause problems in the future, as many trademark owners and applicants use the register to determine if a mark is in use or available for registration.

  • Pending European Union Trademarks on Brexit Day

Applications for EUTMs that are pending on the day of Brexit are subject to an alternative arrangement. Pending EUTMs will be given nine months from the date of Brexit to file a trademark application with the United Kingdom’s Intellectual Property Office to obtain protection in the United Kingdom. This means that trademark owners will need to pay a separate application fee to the United Kingdom’s Intellectual Property Office and undergo a separate registration procedure. The United Kingdom’s Intellectual Property Office has also stated that it will not notify those applicants with pending EUTMs about these changes and the additional nine-month period.

More importantly, however, is that pending EUTMs may use their EUTM application date for priority purposes in the United Kingdom. “[F]or a period of 9 months from exit, the government will recognise filing dates and claims to earlier priority and UK seniority recorded on the corresponding EU application.”[4]

  • Filing for European Union Trademarks or UK Trademarks After Brexit Day

For those individuals looking to file EUTM applications and/or UK Trademark applications in the future, they will now be required to undergo two separate registration procedures, including paying two sets of registration fees. Under this scenario, there’s no nine-month period available and no ability to conserve a priority date from a prior trademark application.

How does Brexit affect trademarks filed under the Madrid Protocol?

The Madrid Protocol is a treaty that allows applicants to obtain trademark protection in multiple countries using a single application and paying a single set of fees.

Since the United Kingdom is a member of the Madrid Protocol, Brexit will not affect the United Kingdom’s membership to the treaty or the benefits provided by the treaty. The United Kingdom has stated that trademark owners and applicants can still utilize the Madrid Protocol to protect their rights in the United Kingdom and several other countries.

However, it’s not exactly known how pending Madrid Protocol applications that designate only the European Union will be treated. It’s unclear whether Madrid Protocol applicants will be able to amend their application to also specifically include the United Kingdom, or whether applicants will have to withdraw their original application and file a new application. According to a document authored by the World Intellectual Property Organization (“WIPO”), “[i]nstead of filing an application in the UK, holders who anticipate their designations of the EU will still be pending before exit day can subsequently designate the UK as soon as possible to continue benefiting from the centralized management features of the Madrid System.”[5]

Special Considerations for European Union Registered Trademarks on Brexit Day

With Brexit, there are certain issues that trademarks owners should be aware of. These issues can impact the enforcement and validity of trademarks.

  • Renewals, Priority, and Seniority

For EUTMs that are registered on the day of Brexit, the new corresponding United Kingdom trademarks will retain the same renewal date and priority date. For example, if an EUTM that’s registered and in force on the day of Brexit has a priority date of September 15, 2006, the new corresponding United Kingdom trademark will also have a priority date of September 15, 2006.

Regarding seniority, a new corresponding United Kingdom trademark will inherit the same seniority date as its EUTM counterpart. For example, if an EUTM that’s registered and in force on the day of Brexit has a seniority date of July 31, 2002, the new corresponding United Kingdom trademark will inherit the July 31, 2002, seniority date.

  • Use, Licenses, and Assignments

Trademark owners should be cautious of how and where they use their trademarks. Under the United Kingdom’s Trade Marks (Amendment etc.) (EU Exit) Regulations 2018, use of an EUTM in the European Union prior to the day of Brexit will count as use of the new corresponding United Kingdom trademark. However, trademark owners may encounter problems if they only use an EUTM in the United Kingdom. This could potentially open trademark owners up to cancellation proceedings for non-use in the European Union.

New corresponding United Kingdom trademarks will be completely independent from their EUTM counterparts in regards to licenses and assignments. This means that United Kingdom trademarks can be separately licensed and assigned from EUTMs. For example, two licensing agreements can exist for the same mark, with one agreement encompassing the European Union and the other agreement encompassing the United Kingdom. While this may lead to increased profits for trademark owners, it also requires them to enter into separate agreements, which can be both costly and timely. This also means that trademark owners may have to engage in greater enforcement and prevention efforts to avoid licensees violating their agreements’ territorial boundaries.

Conclusion

With Brexit’s “no-deal” date fast approaching, it’s important that trademark owners and applicants understand how Brexit may affect them. While Brexit will affect each trademark owner and applicant differently, knowing what preventative steps to currently take can mean the difference between adequate protection or subjecting your brand to additional fees and registration procedures, leaving it in an unfortunate state. For now, trademark owners and applicants should continue to monitor Brexit’s progress and any changes to the United Kingdom’s regulations that pertain to intellectual property.

[1]Robert S. Rigg et al., Brexit and IP: 4 Things You Should Know, The National Law Review(March 5, 2019), https://www.natlawreview.com/article/brexit-and-ip-4-things-you-should-know.

[2]Guidance: Trade marks and designs if there’s no Brexit deal, Crown (Sept. 24, 2018), https://www.gov.uk/government/publications/trade-marks-and-designs-if-theres-no-brexit-deal/trade-marks-and-designs-if-theres-no-brexit-deal.

[3]Id.

[4]Id. (misspelling in the original).

[5]United Kingdom: Draft Statutory Instrument Providing For Continued Protection in the United Kingdom to Designations of the European Union under the Madrid System in the Case of a No-Deal Brexit, World Intellectual Property Organization(March 22, 2019), https://www.wipo.int/export/sites/www/madrid/en/pdf/dis_uk_no_deal_brexit_explainer.pdf.

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