Brexit: Implications for Intellectual Property
The UK left the European Union (EU) at 11 PM on 31st January 2020. At this point, we entered a transition period which has effectively meant business as usual for IP matters during the course of 2020.
The transition period came to an end at 11PM on 31st December 2020. Mechanisms have been put in place which should ensure that IP rights continue to be protected going forward. Trade marks and designs are the IP rights most affected, but there will be an impact on other IP rights as well.
Trade Marks - Significant Impact post Brexit
At the end of the transition period, the UK will no longer automatically be covered by EU trade marks. All EU trade mark registrations existing at the end of the transition period will automatically be mirrored to become comparable UK national registrations. Therefore, if you own 10 EU trade mark registrations at the end of the transition period, on the day after you will own 10 comparable UK trade mark registrations and 10 EUTM registrations covering the remaining 27 member states of the EU. The UK registrations will retain the original filing, priority and UK seniority dates and the first renewal dates will be the same as the original EU registration (although if an EUTM is due for renewal after the transition period has ended, and is renewed early during the transition period, the comparable UK registration will need to be renewed separately once it comes into existence). The creation of the comparable UK trade mark registration will be carried out free of charge. The new UK trade mark registration will not initially be liable to revocation for non-use on the ground that the corresponding EU trade mark had not been put to genuine use in the UK (use in the EU prior to the end of the transition period will count as use of the comparable UK right). Comparable UK marks will also benefit from reputation acquired in the EU before the end of the transition period (but this will diminish over time). Licences and security interest will generally be deemed to apply to the comparable UK mark but will not appear on the register automatically.
International registrations designating the EU that have been protected before the end of the transition period will also continue to be protected in the UK as a comparable mark. However, this registration will exist separately to the International Registration that it stems from.
Pending EU trade mark applications will not be mirrored automatically and will need to be refiled within a period of 9 months from the end of the transition period in order to apply for a comparable UK trade mark retaining the filing, priority and UK seniority dates of the pending EUTM. The usual UK fees will be required. The same will apply for International Registrations that are not yet protected.
New EUTM filings after the transition period will not extend to the UK (they will be limited to the remaining 27 EU member states). Trade mark owners will need to seek national protection in the UK for their trade marks. Application through the Madrid Protocol will still be available for International Registrations designating the UK.
After the transition period, the UK court system will no longer have EU trade mark courts. EU trade mark holders will not be able to enforce them in the UK and obtain pan-EU injunctions under the EUTM Regulation. UK courts will continue to accept jurisdiction over proceedings ongoing at the end of the transition period relating to EUTMs and will continue to apply the provisions of the EUTM Regulation to such proceedings. However, it appears that remedies may only apply to the comparable UK mark as there is some uncertainty as to whether such orders should have any effect in the EU. UK Courts will, of course, have jurisdiction over infringement of UK trade marks.
The UK Government has stated that where an injunction in place at 1 January 2021 prohibits actions in the UK which would infringe an existing EUTM, the terms of that injunction will be treated as if they also apply to the comparable UK trade mark (subject to an order of the court to the contrary). Pan-EU injunctions issued by UK courts (sitting as EU Courts) prior to the end of the transition period should also be recognised (but may also be subject to contrary orders of an EU court).
UK trade mark laws may develop independently over time and diverge from EU trade mark laws. CJEU decisions will not be binding but are likely to be persuasive. However, the UK government has already implemented the new Trade Marks Directive (in line with the already in force new EUTMR).
Designs – Significant Impact post Brexit
Existing Registered Community Designs (“RCDs”) will also be mirrored in the same way as EU trade mark registrations to become re-registered designs, but again pending applications will need to be refiled. After the end of the transition period, designers will need to seek national protection in the UK for designs in addition to RCD protection in the EU. Cloning rights are also provided for in relation to existing Unregistered Community Design Rights (“UCDRs”) which will continue to be protected for the remainder of their three year term as continuing unregistered designs.
The UK government has now ratified the Hague Agreement which means that design owners will be able to take advantage of the centralised process for international design registration.
Current UK unregistered design right does not provide the same protection as UCDR e.g. surface decoration is not covered. However, from 1 January 2021, a supplementary unregistered design will be available which will confer similar protection to the UCDR but for the UK only. This is significant for short life designs, e.g. fashion, where the informal three year protection without registration provides valuable temporary protection from copying. First disclosure will need to take place in the UK and not the EU in order for UK protection to arise. Similarly first disclosure in the UK will not lead to protection as an UCDR. Complexities may well arise as to whether first disclosure in another jurisdiction has destroyed novelty.
Patents – Potential Significant Impact on Unified Patent Court and Unitary European Patent Regime post Brexit
Current European Patent Regime: It is important to note that the UK’s exit from the EU will not affect the current European Patent system, which is governed by the European Patent Convention. Businesses can continue to apply to the European Patent Office for patent protection which will include the UK. Existing European Patents covering the UK are also unaffected and European patent attorneys based in the UK will continue to be able to represent applicants before the EPO.
Supplementary Protection Certificates: During the transition period, businesses can continue to apply for and be granted SPCs using the current system. From 1 January 2021 SPCs can continue to be applied for through the UKIPO.
Unified Patent Court / Unitary European Patent: The UK Government has now confirmed its withdrawal from the Unified Patent Court system. Whether the project will go ahead without the UK remains to be seen.
Other IP – Lower Impact post Brexit
Copyright: No significant changes at the end of the transition period as copyright law is largely national (although based on several EU directives and regulations). There is likely to be an impact on some cross border issues once the UK is not subject to EU laws and/or following some divergence of UK and EU laws.
Databases: Sui generis database right is implemented in the UK by regulation but qualification for database right is by reference to membership of the EEA. The UK and the EU have agreed that the holder of a database right in respect of the UK which arose before the end of the transition period shall maintain an enforceable right affording the same level of protection and for an equivalent remaining term. There will be a new database right applicable to UK citizens following the transition period.
eu domains: UK registrants will be unable to register new .eu domains as from 1 January 2021. Existing domains will be withdrawn (and after 12 months revoked) unless UK registrants update their registration data before 31 December 2020 to indicate a legally established entity in the EU or updating their residence to an EU member state. Pan UK/ EU business will therefore still be able to register .eu domains though an EU based subsidiary.
Portfolio management: Review filing / brand protection strategies now. Consider filing UK national applications in addition to EUTMs and renew UK TMs rather than allowing them to lapse because seniority has been claimed. Try to speed up pending applications where possible. Consider potential non - use of EUTMs (although use in the UK prior to 1 January 2021 will be taken into account, the significance of that use will progressively decrease). Also be aware that evidence relating to the UK will no longer contribute to the protection of an EUTM (for example proving reputation) as from 1 January 2021 even if that evidence predates 1 January 2021. Consider the need to file EUTMs if the need for future protection in the EU is anticipated. Opting out of owning a comparable UK right is also an option that may need to be considered in certain circumstances.
Representation: During the transition period, UK legal representatives will continue to have the right to represent clients before the EU Intellectual Property Office (EUIPO). The Withdrawal Agreement ensures that UK legal representatives can continue to represent their clients before the EUIPO in cases that are ongoing at the end of the transition period.
Once the transitional provisions come to an end, it will continue to be business as usual for Charles Russell Speechlys as we will conduct our EU trade mark work with the assistance of our colleagues in our Luxembourg office. Your IP matters will continue to be strategically managed by your existing contacts.
In respect of any new proceedings before the UKIPO, from 1 January 2021 an address for service in the UK, Gibraltar or the Channel Islands will be required.
Enforcement: Consider your litigation strategy before the end of the transition period to obtain the most effective remedies in the long term. Anti-counterfeiting programmes may also need to be reviewed, particularly the filing of customs notifications in the EU and UK.
Commercial agreements: Consider the potential impact of Brexit on various clauses such as territory, force majeure, material adverse change, governing law and jurisdiction. Any references to EU legislation will need to be considered.
Exhaustion: IP rights in goods placed on the UK market by, or with the consent of the right holder after the transition period may no longer be considered exhausted in the EEA so permission may be needed from the right holder. In the short term, IP rights in goods placed on the EEA market by, or with the consent of the right holder after the transition period will continue to be considered exhausted in the UK. There will be a consultation in the early part of 2021 on the UK’s long term position on exhaustion.
IP and transactions: Consider the impact of Brexit on due diligence, licences, assignments and security over IP. Consider the need to record existing licences and security interests against comparable UK trade marks. The negative effects of failure to record the licence or interest will be suspended until 12 months from the end of the transition period.
eu domains: Commence plans to transfer ownership of these to an EU based subsidiary.
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