As a “no deal” Brexit becomes an increasingly realistic prospect, it is important that rights holders ensure that they have accounted for all eventualities. We examine the different scenarios for rights holders and the steps they should take to make sure rights such as European Union trade marks (“EUTMs”), Community registered designs (“CRDs”), unregistered Community designs, registered plant varieties, database rights under Directive 96/9/EC and protected geographical indications (collectively “EUIPRs”) are protected.
The EU and the UK are currently engaged in protracted negotiations regarding a Withdrawal Agreement which will set out the “arrangements” for the withdrawal of the UK from the EU (including in relation to EUIPRs). Although certain terms are still to be finalised, agreement has been reached on a number of issues. However, as things currently stand, if the entire Withdrawal Agreement cannot be agreed, there remains a possibility that the UK will leave the EU on 29 March 2019 with a “no deal”. It is therefore important for rights holders to take action now to account for this possibility.
1. Existing EUIPRs
EUTMs, CRDs and Registered Plant Varieties
The holders of EUTMs, CRDs and registered plant varieties which have been registered or granted before the end of the “transition period” (it is currently envisaged that this will start on the date of entry into force of the Agreement and end on 31 December 2020, although this may be extended) shall, without re-examination, become holders of “comparable” registered and enforceable intellectual property rights in the UK.
Any trade mark, registered design right or plant variety right which arises in the UK pursuant to this process will have the same filing date (or priority date) as the original EU right. A converted UK trade mark will have the same renewal date as the original EUTM which it was converted from. For CRDs and registered plant varieties, the term of protection under UK law will be at least equal to the remaining period of protection under EU law for the right in question.
A trade mark converted in this way will also not be vulnerable to revocation in the UK simply because it has not been put to use in the UK prior to the end of the transition period. Likewise, if a mark has acquired a reputation in the EU (but not the UK) prior to the end of the transition period, the holder of that right will be entitled to rely on the reputation existing in the EU at the end of the transition period and thereafter the continuing reputation in the UK after the end of the transition period when enforcing its rights.
If an EUTM, CRD or registered plant variety is declared invalid or revoked (or in the case of a plant variety right - declared null and void or cancelled), as the result of an administrative or judicial procedure which was on-going on the last day of the transition period, the corresponding right in the UK shall also be declared invalid or revoked (or declared null and void, or cancelled) as the case may be. The date of effect of the declaration or revocation or cancellation in the UK will be the same as in the EU. However, there is a carve out to this rule which states that the UK will not be obliged to declare the right invalid or revoke it where the grounds for invalidity or revocation do not apply in the UK.
International registrations for trade marks or designs designating the EU
The UK will “take measures” to ensure that any person who has obtained an international registration for a trade mark or a design designating the EU before the end of the transition period will also enjoy protection in the UK for such a trade mark or design. The withdrawal agreement does not specify what exactly these measures will be.
Unregistered Community Designs
The holder of an unregistered Community design pursuant to Regulation (EC) No 6/2002 which arose before the end of the transition period will become the holder of an enforceable intellectual property right in the UK which affords the same level of protection as that provided for in Regulation (EC) No 6/2002. The term of protection of that right will be at least equal to the remaining period of protection referred to in Article 11(1) of that Regulation of the corresponding unregistered Community design.
The holder of a “database right” in respect of the UK pursuant to Article 7 of Directive 96/9/EC which arose before the end of the transition period will maintain an enforceable intellectual property right in respect of the UK which will afford the same level of protection as that provided for in Directive 96/9/EC, provided that the holder of that right continues to comply with the requirements of Article 11 of the Directive. The term of protection of that right under the law of the UK shall be at least equal to the remaining period of protection referred to in Article 10 of Directive 96/9/EC
Protected Geographical Indications
No agreement has been reached yet on how these are to be protected post-Brexit. The EU wants geographical indications that are protected in the EU at the end of the transition period to be equally protected in the UK post-Brexit without re-examination. The UK has not agreed to this. Instead, it is proposing to introduce its own geographical indication system.
If the provisions of the withdrawal agreement cannot be finalised and agreed prior to 29 March 2019, it will be for the UK to unilaterally take whatever action it considers appropriate with regard to EUIPRs. It seems very likely that the UK Government will take steps to ensure that what has already been agreed as part of the Withdrawal Agreement does actually happen, regardless of whether a deal is reached. Indeed, the UK IPO has released certain “technical notices” with regard to trade marks and designs which largely mirror what is set out in the Withdrawal Agreement. However, it is not at all clear what will happen with regard to certain rights, such as protected geographical indications. It seems the UK will establish its own system of geographical indications.
2. Future EUIPRs
Where a person filed an application for a EUTM or a CRD before the end of the transition period and that application has been given a filing date, that person shall have a right to file the same application in the United Kingdom during a period of 9 months from the end of the transition period. That application will be given the same filing date/priority date as the EUTM or the CRD. It appears (although the withdrawal agreement does not specifically address this) that international applications designating the EU will be treated in the same way.
Where a person has filed an application for a Community plant variety right before the end of the transition period, that person shall have an “ad hoc” right of priority in the UK during a period of six months from the end of the transition period. The right of priority will have the effect that the date of priority of the application for the Community plant variety right counts as the date of application for a plant variety right in the UK for the purpose of determining distinctness, novelty and entitlement to the right.
If the provisions of the Withdrawal Agreement cannot be finalised and agreed prior to 29 March 2019, it will be for the UK to unilaterally take whatever action it considers appropriate with regard to future rights/applications. Again, it seems very likely that what has already been agreed in the Withdrawal Agreement will be implemented by the UK Government in any event. With regard to protected geographical indications, it seems that a new UK system will be established and that EU rights holders will have to apply for a separate registration under this system.
3. Enforcement of Rights
The UK has committed in the draft Withdrawal Agreement to ensuring that all EUTMs, CRDs, unregistered Community Designs, international registrations for trademarks and designs designating the EU, database rights and plant varieties which exist at the end of the transition period will be protected in the UK. If this is done, a right holder should then be able to enforce this new UK right before the UK courts. However, the specifics of how these rights are to be converted are yet to be ironed out.
No agreement has been reached yet on the protection of protected geographical indications in the UK. It is unclear how the UK intends to protect these rights and how they might be enforced.
Again, if the provisions of the withdrawal agreement cannot be finalised and agreed prior to 29 March 2019, it will be for the UK to unilaterally take whatever action it considers appropriate with regard to future rights/applications. The UK government has already stated, however, that it will ensure that the property rights in all existing registered EUTMS, RCDs and unregistered Community Designs will continue to be protected and to be enforceable in the UK by providing equivalent rights in the UK.
The position is less clear with regard to how database rights and protected geographical indications are to be dealt with.
Trade (exhaustion of rights)
The UK and the EU have agreed in the Withdrawal Agreement that rights conferred by an intellectual property right which were exhausted both in the Union and in the UK before the end of the transition period under the conditions provided for by EU law shall remain exhausted both in the EU and in the UK. It is not clear how the UK will deal with exhaustion of rights after the end of the transition period. No announcement has been made on this yet.
The current EU model allows for goods placed on the market in the EEA with the right holder’s consent to be resold elsewhere in the EEA, unless “legitimate reasons” exist for this not to be done. Often issues of exhaustion arise where goods are repackaged for sale elsewhere in the EEA but they can also arise where e.g. very expensive luxury goods (e.g. perfumes) are bought at very low prices somewhere in the EEA and sold elsewhere in the EEA where the goods are more expensive.
If the UK opts for an “international exhaustion of rights” model, then goods put on the market anywhere in the world with the consent of the right holder could be lawfully re-sold in the UK. However, if it opts for a “national exhaustion” model, then goods placed on the market with the consent of the right holder outside the UK could not be re-sold in the UK. This approach would be significantly more favourable to IP holders but may be viewed as damaging to global trade.
If no deal is reached with the EU, the UK will have to make a decision as to how to deal with exhaustion of rights as of 29 March 2019. The UK has released a technical notice which states that it “will continue to recognise the EEA regional exhaustion regime from exit day to provide continuity in the immediate term for businesses and consumers”. However, it has specified that goods which have been placed on the market in the UK by the rights holder or with their consent, may not necessarily be considered exhausted (and thus re-sold) in the EEA without the right holder’s consent.
4. Protecting your portfolio
At present, both the UK and the EU appear to be operating on an “all or nothing” basis with regard to the Withdrawal Agreement. That is to say, either everything is agreed in the Agreement or nothing is agreed. However, this may change if consensus cannot be reached on the entirety of the Agreement. If there is no deal, the UK will take whatever action it considers appropriate in the circumstances. Although the protection of EUIPRs has not, to date, proved a particularly contentious issue and some comfort can be taken from the technical notices issued by the UK government, it would be prudent for rights holders to review their portfolios and identify which rights they may wish to apply for separately in the UK.
For example, rights holders should consider:
- Filing separate UK applications for trade marks currently registered as EUTMs or International registrations designating the EU which are used in the UK.
- Filing separate UK applications when filing any new application for an EUTM or International registration designating the EU
- Filing a separate UK design right application at the same time as filing an application elsewhere (note that novelty may be destroyed if an application is disclosed more than 12 months prior to an application being made)
- Reviewing existing agreements to ensure that they will continue to apply to UK marks post-Brexit. In particular, references to EUTMs and CRDs should be reviewed and, if possible, amended to also refer to UK rights.