News Update

BrexIP: What you need to know

For reference, the UK and EU27 concluded the withdrawal agreement on 31 January 2020 and the UK left the EU (Exit Day).

The UK have now entered the post-Brexit Transition Period (Transition Period), essentially meaning that most EU law will still apply in the UK until 31 December 2020 (the end of the Transition Period).

It’s the start of a new decade, and the time to make new year resolutions. Why not make one of them to consider how your intellectual property rights may be affected by Brexit?

We know; it probably isn’t high on your list of priorities. Nevertheless, Brexit will impact your intellectual property rights across the UK and EU, which in turn may affect your business. If you have not yet considered this, now is the time. This article sets out some of the changes to UK and EU intellectual property rights that may apply to you.

The term ‘intellectual property’ describes intangible property rights which are a result of intellectual effort and includes trade marks, design rights and copyright (all of which are discussed in this article). Protection of intellectual property, whether arising automatically or requiring registration, transforms intangible property into tangible value.

Trade marks

Every brand’s aim is to successfully communicate to its target market what they sell and/or provide, and to clearly convey that its products/services derive from this brand and no other.

Trade marks are just one way of doing this. Put simply, trade marks are signs that are used to represent your brand and its products/services on offer. They can be a mixture of words, designs, letters, numerals, colours, sounds or the shape of goods or their packaging. The main criteria are that it should be distinctive and capable of identifying the commercial origin of your products/services, as well as distinguishing your goods or services from others.

There are many advantages to registering a trade mark. A few of the most notable are:

• It provides a clear, defined and identifiable right to rely on. This makes it an easier right to rely on when challenging another mark and where your mark is being challenged.
• It strengthens a brand’s credibility with the public if they know the brand benefits from registered marks. This in turn adds value to the brand.
• Registered rights are also paramount when you are seeking to exploit your IP via assignments and licensing.
• It provides a stronger legal position to the proprietor, for example in circumstances where a third party may be infringing your mark.

Currently, trade marks registered under the EU are granted protection within all of its 28 EU member states, including the UK.

After the Transition Period, a registered EU trade mark (EUTM) will no longer provide protection within the UK. One of the most important factors for EU trade mark holders, then, is how UK protection will be retained under existing EUTMs. Thankfully, one of the few certainties that has arisen from Brexit is that a new UK trade mark (UKTM) will be automatically created as a comparable UK right for every currently registered EUTM. Therefore, owners of EUTMs will not have to take any immediate action to ensure that their mark remains protected in the UK and will not need to pay any registration fees for such conversion. This also applies to International Trade Mark Registrations with an EU designation. The new UKTM will:

• Join the UK register without going through the formal UK registration process.
• Be identical to the EUTM, but entirely independent (meaning it can be independently challenged, assigned, licensed or renewed separately).
• Have the same legal status as if you had applied for and registered it under the UK trade mark regime.
• Will keep the same filing date as the EUTM. This latter point is clearly beneficial to trade mark holders, as the length of time in which the trade mark provided protection will not be reduced as a result of Brexit and any prior rights will not be compromised.

However, when the UKTM is due for renewal (i.e. 10 years from the initial EUTM filing date), the proprietor will need to ensure that the mark is renewed separately in both the EU and UK at that time. This will result in additional fees, as payments of the related renewal fees will need to be made to both the UK’s Intellectual Property Office (UKIPO) and the European Union Intellectual Property Office (EUIPO).

If you, as an owner, do not wish for an automatic comparable UK right to be created, you have the option to ‘opt out’. This is a useful option if your trade mark doesn’t require protection in the UK, or you already own an identical mark in the UK and therefore it is already protected. In the latter scenario, opting out would prevent duplication of trade marks in the UK trade mark register and would avoid the problem of having two renewal dates/fees to pay. Thirdly, holding two identical trade marks in the UK register could cause confusion as to filing dates and prior rights, which could affect the commencement of infringement proceedings based on your mark.

In cases where you have a pending EUTM at the end of the Transition Period, a comparable UK trade mark will not automatically be created. If you wish to register an identical UK trade mark, it is still possible to do so while retaining the original filing date of the pending EUTM, but you will need to file a separate UK trade mark application within 9 months after the Transition Period. The mark will then go through its own registration process in the UKIPO, including being independently examined.

There is currently less guidance on how opposition and cancellation proceedings between the UK and EU will be affected. Notwithstanding this, it is almost certain that it will no longer be possible to file opposition or cancellation proceedings against a EUTM on the sole basis of a UKTM registration. The same rationale applies vice versa; a EUTM or a trade mark registered in a member state will not be able to be used as a basis to oppose a future UK application.

Furthermore, any pending opposition/cancellation proceedings based solely on UK rights will be dismissed by the EUIPO if the proceedings are still pending by the end of the Transition Period. Interestingly, however, the UKIPO has agreed to continue with any pending opposition/cancellation proceedings in their jurisdiction after the Transition Period, even if the grounds are based solely on an EUTM or national member-state mark.

The effects of Brexit on opposition and cancellation proceedings can be either advantageous or disadvantageous to you. If you are the holder of a UKTM, it is likely that this means that no opposition or cancellation proceedings can be brought by a member of the EU if they wish to oppose after the Transition Period, so ultimately this is good news (unless a comparable right in the UK is created, which could be the basis of opposition going forward).

However, your rights in terms of challenging a future EU or member-state’s application or registration, based on your UKTM alone, are taken away as a result of Brexit.

In any event, if you are thinking of opposing or cancelling a trade mark in the UK or EU, it is advisable to:

• Commence proceedings as soon as possible so there is a better chance of resolving matters before the end of the Transition Period.
• Rely on a registered trade mark that is in the same jurisdiction as any future opposition/cancellation proceedings (e.g. an EUTM in an EU opposition/cancellation), and rely on a mix of use/reputation obtained from both the UK and EU for evidence purposes.

In light of the above, we would advise registering a trade mark in the EU if it is likely that it will be used in the EU, so that any future infringing EUTMs can be opposed/cancelled on the basis of your EUTM.

Design Rights

It is important to remember that design rights provide protection for the appearance of a product rather than the product itself. A design is defined as the shape or configuration (internal or external) of the whole or part of an article. It can consist of lines, shapes, textures and material, colours, contours or ornamentation of a product, and can be two or three-dimensional.

Design rights can either be registered (obtained after a formal application process) or unregistered (an automatic right). A registered design equips its owner with stronger and longer legal protection than an unregistered mark (25 years compared to 10 or 15 years in the UK and 3 years in the EU).

The features necessary in order to be able to register a design are similar across the UK and EU jurisdictions. The common requirements are that a design must:

• Be original. This means that an identical design should not be commonplace/be available to the public at the time of registering.
• Have individual character. In other words, it must be a unique design.
• Be capable of being graphically represented.
• Not exist for the purpose of the product’s function.

European designs are known as either a ‘Registered Community Design’ (RCD) if it has been registered in the EU or an ‘Unregistered Community Design’ (UCD).

After the Transition Period, RCDs and UCDs will no longer provide protection in the UK.

Helpfully however, and similarly to trade marks:

• Holders of RCDs registered before the end of the Transition Period will become holders of comparable registered design rights in the UK. These rights will be known as a ‘re-registered design’.
• The re-registered design will be given the same filing date as the applicable RCD and no fees will be payable to obtain it.

Any new UK design will need to be renewed in the UK separately to that of the RCD, with normal UKIPO fees applicable.

Also, like trade marks, any EU design application pending at the time of the expiry of the Transition Period will need to be filed as a separate application in the UK. The same filing date as the RCD can be granted if the UK comparable design is registered within 9 months after the Transition Period. If an application is made after the expiry of this window, it will not benefit from the earlier filing date of the RCD and its rights in the UK will be limited to the date from which the application is accepted by the UKIPO.

In terms of UCDs, according to ‘The Designs and International Trade Marks (Amendment etc.) (EU Exit) Regulations 2019’, UCDs that existed before Exit Day will continue to be protected and enforceable in the UK for the remaining period of protection of the right.

In addition, a new law in the UK will create an extra ‘supplementary unregistered design right’ which will mirror the characteristics of the UCD. This means any designs that are disclosed to the public after the Transition Period should be protected in the UK under the current terms of the UCD.

Copyright

Copyright under English law is an unregistered right that protects the expression of an idea, not the idea itself. It arises automatically upon creation and prohibits anyone from copying or reproducing the work.

In the UK, the duration of copyright depends on the type of work protected:

Happily, copyright law will remain pretty unscathed in the aftermath of Brexit. This is because the UK will still remain a member of international treaties relating to copyright despite its exit from the EU. In addition, the UK Government will implement EU regulations and directives into UK law.

This means that UK copyright works such as books, films and music will still be protected in the UK and the EU. Similarly, EU copyright works will continue to be protected in the UK, regardless of whether they existed before Brexit or created afterwards.

The UK will, of course, start to develop its own copyright law over time, which may cause divergencies between the UK and EU legal systems, thus causing significant variations to copyright law in the UK.

Domain Names

The evolution of the Internet means that selecting a domain name (the unique electronic address to access a website) has become an important task. A domain name must be unique and ideally, it should be representative of the brand it is linked to. On top of that, the catchier the domain name, the better.

There is a growing amount of common law that we rely on to help define the scope of domain name rights. In effect, domain names can be interpreted as another thread of intellectual property due to their inherent nature.

In addition, in recent years a number of cases have been heard regarding domain name infringement across the world. Domain name infringement occurs when another party holds a prior right that is deemed identical or confusingly similar to the domain name in question. A prior right can be a company name, trading name or a registered trade mark. In practice, the holder of the prior right is able to demand that certain measures are taken (e.g. desist using the domain name, assignment etc).

At the time of writing this article, the UK government has issued a notice setting out the changes that will take effect on .eu domain names if the UK leaves the EU without a deal, but no notice has been issued for a deal scenario. Whilst it is far from certain, it remains likely that the changes set out within its ‘no deal’ notice will apply whether the UK leaves the EU with a deal or not. The notable changes are:

• After the Transition Period, non-EU citizens or persons living outside of the EU, nor businesses or organisations established outside of the EU, will be able to register or renew .eu domain names, unless they satisfy any of the following criteria: i) are an EU citizen independent of your place of residence ii) are a natural person who is not an EU citizen and who is a resident of a Member State iii) own an undertaking that is established in the EU, or iv) own an organisation that is established in the EU, without prejudice to the application of national law.
• Crucially, any .eu domain names currently on the register will be subject to revocation if a holder no longer fulfils the eligibility criteria for ownership (as set out above).
• If you do already own a .eu domain name but do not fit the criteria to hold one after the Transition Period, we advise renewing these before 31 December 2020 to give you time to register an equivalent UK domain and move your content across. The sooner you do this, the better chances you will have of securing the domain name you want.
• It is currently believed that UK persons and businesses will not be able to make a bad faith or infringement argument in the EU based solely upon their rights based in the UK (e.g. a registered UKTM or registered company name). If for example you hold a UKTM for your company name, you will not be able to bring infringing proceedings on a .eu domain solely on the basis that it includes your company’s name.

Agreements

It is also important for IP rights’ holders to consider any licence agreements, sponsorship agreements, IP focused commercial agreements and co-existence agreements relating to your IP, as they may need to be updated to factor in changes in the law and the scope of protection. It is yet to be determined, for instance, whether UKTMs that have been created as a comparable right of an EUTM will automatically be included in an existing licence that refers to the EUTM. It’s also a good idea to check whether there are any references to the EU as a single market (including the UK) and if the exclusion of the UK will affect any territorial-related provisions within your agreements.

Take Action Now!

Given the significant changes that Brexit will bring and the number of uncertainties that still and will continue to prevail, we recommend that you consider the potential impact it will have on your brand sooner rather than later. Our top tips on action going forward are:

• Draw up a checklist of all the intellectual property you and/or your business holds, and consider how each type may be affected by Brexit.
• If you hold a EUTM or RCD and you want an equivalent UK right, make sure it does not expire before the end of the Transition Period. Once the comparable UKTM/design right is created, it is a good idea to note its new registration number and additional renewal date.
• If you manufacture, trade or sell products/services in the EU, consider registering your trade mark in the EU. This will strengthen your legal position within the EU going forward.
• Consider how your domain name might be affected. You will need to make alternative arrangements if you hold a .eu domain name and don’t reside or have a business in the EU. Additionally, remember that there may be an influx of new UK domain names after Brexit, so it is important to watch out for potentially infringing domain names.
• Review all agreements to which your business is a party to, to ensure that there are necessary clauses and provisions in place that prevent the agreement from being negatively impacted by Brexit.
• If you think your agreement may be affected, seek legal advice to double check the position.

If there is anything we can do to help you ensure your rights are protected, or if you would like to talk about your intellectual property more generally please just let us know! You can contact one of our IP team members below.