Intellectual property considerations in light of Brexit
If The Queen described 1992 as an annus horribilis, one wonders what Her Majesty has made of this year thus far. 2020 can certainly be described as a horrible year for many reasons, largely due to the COVID-19 pandemic and its rippling effect on just about everyone and everything. The virus has also provided a distraction from another major issue that had caused turmoil and uncertainty in recent years: Brexit.
As the end of 2020 fast approaches, one’s mind now turns back to the implications of Brexit. This article seeks to cover the key changes to Intellectual Property for UK and EU rights holders as a result of Brexit, what this means for your business and how you can prepare for these changes now.
Where are we now?
By way of a brief background, and as most of you are probably aware, following a UK wide referendum in 2016 the British government formally announced the country’s withdrawal from the European Union in an absolutely resounding 52% to 48% victory for Vote Leave.
After years of wrangling the European Union (Withdrawal Agreement) Act was agreed by the UK and EU, and implemented on 31 January 2020, also known as ‘Exit Day’. This Act allowed for a ‘transition period’ for the UK and EU to establish their future trading relationship and security co-operation, as well as allowing the UK to establish new laws. For the duration of this year, the UK is still subject to EU law; however, this ends on 31 December 2020 (IP Completion Day). Most changes to the current intellectual property procedures between the UK and EU will take effect from the IP Completion Day.
This does not give brand owners or their representatives much time to plan before changes are implemented, but we will attempt to provide some tips on what you should be doing now.
It is worth pointing out that both the UK and EU Intellectual Property Offices have committed to ensuring as little disruption as possible to UK and EU rights holders. However, proof will be in the pudding and, call us cynical, but post-Brexit talks remain a game of chicken, and no one wishes to blink. Certainly, everyone has bigger problems at this moment in time as they respond to a global pandemic, leaving drastically less political focus to force through a compromise and avoid a no-deal crash.
Luckily, much of EU and UK law and the general procedures and protocols has converged over the years (and this can be said of trade mark law in particular). This will certainly help the transition to separate UK and EU rights post-Brexit.
That said, it is still worth having an IP lawyer or attorney look at your IP portfolio to identify what will change, and if any action needs to be taken (and more on that later).
This article will mainly cover trade marks but it will also consider designs, copyright and patents. In addition, we will address the changes to ‘.eu’ domain names (as a subset of IP) as key changes will also apply to such domains as a result of Brexit.
In terms of UK and EU IP, trade marks (and designs, as discussed further below) will be subject to the most significant changes in 2021. Thankfully, we already know that any EU trade mark (EUTM) or international mark designating the EU that has either “registered” or “protected” status on or before 31 December 2020 will be automatically cloned to the UK trade marks register, and an identical ‘comparable right’ will be created with no additional charges or examination procedure.
The comparable right will obtain the same filing date/priority/seniority dates as the EUTM, and will be completely independent of the EUTM. This means that the UK comparable mark will have a separate renewal date (and incur additional fees). Consequently, brand owners and their representatives should make a note of these new renewal dates. In addition, watch out for renewal dates nearing the end of the transition period as we are aware that the UKIPO is under the cosh (to say the least) and may not have time to notify you.
The surge of newly created UKTMs as comparable rights for EUTMS will mean that anyone wishing to apply for a UK trade mark in the couple of months prior to IP Completion Day should take into account any similar registered EUTMs, as they will soon receive a UK comparable mark. The same also applies for EUTMs that have recently expired, as it is possible to reinstate an EUTM that is still within the 6-month grace period for renewal.
There is an option to ‘opt out’ of receiving a comparable UK mark if, for whatever reason the owner does not wish to have rights in the UK for a particular EUTM, which can only be applied for after 1 January 2021. A reason for opting out may be, for example, a co-existence agreement that does not allow one of the parties to exercise any rights in a brand within the UK. A template notice written by the UKIPO will be available on their website next year.
If an EUTM application is still pending by 31 December 2020, an automatic corresponding mark will not be created in the UK register, which means a separate UK trade mark application will need to be made. This means an independent examination will take place the opposition period will apply and normal UK application fees will be applicable.
For this reason, it is advisable that if you are considering making an EUTM application, apply as soon as possible so that it has a chance of proceeding through to registration prior to the IP Completion Day. We would suggest that the latest deadline is the end of August/beginning of September.
In order to benefit from the same filing date, priority and/or seniority dates as the identical EU mark (regardless of whether that EU mark was the first filing of that particular trade mark), the UK application would need to be made within nine months of 1 January 2021 (also known as the “special priority period”). These rules also apply to international trade mark applications designating the EU.
In light of this, the UKIPO are going to be dealing with a high number of applications. Therefore if you are considering applying for a trade mark it may be worth getting it in before the beginning of next year in order to avoid delay.
Turning our minds now to oppositions and cancellations of trade marks, there are some key changes as a result of Brexit.
There are two types of grounds possible when making an opposition claim in the UK and EU:
- Absolute grounds: For example, the mark was applied for in bad faith or lacks distinctive character; and
- Relative grounds: Based on earlier rights. Both invalidity and revocation claims can be made on the basis of earlier rights, also.
Proving that an earlier right is being ‘used’ is crucial in opposition and cancellation proceedings. In both the UK and EU, ‘use’ must be more than just ‘token use’, i.e. the mark must be clearly and substantially used in the course of trade thus demonstrating reputation in the trade mark.
Unsurprisingly, these grounds will not change at all after Brexit.
The type of relative grounds that can be relied upon, however, will be affected.
Before the IP Completion Day, UK rights holders can oppose or make a cancellation claim against an EUTM based on their earlier rights if their earlier right was only used in the UK. After 31 December 2020, oppositions based solely on UK use will only be possible if the use was acquired before this date. If the ‘proof of use’ was acquired after 31 December 2020, it cannot be relied on to oppose an EUTM application as its use is no longer in the EU.
Potential opponents may therefore want to weigh up the merits of making an EU opposition now as its outcome may be affected by Brexit. It is also likely that pending EUTM opposition and cancellation actions will be suspended if a decision has not been reached by the end of the transition period, if the earlier right relied upon exhibits only UK-based use and/or reputation.
It is not quite the same if proprietors of EU rights want to make an opposition or cancellation claim against a UK trade mark, as the comparative right will be active and therefore can be used as the basis. For the first 5 years of this comparative mark’s life, use in the EU acquired before 31 December 2020 (including the UK) is valid. After this, the comparative right will need to have been used in the UK in order to oppose an identical or similar mark based on this right. It will also be subject to non-use revocation if one cannot demonstrate use in the UK after 5 years.
Brand owners making applications in either jurisdiction now should consider the future of their trade mark in order to avoid disappointment.
Licences and security interests
Another thing to bear in mind is that any existing recordals of licences and/or security interests/assignments will not automatically transfer to the UK comparable right, so brand owners or representatives will need to ensure that they record these manually (if applicable). Helpfully, the period for which these can be recorded on a UK comparable right without any implications to the mark’s protection has been extended to 12 months, from the usual 6-month period.
In terms of current design rights in the UK and EU, the majority of changes reflect those changes that will be made to trade mark rights, starting with the fact that 31 December 2020 is the date on which these changes will take effect.
Currently, in the EU registered designs are called ‘Registered Community Designs’ and, predictably, unregistered design rights are called ‘Unregistered Community Design Rights’. In the UK, registered designs are simply called ‘UK Registered Designs’ and unregistered rights are ‘UK Unregistered Design Rights’.
As with trade marks, after 31 December 2020 Registered Community Designs or International EU designs will not cover the UK. To fill the gap of protection that this would lead to, the UKIPO are creating ‘re-registered designs’ for every design right currently protected in the EU.
Again, like the trade mark process they will be automatically created, will not attract extra fees and the filing and priority dates will be preserved in the re-registered design.
Pending EU Designs
Pending design rights in the EU will not receive an automatic right and will have to go through a separate application process in the UK, with the normal UKIPO fees and examination procedure. This also applies if an EU design is on ‘deferred publication’ (i.e. the proprietor has opted to delay the design’s publication date in circumstances where the design has not been exhibited yet and wish to keep the design a secret). Therefore, it may be worth publishing the design before 31 December 2020 in order to receive an automatic UK equivalent right.
As with trade marks, there will be a 9 month period after 31 December 2020 within which you can claim the filing date and priority date if applicable.
Copyright law (you will be glad to hear) does not follow the same pattern as trade mark or design rights in relation to Brexit. Copyright is mostly a matter of domestic law, so it will be largely unaffected by Brexit. Fortunately, EU and UK copyright law is also largely harmonised.
Time will tell as to whether the UK will diverge away from EU law in terms of copyright, but currently there are no indications that this will be the case in the short-term.
Patents will also see fewer changes as a result of Brexit than trade marks and designs. This is because the European Patent Convention, which oversees the examination and grant of European Patent applications and established the European Patent Office, is independent of the European Union, and the UK will continue to be a contracting state (alongside all other EU countries). UK national patents will also be unaffected.
Like copyright, the legislation governing the grant of supplementary protection certificates (for example, for pharmaceutical products and agrochemicals in the UK) may be amended in the long term; however, any changes will likely be small and come into effect over a longer period of time.
The existing patent litigation system will also remain the same. The most significant change is that the UK has announced its withdrawal from the Unified Patent Court, which was intended to hear cases and hold exclusive competence in respect of European patents (including the UK). With the UK backing out, this will no longer be the case and further developments are yet to be announced in this respect.
Despite not being a category of IP in itself, we feel it necessary to mention domain names as it will impact on a large number of businesses.
Currently, British citizens, residents and/or businesses with a commercial establishment in the UK (which is during the Transition Period is still being treated as a part of the EU for this purpose) are able to hold a .eu domain name.
At the end of this year, this will of course change so that holders of .eu domain names will have to be EU citizens, residents and/or have a commercial establishment. As of 1 January next year, UK registrants will no longer be able to register for a .eu domain name if they do not meet any of this criteria.
And, as from 1 October 2020, EURid (the registry manager of .eu domains) will be contacting UK registrants to advise that their domain name will be released for sale on 1 January 2022, if they cannot satisfy the requirements of a .eu domain name registrant.
If this applies to you, you may want to think about transferring your website and its contents to a generic TLD rather than a geographical one now (for example .co.uk, .com etc.) to ensure nothing is lost and that you have enough time to do it smoothly.
There is another option whereby EU- based companies are offering a proxy service whereby they hold the domain name on trust for the UK business, in return for fees. Time will tell whether the EU will clamp down on this practice.
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 as follows:
- Undergo a review of your brand portfolio 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 are 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 you have any questions or require assistance please contact Zane Shihab.