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How will Brexit affect IP in the UK?

Jennifer Good of HGF analyses the effect Brexit will have on IP in the UK, examining what has already been agreed and areas in which more clarity is needed

A year on from the triggering of Article 50, we now have a better idea of how intellectual property rights will be affected by the UK's decision to leave the EU.

On March 19 2018, the European Commission issued the Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community. This draft indicates which terms have been agreed by the parties and are only subject to technical legal revisions; the terms where the policy has been agreed but the wording and clarification is still subject to change; and proposals made by the Union which are still subject to discussions and agreement.

The relevant date to note for IP rights has now been confirmed as the end of an agreed transition period, namely December 31 2020. The transition period will allow a further 21 months from when the UK is expected to leave the EU on March 29 2019, before any real change is noticed by IP right holders. Key provisions of the draft agreement relating to IP are discussed below.

What has been agreed so far?

EU trade marks (EUTMs), registered Community designs and Community plant variety rights which are registered or granted before the end of the transition period (EU rights) will automatically be re-registered in the UK. As the intention to grant automatic UK rights from existing EUTM registrations has been confirmed, applicants and advisors can be comforted that dual filing in both the UK and EU is not currently necessary. Some applicants with a particular interest in the UK may choose to dual file anyway, due to the remarkably swift registration procedure offered by the UKIPO, but automatic re-registration is good news for those with a limited IP budget.

The owners of any EUTM or Community design applications which are still pending at the end of the transition period will have an additional nine months after the end of this period to file an application in the UK claiming priority. Owners of Community plant variety applications also pending at the end of the transition period will be allowed six months to re-file in the UK. The applications filed during these additional priority periods will have the same filing, and where applicable date of convention priority, as the parent EU right. For applicants who have chosen not to dual file, these additional priority periods will allow further time to consider whether a UK application is required.

The filing date of the newly created UK right will be the same as the filing or priority date of the parent EU right, or if appropriate for EUTMs, the date of seniority claimed from a UK trade mark registration. One of the initial questions asked by UK clients following the referendum concerned seniority, where trade mark owners had allowed a large number of their old UK registrations to lapse following successful seniority claims. Confirmation that the new UK re-registrations will enjoy the date of seniority of lapsed UK registrations gives reassurance that these owners are in no worse a position than if they had maintained their UK registrations alongside their EUTMs.

The transition period will allow a further 21 months from when the UK is expected to leave the EU on March 29 2019, before any real change is noticed by IP right holders

UK trade mark re-registrations will not be subject to revocation proceedings on the ground that they have not been used in the United Kingdom before the end of the transition period.

Although the draft agreement is silent on what will become the date of registration (from which the non-use period commences) for these UK re-registrations, the inclusion of the above provision suggests that the effective date of registration will be the same as the parent EUTM, and not when it becomes re-registered in the UK at the end of the transition period. This provision protects UK re-registrations of EUTMs which have been put to genuine use elsewhere in the EU from being immediately vulnerable to challenge. However, where the parent EUTM was more than five years old at the end of the transition period and not put to genuine use anywhere in the EU, then both the EUTM and UK re-registration should be challengeable.

For UK opposition proceedings where it is necessary for parties to prove that registrations which are more than five years old have been put to genuine use, it is likely that these new UK rights can be validated by the use of the parent EUTM in any member state prior to December 31 2020, subject of course to the requirement that such use be genuine and sufficient for the purpose of validating the EUTM registration.

UK re-registrations of EU rights will first be due for renewal on the next renewal date of the corresponding EU parent right. The decision to allow all EU rights to become automatically re-registered in the UK will result in the UK registers remaining cluttered with rights owned by proprietors with no interest in the UK market. However, the registers should naturally become de-cluttered in time without the need for revocation procedures, as proprietors decide not to renew their UK re-registrations.

Where any registered EU rights are cancelled or revoked as a result of administrative or judicial procedures which were ongoing at the end of the transition period, the corresponding UK re-registration will be affected to the same extent, unless the ground for cancellation does not apply to the UK. For example, if an application for invalidation has been filed against an EUTM registration on the basis of a prior German trade mark registration, even if the invalidation is successful, the UK re-registration can remain in place as the ground for cancellation does not apply to the UK. This means that owners of cancelled EUTMs will not have to completely re-file in the UK, since conversion will no longer be available in the UK after we exit the EU.

Agreement has been reached to provide the owners of unregistered Community design (UCD) rights which arose before the end of the transition period with equivalent protection in the UK.

This provision specifically mentions that the UK right will afford the same protection as that provided by the UCD under Regulation (EC) No 6/2002. Whilst UK law does already provide for an unregistered design right, the scope of protection is different to that of the UCD. Current UK law is therefore not suitable and will have to be re-drafted in order to comply with this provision.

For UK right holders who have interests throughout the EU, another potential issue is where the design is first made available to the public. There is an argument that any designs first made available outside the EU may not qualify for UCD protection. Therefore, after the UK leaves the EU, companies may wish to consider the country in which they first disclose designs to receive the best unregistered design protection. UK unregistered design right holders may well be best advised to supplement their UK protection with a registered Community design, to ensure EU-wide protection.

Provisions have also been agreed for continued protection of databases in respect of the Database Directive.

What is still to be negotiated?

The Union has proposed that geographical indications, designation of origins or traditional specialities protected in the Union should also be granted the same protection in the UK post-transition, without the need for re-examination. This causes more of an issue than trade marks, designs and plant variety rights, as there is currently no UK act relating to such rights. Therefore, the UK Government will need to enact the provisions of the various EU Regulations, if it is to agree to this proposal.

Article 51 of the draft agreement sets out the basic suggested registration procedure. In particular, that re-registration of EU rights in the UK should be carried out free of charge by the UKIPO, and that there should not be an application or administrative procedure. Further, it is suggested that owners should not be required to have a correspondence address in the UK, until the date of first renewal.

According to the Pan-European Brexit IP Statement issued by the Chartered Institute of Trade Mark Attorneys (CITMA) and various other associations such as INTA and AIM, the UKIPO has confirmed that it is able to cope with this suggested cost-free, automated procedure. If adopted, it will be particularly good news for unrepresented right holders, as they will not miss out on continued protection simply because they don't understand the re-registration process or requirements. This also fits well with the principles of minimum disruption, minimum cost and maximum retention of rights championed by CITMA.

The suggestion that owners should not be required to have a correspondence address in the UK until renewal could cause more of an issue. At present EUTM owners are not notified by the UKIPO if their earlier right is located during examination of a later application. It is likely that UK re-registrations will be treated in the same way as UK national rights, and owners will be notified of conflicting applications. Not only would a UK address for service assist the UKIPO for these notifications, but it will also be beneficial for the reporting of invalidation or revocation.

No agreement has been reached with respect to pending applications for Supplementary Protection Certificates (SPCs) in the UK (Article 56). Negotiations in this area will continue and will most likely be linked to the outcome of the Commission consultation on SPCs and patent research exemptions.

What is missing from the draft agreement?

Under UK law, UK trade mark applicants must confirm on filing that they have a bona fide intention to use their mark in the UK. Where it can be proven that the applicant did not have a bona fide intention to use, the application or resulting registration is vulnerable to opposition or invalidation.

The EUTM does not have an equivalent requirement regarding use, and as a result, applicants have been known to file defensive EUTM applications in order to circumvent the UK use requirements. While automatic re-registration of EUTMs in the UK has been agreed, the UK intention to use requirement has not been addressed in the draft agreement. CITMA's position is that the UK government needs to provide that owners of UK re-registrations should be deemed to have stated a bona fide intention to use the trade mark in the UK, in order to overcome this problem. Without such provision, all UK re-registrations could potentially find themselves subject to applications for invalidation.

The draft agreement sets out the position regarding non-use requirements for the newly created UK re-registrations, but does not mention how Brexit will affect the parent EUTM. Logically, we would expect any genuine use of an EUTM in the UK in the five years before the date of exit of the UK from the EU to be permitted as proof of use. This is on the basis that the UK was, at the time of said use, an EU Member State.

The draft document is silent on the proposed Unitary Patent and Unified Patent Court. Although issues around the UP and UPC are tied up with EU membership, it would appear discussions on their future have been separated from Brexit negotiations.

The draft agreement includes the Union's proposal that lawyers authorised to practise before the courts of the United Kingdom who are representing or assisting a party before the Court of Justice of the European Union in proceedings brought before it or in requests for preliminary rulings referred to it before the end of the transition period, may continue to represent or assist that party in those proceedings or requests. Interestingly, this right extends to all stages of proceedings, including appeal proceedings before the Court of Justice and proceedings before the General Court after a case has been referred back to it.

As details emerge of the transitional provisions, we can at least take comfort that it is business as usual for our clients and their rights until the beginning of 2021

There is, however, no equivalent provision regarding the rights of UK Chartered Trade Mark Attorneys to continue to represent parties before the EUIPO. At present, the UK remains a full member of the EU until we leave on March 29 2019. All rights and obligations of membership remain in place until then. While not yet formally confirmed, it looks unlikely that the UK will remain (or re-join) as a member of the European Economic Area (EEA) after Brexit. Therefore, while the majority of the provisions of the draft agreement refer to the end of the transition period, for the purpose of professional representation before the EUIPO, it is likely that the relevant date will be March 29 2019.

After this date, UK qualified and based representatives will no longer be qualified in one of the member states of the EEA, nor will they have their place of business within the EEA, so they will not be able to represent third parties before the EUIPO.

The position of CITMA regarding the right of representation of UK attorneys is clear: they continue to lobby for our rights to continue after Brexit. In their recent paper in support of the continued right of representation of UK attorneys, CITMA reported that nearly a quarter of all EUTM applications are filed by UK practitioners, and that 40% of EUTMs held by entities based outside the EU use UK attorneys.

Whether or not UK attorneys are able to represent clients before the EUIPO in the long term, clarity needs to be provided regarding our right to continue to represent in relation to applications and proceedings already commenced (either at the date of exit, or the end of the transition period). As with representation before the Courts of Justice, we would expect to be allowed to continue to represent in relation to ongoing cases, as a decision to the contrary would result in additional cost and uncertainty for clients.

Clearly, pan-European firms who operate in both the UK and elsewhere in the EU will see the least disruption, as they will be able to continue representing clients in both jurisdictions.

Looking forward

For many UK practitioners and our continental counterparts, the decision of the UK to leave the EU was disappointing as we see the benefits that the EUTM system provides to our clients. However, as details emerge of the transitional provisions, we can at least take comfort that it is business as usual for our clients and their rights until the beginning of 2021.

Jennifer Good
Jennifer is an experienced UK chartered trade mark attorney, and is based in HGF’s Leeds (UK) office. Jennifer advises on all aspects of trade mark protection, from clearance and registration to contentious matters such as oppositions, revocations and invalidations. A particular focus of Jennifer’s practice is the management of large global brand portfolios. She also has considerable experience coordinating legal teams in various jurisdictions.

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