Brexit transition agreement – what does it mean for trade marks?

9th August 2018

The new agreed text of the draft agreement on the UK’s withdrawal from the European Union provides that any EUTMs that have been registered before the end of the UK’s transition period should automatically be converted into a comparable right in the UK. This should give some comfort to brand owners concerned about post-Brexit Britain, however important outstanding provisions remain to be agreed.

The UK and EU commission have come to an agreement, in part, over the text of the Draft Withdrawal Agreement published by the Commission in February 2018. Green highlighted text in the draft indicates provisions that have been “agreed at the negotiator level” and it is good to see the majority of the intellectual property section covered in swathes of green.

The main articles governing unitary IP rights during and after the transition are in Articles 50-57. The first of these provisions confirms that any EUTMs which have been registered or granted before the end of the transition period (31 December 2020) shall be automatically granted as a UK trade mark consisting of the same sign for the same goods and services.

These automatically arising UKTMs will enjoy the same date of filing or the date of priority of the EUTM. In addition the UKTM will not be liable to revocation on the ground that the EUTM had not been put to genuine use in the UK before the end of the transition period. After the transition period has expired, it is unclear whether a new non-use grace period will apply to these UKTMs. Brand owners should ensure therefore that their new rights are put to genuine use in the UK as soon as possible.

The agreed text further indicates that if an EUTM is declared invalid or revoked, and the proceedings concerning that revocation or invalidity were ongoing on the last day of the transition period, the corresponding UKTM will also be declared invalid or revoked. This is subject to the caveat that the UK will not be obliged to declare the corresponding UKTM invalid if the grounds for revocation or invalidity do not apply in the United Kingdom. This clarification will be relevant for businesses that have a significant brand presence in the UK but have EUTMs that are subject to proceedings in the EUIPO before the transition period ends.

Regarding EUTMs that have acquired a reputation in the EU, once converted to UKTMs these marks should enjoy equivalent rights in the UK on the basis of the reputation acquired in the EU prior to the end of the transition period. The continuing reputation of the UKTM after this point however shall be solely based on the reputation in the UK. This appears to be a common sense transition provision but it places the onus on rights owners to ensure marks maintain a reputation in the UK as distinct from the EU once the transition period is over.

Whilst confirmation of the above will be welcomed by businesses, the lack of agreement between the EU and the UK on the mechanics of the EUTM to UKTM transfer will be concerning. In particular it remains unclear whether there will be any charges associated with the transition and what exactly the administrative burden (if any) will entail.

Of course the best case scenario is that no fees will be charged and the additional UKTMs will arise automatically without the need for additional input from rights holders. However, it would be wise for businesses to anticipate at least some kind of administrative burden, even if that is in the form of a nominal fee.

There are no agreed provisions in the draft agreement dealing with EUTM infringement litigation in the UK. In particular, it remains to be agreed whether the UK courts will continue to have jurisdiction over EUTM infringement claims commenced before December 2020 that have not reached final judgment before that date. Brand owners concerned by this particular problem would be wise to register UKTMs for their core brands now in order to rely on them in infringement actions before the Courts, thereby giving the courts a fall back on jurisdiction if this issue is still unclear by the end of the transition period.

UPDATE

Pursuant to the publication of the UK government’s White Paper on the UK’s future relationship with the EU and updates to the UK government’s “Brexit IP” page we have revisited a number of points made in our previous article above.

Following the Prime Minister’s “Chequers Summit” in early July, the government has given brand owners additional clarity in the murky waters of post-Brexit trade mark protection, in particular in respect of existing EUTMs. The government has confirmed that, regardless of whether or not a deal is reached with the EU, its aim is to “ensure the continuity of protection” and to “avoid the loss” of existing rights.

Concurrently, it has also been confirmed that the UK intends to create and grant 1.7 million automatic and free-of-charge intellectual property rights (including trade marks) corresponding to existing EU-wide rights. We note however that this is subject to the agreement of the Withdrawal Agreement, and as such the government has stopped short of providing a guarantee of free-of-charge IP rights without an agreement with the EU.

The position therefore seems to be as follows: should the UK and EU come to a final agreement on the text of the Withdrawal Agreement, then existing EUTMs will trigger an automatic and free-of-charge analogous UKTM. If there is no agreement, then brand owners must place reliance the UK government’s commitment to provide continuity of protection for existing rights, albeit potentially subject to additional burdens, administrative or otherwise.

The confirmation of free-of-charge automatic rights in the event of a UK/EU agreement is to be welcomed by brand owners. Indeed some comfort can also be taken in the government’s additional comments regarding continuity of protection without a deal. The government’s position is not surprising considering the current ongoing negotiations over Brexit.

In addition to the comments regarding the subsistence of rights post-Brexit, the commission and the UK have come to agreement in principle over further elements of the draft Withdrawal Agreement. Article 63 concerning jurisdiction, recognition and enforcement of judicial decisions had not been agreed to when this article was originally written. Now however the draft text has been agreed in principle and provides that, where proceedings concerning an EUTM were instigated in the UK courts prior to 31 December 2020, those courts will continue to have jurisdiction over those proceedings after that date (assuming the Withdrawal Agreement and transition period are finally agreed).

We will closely monitor any further developments concerning UKTM and EUTM protection and hope that substantive agreement can be reached on the Withdrawal Agreement soon.

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