What does a No Deal Brexit mean for your trade marks?
Recent political changes in the United Kingdom have raised the prospect of a ‘no deal’ Brexit as a serious possibility. It is important to emphasise that even in this situation, there is likely to be an orderly transition of trade mark and other intellectual property rights between the EU and the UK. This transition will be based on the creation of duplicate UK rights for all registered EU trade marks. As a sovereign nation, the UK has the power to create and enforce such UK rights independent of the EU.
The European Union (Withdrawal) Act received Royal Assent on 26 June 2018 and is now law. The Withdrawal Act is intended to ensure that the UK exits the EU with certainty, continuity and control. The proposed Withdrawal Agreement between the UK and the EU has been rejected by the British Parliament, but the EU has granted a six months extension to 31 October 2019 (‘Brexit Day’) for the UK to withdraw from the EU. It is possible that the UK will ncompaegotiate a revised Withdrawal Agreement with the EU or leave the EU on Brexit Day on a no deal basis. Under the current Withdrawal Agreement, there was to be a transition period under which the UK would still be bound by EU rules up to 31 December 2020. This transition period will not be applicable in the event of a no deal Brexit.
Even if there is a no deal Brexit, all existing registered EU trade marks will be granted an equivalent or comparable trade mark. In the UK, this “cloning” of trade marks will be automatic and involve no cost to trade mark owners. The registered EU trade marks from which the UK marks will be cloned will continue in force in the EU but this jurisdiction will of course exclude the UK. The cloned UK trade marks will have a prefix designation showing that they have been cloned from the EU marks. International marks currently designating the EU will be split into separate designations for the EU and the UK. The foregoing procedures will apply whether or not the UK adopts a no deal Brexit or negotiates a formal Withdrawal Agreement with the EU. The major difference is that the existing Withdrawal Agreement provides for a transition period ending on 31 December 2020, at the earliest.
As a consequence, there should be an orderly creation of equivalent rights in registered trade marks in the UK which are comparable to existing EU rights. However, this automatic transfer of trade mark rights will not be applicable to pending EU trade mark applications. For these pending EU marks, it will be necessary for the marks to be re-filed in the UK within nine months of Brexit Day for those rights to be maintained in the UK. The UK IPO will recognise all filing dates in claims to earlier priority as recorded on the corresponding EU applications. It is therefore important that trade mark owners or their legal representatives take steps to re-file EU trade mark applications in the UK during this nine month period after Brexit Day.
Whether or not there is a no deal Brexit, trade mark owners may wish to consider the following issues:
- In the event that you are filing a trade mark in the EU now, it would be wise to concurrently file that mark in the UK to avoid the necessity of re-filing the application if the mark is not registered by the end of the above nine month period.
- Consider whether the EU application itself covers sufficient countries and whether certain nearby non-EU member states should also be included.
- Assess whether independent trade mark rights in the UK are worthwhile to your business, especially if you have no business activities planned in that jurisdiction.
- Diarise nine months from Brexit Day to ensure pending trade marks applications are re-filed in the UK.
- Expedite any ongoing oppositions and other proceedings to ensure completion before Brexit Day.
- Review if existing agreements and distribution contracts need to be modified to take account of the separation of the EU and UK jurisdiction.
- Continue to monitor Government policy on unresolved issues concerning EU and UK trade mark rights. These issues could include the likely treatment of evidence of prior use of UK trade marks by the UK IPO where that use took place in the jurisdiction of the residual EU.
Although a no deal Brexit is unlikely to preclude an orderly creation of equivalent EU trade mark rights in the UK, no one can confidently forecast the final outcome in the increasingly unpredictable Brexit story. Depending on political developments, the UK could end up with a negotiated Brexit, a no deal Brexit or no Brexit at all. This situation evokes the ancient Chinese curse: ‘May you live in interesting times’.