European Union: IP Protection Post BREXIT Part 1: A Right-By-Right Analysis

Progress is being made regarding the protection of intellectual property ("IP") rights in a post-BREXIT scenario on both sides of the English Channel. With BREXIT fast approaching, the European Union ("EU") and the United Kingdom ("UK") have been pushing things forward at the negotiators level, but also independently. The European Commission got the ball rolling by releasing the third version of the Draft Agreement on the withdrawal of the United Kingdom and Northern Ireland from the European Union and the European Atomic Energy Community ("Draft Agreement") on March19, 2018, which reflected the state of affairs with regard to post–BREXIT protection of pan-European IP rights. Shortly thereafter, on March 28, 2018, another statement was released pertaining to .eu country code Top Level Domains ("ccTLD Statement"). The UK, on the other hand, ratified the Unified Patent Court Agreement ("UPCA") on April 26, 2018, and, before that, the Hague Agreement for industrial designs that took effect on June 13, 2018. Additionally, the parties jointly released a statement on June 19, 2018 ("Joint Agreement"), stating that they had reached an agreement at the negotiators level with regard to the Draft Agreement relating, inter alia, to the protection of pending Supplementary Certificates ("SPC").

On July 12, 2018, the UK Government released a White Paper, a proposal for the future relationship between the UK and the EU ("White Paper"). On Thursday, July 19, 2018, the Parliamentary, Robin Walker MP, confirmed the UK Government's intention to grant protection to IP rights holders following BREXIT equal to that under the current IP regime of the EU, which was then reaffirmed on July 23, 2018, by the post of a news story titled "IP and BREXIT: The facts" on www.gov.uk ("UKGov News").

This article is the first of two parts dedicated to providing a comprehensive overview of what IP right owners can expect when the UK leaves the EU on March 29, 2019 ("Exit Date"), by summarizing the state of affairs for each IP right category separately. Herein we will give you some background information and deal with post-BREXIT issues related to European Union trade mark Registrations ("EUTM"), Registered Community Designs ("RCDs"), Unregistered Community Design Rights ("UCDs") and granted Community Plant Variety Rights ("CPVRs") (together, "EU-IP"). The second part will be directed at issues relating to Geographical Indications ("GIs"), eu. country code TopLevel Domains ("ccTLD"), data base rights, European Patents ("EPs") and Supplementary Certificates ("SPCs"). Both parts of the article will be supplemented by a set of actions that we suggest can be taken to address the risks indicated by the probable future IP right regimes that we are facing and the risks associated with the uncertainties of a "deal or no-deal" scenario.

SOME BACKGROUND

With the UK's public vote to leave the EU on June 26, 2016, one of the countless topics to be addressed in the BREXIT negotiations is: "What will become of this EU-IP post BREXIT"? Without any form of agreement between the EU and the UK in place after the Exit Date, EU law will no longer apply to the UK, and the European Court of Justice ("ECJ") will not have jurisdiction over the UK as of this date. In this worst case scenario, EU-IP will simply cease to extend to the UK from one day to the next. IP right holders that had mainly or exclusively relied upon such EU-IP and made significant investments in this regard could now end up without any form of protection in the UK. Given the thriving activities of UK businesses in filing, for example, EUTMs (being the second highest number of filings in the EU), this is not only a concern for EU-IP holders in the mainland Member States, but also of particular interest for EU-IP holders in the UK.

Agreed and not agreed (until everything is agreed) – Part 1

1. Transition Period and Certain Common Principles

The Draft Agreement was the first sign of significant progress in the negotiations between the EU and the UK. Certain sections of it provide for certain common principles that apply to most EU-IP. Other arrangements only apply to certain types of IP rights.

First and foremost, as stipulated in Article 121 of the Draft Agreement, the negotiators have preliminarily agreed on a transition and implementation period that runs from March 30, 2019, to December 31, 2020 ("Transition Period"). According to Article 122 of the Draft Agreement, EU rights – including EU-IP – will extend to the UK during the Transition Period and shall:

  • produce in respect of and in the UK the same legal effects as those that it produces within the Union and its Member States;
  • be interpreted and applied in accordance with the same methods and general principles as those applicable within the Union; and
  • be deemed to include the UK when making any reference to Member States in EU.

The Draft Agreement also states that EU-IP granted by December31,2020, will also automatically be registered as a separate right in the UK ("UK Equivalent"). This applies to all registered rights – i.e., EUTM, RCDs and CPVRs. The UKEquivalent will have the same filing, renewal and priority dates as the original EU-IP.

If an EU-IP is subject to an invalidation/revocation or nullity or cancellation proceeding that has been ongoing prior to the end of the Transition Period and such EU-IP is declared invalid/revoked or cancelled in such a proceeding (even after the end of the Transition Period), the UK Equivalent too will be held invalid/revoked at the same date. However, in accordance with Article 50 Sec.3 of the Draft Agreement, the UK will have no obligation to issue such declaration where the grounds for invalidity/revocation or nullity or cancellation of the EU-IP do not apply in the UK.

Another agreement that could be reached pertains to the exhaustion of IP rights, which is a principle common to most IP rights, but has found its specific expression in the EU in what is called the "Fortress Europe." In principle, exhaustion in the EU applies, and an IP right is not infringed by its use, if the IP right, or a product applying the IP right, was put on the market in the European Economic Area ("EEA") by the proprietor or with his consent. The Draft Agreement contemplates that IP rights so exhausted within the EU (including the UK, for the term of the Transition Period) will remain exhausted in the UK and the EU thereafter. Naturally, the Draft Agreement does not address exhaustion after the Transition Period. It is yet to be discussed which approach on exhaustion the UK will take after the Transition Period. If the UK decides on using a national exhaustion regime, it may be possible for UK IP rights to be used to prevent parallel imports from the EU into the UK. This topic is further discussed here. In the UKGov News, it has been suggested, however, that the UK looks forward to "exploring arrangements on IP cooperation that will provide mutual benefits to UK and EU rights holders", and in this sense to discuss issues like exhaustion of IP rights.

2. Trademark Rights

In addition to the above-stated principles that will apply to the registration of UKEquivalents, holders of EUTMs that are converted into UK Equivalent trademarks will further benefit, if applicable, from the seniority of a UK trademark that was claimed in the EUTM registration.

A crucial point to highlight is that EUTM applications that were filed within the Transition Period and received a date of filing, but are still pending at its end, will not automatically be converted into UK Equivalents. Instead, the applicant will have a so-called "right of priority," meaning the right to file for an identical copy of such EUTM application (i.e., identical mark and identical list of goods and services) in the UK within nine (9) months of the end of the Transition Period, and will then be granted the same filing date and priority as its corresponding EUTM application.

Other issues to be aware of relate to:

a. genuine use

UK Equivalent trademarks will not be liable to revocation on the ground that the corresponding EUTM was not used in the territory of the UK before expiry of the Transition Period. It remains unclear, however, when the non-use period will start to run after the end of the Transition Period. This effectively extends the so-called "grace period" of the UK Equivalent trademarks, meaning the period in which to commence use of the mark in the UK before the UK Equivalent trademark becomes vulnerable to cancellation for non-use. However, there is no such provision for the reciprocal grant of EUTMs used solely in the UK. Even though the EUIPO's Q&A document published in January 2018 suggests that use of an EUTM in the UK qualifies as use in the EU at least as it relates to the period before the Exit Date, it has not found its way into the Draft Agreement. For businesses that have been operated in the UK exclusively before the Exit Date, there remains a risk that their EUTMs may be vulnerable to cancellation for non-use in the EU.

b. reputation

Until expiry of the Transition Period, UK Equivalent trademarks will benefit from the reputation that the corresponding EUTM enjoys in the EU. Thereafter, reputation will be based on the use in the UK.

c. International Registrations with EU designations

The UK also agreed to take measures to ensure that trademarks protected in the UK through an International Registration designating the EU via the Madrid System will continue to enjoy protection following the end of the Transition Period.

3. Designs

a. Registered Community Designs ("RCDs")

The protection mechanisms provided under the Draft Agreement for RCDs are essentially the same as those for UK Equivalents in general (as described in Section1) and UKEquivalent trademarks (as described in Section 2) above. Here, too, UK Equivalents will have the same filing and priority dates as their RCD counterparts, and RCD applications still pending at the end of the Transition Period must be filed again with the UK IPO within nine (9) months in order to enjoy such privilege.

In addition, with its ratification of the Hague System on March 13, 2018, which took effect on June 13, 2018, the UK opened up another possibility for foreign companies and individuals to obtain design protection in the UK. Comparable to the Madrid System for international trademark registrations, the Hague Agreement allows applicants to register a design in any one of the 67 contracting countries through a single application via the World Intellectual Property Organization ("WIPO"). Previously, design protection in the UK via the Hague Agreement could be obtained by means of designating the EU only (which included the UK), but it will now be possible to designate the UK directly through the system. On the other hand, in the Draft Agreement, the UK agreed to take measures to ensure the protection of EU designations via the Hague System that were registered before the end of the Transition Period.

b. Unregistered Community Designs ("UCDs")

UCDs are designs that, from the date on which they were first made available to the public within the EU, are protected under the Council Regulation (EC) No.6/2002. The UCD protection lasts for a period of three (3) years. The Draft Agreement provides that the holders of UCDs that were made available before the end of the Transition Period will benefit from a UK Equivalent for the remaining period of protection. However, the UK still has to provide for the respective mechanism, as the UK's current unregistered design right legislation does not offer the same scope of protection as that provided under the EU regime. In the UKGov News the UK stated it will establish new schemes, which "will preserve the full scope of the UCDs in the UK".

4. Community Plant Varity Rights ("CPVR")

UK Equivalents relating to CPVRs benefit from the same principals common to all registered EU-IP, as discussed in Section 1 above. Additionally, the term of the UK Equivalent shall be at least equal to the remaining period of protection under EU law. Comparable to the provisions on pending EUTM and RCD applications at the end of the Transition Period, CPVR applications will not automatically be converted into corresponding UK applications. The applicant will instead have an ad hoc right of priority, meaning the right to file an identical UK application that secures the priority of the CPVR application for the UK application for the purpose of determining distinctness, novelty and entitlement to the right of such a UK application. However, the period to file a priority saving application in the UK is reduced to six (6) months only.

ACTIONS THAT CAN BE TAKEN NOW

Although the UK's Prime Minister, Theresa May, recently announced that the EU and the UK still want a deal in place by October 2018, the UK, at several points in negotiations, has threatened to leave the EU without a deal. And, indeed, the possibility remains that topics other than IP prevent the UK from signing the final draft of the Withdrawal Agreement. IP owners may seek comfort in the July 19, 2018, announcement of the Parliamentary Under-Secretary of State for Exiting the European Union, Robin Walker MP, that stated: "We have agreed to protect all existing EU trade marks, community registered designs and unregistered designs in the UK as we leave the EU. In place of those EU-level rights, 1.5 million new UK trade marks and registered designs will be granted automatically and for free."

However, IP owners are also advised to bear in mind when planning their future IP strategy that none of this is certain as of yet. Even though each portfolio provides for unique challenges and measures should be assessed on a case-by-case basis. There are a number of general actions that could be considered at this stage:

  • EUTM and RCD holders:
  • Review of Portfolio. Owners should review their portfolios for marks or designs that are protected solely by European or International Registrations with EU designation. With regard to important assets, thought could be given to filing a national UK application or an International Registration with UK designation for additional reassurance.
  • Dissimilar Protection. Likewise, if you hold protection under both the UK and the EU trademark regimes, you may want to make sure that the goods and services that your business offers, or will offer in the near future, are protected by both registrations equally – if this is not the case, you could consider filing a separate EUTM or UK trademark, as the case may be.
  • Existing UK trademarks. Owners of existing UK registrations are advised to consider a renewal of protection where necessary.
  • New Filings. With regard to new filings for EUTMs or RCDs, important applications could be accompanied by a national UK application for additional reassurance.
  • Pending EUTM Applications Subject to Oppositions. On the subject of pending EUTM applications that are subject to an opposition based on the earlier national right of countries remaining in the EU (i.e., trademark, company name, etc.), it may be advisable to push things forward, because, in order to profit from a UK Equivalent, the trademark must be registered at the end of the Transition Period. On the other hand, in relation to pending EUTM applications that are subject to an opposition based on an earlier UK right (e.g., by way of extending the cooling-off period), or pending UK trademark applications that are subject to an opposition based on an earlier EUTM, thought could be given to slowing down the opposition proceeding (e.g., by way of extending the cooling-off period). This is because, after the Exit Date or, respectively, the Transition Period at the latest, these earlier rights will likely not be a legal basis for an opposition against your application anymore.
  • Sole Use of EUTMs in the UK. Owners of EUTMs that have been put to use exclusively, or almost exclusively, in the UK and are (or will soon be) subject to the use requirement may want to consider starting to use their rights more extensively in other EU countries or to register new national trademarks in important countries of the EU in order to benefit from a new grace period.
  • Breeders: With regard to applications not yet filed or likely not to be granted until December 31, 2020, breeders can expect to file applications in the EU and in the UK. Since the latter application will be required immediately following the Transition Period and will likely go hand in hand with double the paperwork and two lots of Distinctness, Uniformity, Stability ("DUS") examinations, timely preparation will be an advantage.

Mofo Tech Blog - A blog dedicated to information, trend-spotting & analysis for science & tech-based companies

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions