2020 has been a tough year and that's putting it mildly. The countdown on new year's eve will not only mean the coming of a new hopeful year, but also the coming of something big. With the transition period expiring on the 31st December 2020, brace yourself - Brexit is coming!
In January 2020, the United Kingdom ('UK') formally left the European Union ('EU') with a deal referred to as the Withdrawal Agreement, which set out the process to be followed to allow the departure to be run as smoothly as possible. This agreement did not however set the terms of the relationship between the UK and the EU going forward - these terms were to be agreed during the following 11 month transition period. During this transition period to negotiate the future relationship, the UK still traded within the EU and followed EU rules as it had before.
The transition period however expires in less than six weeks and the troubled negotiations have led to reports that sealing a Brexit deal might be delayed to the 28th December, a mere 3 days before the UK is officially and automatically dropped from the single market and existing arrangements between the Member States.
Brexit therefore poses implications on a variety of industries on both sides of the pond. The first article, which you can read here, in this two-part series, discusses the main issues to be considered in the field of data protection, whilst this second article, explores the implications that Brexit brings about in the sphere of intellectual property.
Brexit & Intellectual Property
Within the EU, trademark and designs are subject to an extensive legal framework, including particularly Regulation [EU] 2017/1001 (the 'EUTMR') and Regulation [EU] 6/2002, and which have created the concept and system of EU trade marks ('EUTMs') and registered community designs ('RCDs') as managed by the European Union Intellectual Property Office ('EUIPO'). As from the 1st January 2021, this EU legal framework will no longer apply to the UK, so what does this mean for holders of EUTMs and RCDs?
EUTMs and RCDs offer the rightsholder the possibility of having the same level protection across the Member States, and all through one centralised format. With the UK no longer forming part of the EU, rightsholders are therefore in a situation where the extent of the protection of their intellectual property is uncertain. To this effect, the EUIPO has issued a number of communications to informs rights holders, professional representatives and relevant stakeholders on the manner in which it will tackle specific issues at the end of the transition period, particularly since Brexit will result in a 'loss of rights as regards the protection of rights and the capacity to act in proceedings before the [EUIPO]'. It must be noted that these communications do not constitute law, however serve as general instructions to guide relevant parties on the way forward.
First and foremost, it must be noted that at the end of the transition period, (i) any right granted by the EUIPO will only cover the EU Member States, (ii) any application for a EUTM or a RCD will no longer cover the UK; and (iii) any designs granted protection as unregistered community designs ('URCDs') shall only have effect in the EU Member States. Despite this, the Withdrawal Agreement has catered for continued protection of EUTMs and RCDs in the UK. If you are the rightsholder of an EUTM successfully registered before the end of the transition period, you are to, without any re-examination, become the holder of a comparable registered and enforceable UK trade mark, free of charge, having the same sign, goods and services, data of filing/priority of the EUTM in question. In a similar fashion, if you own a RCD before the end of the transition period, you are to, without any re-examination, become the holder of a comparable registered and enforceable UK design right, free of charge, having a remaining period of protection equal to that of the corresponding RCD and the same date of filing/priority of the RCD. Such corresponding UK trade marks and design rights shall be renewable for the first time on the renewal data of the corresponding EUTM or RCD, and for the first three (3) years following the end of the transition period, as the holder of such UK corresponding UK trade marks and design rights, you will not be required to have a correspondence address in the UK.
The above shall not apply to EUTMs or RCDs which are declared invalid or revoked in the EU and which relevant administrative or judicial proceedings has been ongoing on the 31st December 2020. In that case, the corresponding UK right shall also be declared to be invalid/revoked/cancelled with the same date of effect as that within the EU.
In the case of URCDs, the Withdrawal Agreement also provides for continued protection, so if you are the rightsholder of a URCD before the end of transition period, you shall ipso jure become the holder of an enforceable intellectual property right in the UK, having the same level of protection and a remaining period of protection equal to that of the corresponding URCD.
Where you are domiciled or your company has its seat in the UK and you own a EUTM, the ownership of the EUTMs as objects of property shall be subject to Spanish law. This does not apply in the case that the rightsholder has a real and effective establishment in an EU Member State, in which case the law of that Member State shall apply.
Secondly, it must be noted that natural or legal persons having their domicile or principal place of business outside the EEA, that is, in countries such as the UK, shall have to appoint a professional representative where their right is, or becomes the subject of proceedings before the EUIPO. This means that representation is not required in cases of the submission of an EUTM or RCD application or requests for renewal of the same rights. Where the appointment of a representative is required for the undertaking of certain proceedings before the EUIPO, such as handling of oppositions, applications for transfers and licences, amongst others, and a representative is not engaged by the rightsholder/applicant, the action shall be refused or rejected as inadmissible by the EUIPO. Where, on the 1st January 2021, there are ongoing proceedings which has been initiated prior to the end of the transition period , and a UK representative was already representing a party in the relevant proceedings, the EUIPO shall not ask for the UK representative to be replaced with an aforementioned representative, that is, a representative satisfying the legal criteria set out in Article 120 EUTMR, regardless of the stage in which the proceedings are.
Other than the specific cases catered for at law where rights protected outside the EU may be eligible basis for action, in the case of inter partes proceedings, such as oppositions, invalidity of EUTMs and RCDs, UK rights shall cease ex lege to be 'earlier rights' once Brexit comes. This is of crucial importance - regardless of the status of the proceedings at first instance, this means that any actions based on UK rights that are still pending on the 1st January 2021 shall be dismissed for lack of valid basis, with costs to be borne by each party respectively. This also presents an issue in regard to the probative value of evidence presented in case of proof of genuine use of a EUTM. Whilst the evidence shall still be taken into account for the maintenance of the rights in the EUTM, the significance of that evidence of use shall progressively decrease over time, with this assessment of relevance being conditional on the period of time at issue.
Since the UK will no longer form part of the EU, any evidence relating to the UK however can no longer sustain or contribute to the protection of a EUTM - this is of particular relevance in cases of requests for opposition of invalidity, where parties aim to prove the reputable nature of their mark within specific jurisdictions.
The EUTMR allows for proprietors of an earlier trademark registered in a Member State or under international arrangements having effect in a Member State to claim seniority of the earlier trade mark where the proprietors would have applied for an identical trade mark for registration as an EUTM. In such a case, where the earlier trade mark is surrendered or allowed to lapse, you would be deemed to continue to have the same rights under the EUTM as you would have had if the earlier trade mark had continued to be valid. Vis-à-vis Brexit, the EUIPO has informed that seniority claims based on UK trade marks will ex lege cease to have effect from the 1st January 2021. Despite this, any seniority claims based on UK trade marks filed until the end of the transition period will still be published and processed by the EUIPO.
The proprietor of an EUTM or the application for an EUTM may request the conversion of the EUTM or the application for the same to be converted into a national trade mark application in accordance with the provision of Article 139 of the EUTMR. Following the 1st January 2021, any requests for conversion to a UK trade mark will not be accepted by the EUIPO, and requests for conversion to the UK until the end of the transition period will only be accepted where the request is in accordance with the terms of the law, and so long as any deficiencies within the request are remedied until the 31st December 2020.
The end of the transition period is less than 6 weeks away, so if you own EUTMs and RCDs, or you are the holder of a URCD, we suggest that you assess what the changes Brexit will bring about for your business, your relationships with licensees, etc.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.