On March 19, 2018, the updated draft of the Agreement on the Withdrawal of the United Kingdom from the European Union ("EU") was published. The draft provides, inter alia, for the continued protection of intellectual property rights in the UK post withdrawal, and particularly that of EU-registered trademarks, designs and plant-breeders' rights.

According to the current draft, trademarks, designs and plant-breeders' rights that are registered in the EU by December 31, 2020 will be automatically registered in parallel in the UK (including the benefit of an earlier application date), without additional action or cost. Certain aspects of this arrangement remain under negotiation.

The flip side is that if one of the aforementioned rights is revoked or declared invalid by an EU decision before the end of December 2020, the parallel right will be declared invalid in the UK as well (although the UK is entitled to consider the right as valid if the ground on which it was invalidated is not applicable in the UK).

As for pending applications for trademark, design and plant-breeders' rights in the EU before December 31, 2020, the applicants will have a grace period for submission of corresponding UK applications that will enjoy the EU application date. This period will be six months from the end of 2020 for plant-breeders' rights and nine months for trademarks and designs.

According to the draft, the UK is supposed to take steps to allow parallel protection in the UK for registered international rights designating the EU that were registered before December 31, 2020 (trademarks under the Madrid System and designs under the Hague System).

Unregistered EU rights holders, such as unregistered designs or databases, which merited protection in the EU before December 31, 2020 will continue to enjoy protection of their rights in the UK at the same level (at least) that they would have enjoyed if not for the withdrawal (the aforementioned does not detract from the existing protection in the UK of unregistered rights according to international conventions, such as copyright protection).

This is not a comprehensive draft. It leaves certain matters open, and it remains subject to negotiation. Rights holders still need to pay attention to the following:

1. Even though registered EU trademark holders will enjoy parallel protection in the UK, the significance of non-use of a mark in the UK after the end of 2020, remains unclear (e.g. under what circumstances the mark may be vulnerable to revocation for non-use). Practically speaking, it is advisable, where having a UK mark is significant, for rights holders to take steps to use their marks in the UK after the end of 2020.

2. At the same time, it must be remembered that use in the UK after the end of 2020 will not constitute use in the EU. The same advice therefore holds true with regard to using marks in EU countries (at least one) after the end of 2020.

3. Where licenses or similar agreements pertain to use in the EU, the effect of the separation of the UK from the EU on those agreements needs to be evaluated in advance of the actual separation. For instance, a coexistence agreement that allows one company to use a certain trademark in the EU and another to use it in the rest of the world would probably need to be amended to clarify which company has the right to use the mark in the UK following its withdrawal from the EU. Since this is primarily a contractual issue, it is not clear whether it will be included in the separation arrangements and it is possible that it will remain entirely within the realm of contracts.

The Intellectual Property team at HFN is happy to be at your service for any questions and will continue to update you on developments on this issue.

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.