Brexit And EU Trademarks – Use It And Lose It?

Could I potentially end up losing my European Union Trade Mark (EUTM) even though I am actively using it in business?

Following our previous blog What Impact Will Brexit Have On Your Trademarks? which outlined some of the possible effects of Brexit on intellectual property rights (IPRs), this blog explains the possible consequences of Brexit on the enforceability of EUTMs, zooming in here on the question of use.

Since its launch in 1996, the EUTM (previously called the Community Trade Mark, or CTM) has been hugely popular with UK businesses, including SMEs and sole traders. With just a single filing before the EUIPO (in Alicante, Spain), a business even as modest in size as a one-man band, could register and protect its brand across the whole territory of the EU.

 EUTMS are good value

The official fees for registration of an EUTM start at 850 Euros for a single class of goods or services. Given that a registration provides protection for ten years across 28 EU member states (at least until Brexit), that works out at an average of just 30 Euros per member state! That is a large saving in costs when compared with the official fees payable at a national level. For example, the total official fees to register a trade mark in one class in the UK, France and Germany is about 770 Euros. Throw in Ireland as well and the filing fees are about 1025 Euros– four countries costing more than that of the EUTM.

It is easy then to understand why the EUTM has been so popular with UK businesses. But what about the impact of Brexit?

Impact of Brexit

After the UK leaves the EU, an EUTM will no longer be enforceable in the United Kingdom. Not only must a UK business that currently relies on its registered EUTM to protect its brand, need to secure protection of its brand in the UK, but it must also consider whether its remaining EUTM will still be enforceable.

Let’s leave to one side, for now, the issue of securing UK protection, and zoom in here on the remaining EUTM. Although registered for a period of ten years before it is due for renewal, after a period of five years, your EUTM is enforceable only for those protected goods or services for which there has been genuine use in the EU. For present purposes, the key point here is that you are required to demonstrate genuine use in the European Union. But does that mean in terms of geographic spread?

Back in 1996, the EU was anxious to promote the EUTM and so the EU Commission stated the view that use in just one EU state would be enough to enforce it. However, recent court decisions (of the EU Court of Justice and of the Courts here in the UK) have cast serious doubt as to whether this view is still correct. The better view now seems to be that use of your EUTM in just one EU state is not necessarily enough.

Brexit and the effect on “use” of EUTM

Let’s look at what this might mean in practice for UK businesses that protect their brands by way of the EUTM.

Imagine you are a business, based in the UK, selling all or nearly all your products in the UK and Ireland and you have protected your brand as an EUTM. At present, if someone else uses the same or a confusingly-similar trade mark for the same or similar products, you can object and, all things being equal, you will likely succeed. But what happens post-Brexit?

After Brexit, your EUTM will no longer be of any use in the UK and you will need to secure UK protection. Moreover, though, what happens if you should need to enforce your EUTM against an infringer trading in Ireland? Post-Brexit, in this scenario it is possible that only your sales in Ireland will support your EUTM (and this is likely to be so in the long-term). However, we have seen that there is serious doubt that use of an EUTM in just one EU state will be enough. In this example, if you should seek to enforce your rights against an infringing trader in Ireland, they might successfully counter-attack, cancelling your EUTM on the basis that your use in Ireland is not enough.

Suddenly, your hypothetical EUTM – which was supposed to protect your brand across the whole EU – could end up being unenforceable, and, even worse, it could end up being cancelled. So, you could lose your EUTM even though you are using it.

Take home point

The key take-home point here is that the combination of Brexit and the tightening-up of the rules about what amounts to genuine use of an EUTM means that businesses really need to review their trade mark registration strategy to ensure that their brands are protected and enforceable going into the future.

For some businesses with existing EUTM registrations, this review will mean that they will need to make national trade mark filings in order to secure their brand protection in the post-Brexit world. For other businesses, who want to protect their new brands in the EU/UK, they will need to consider making national trade mark filings instead of opting for the EUTM.

Here at Azrights, we advise the full range of businesses about brand strategy, including how best to secure trade mark protection in light of the impact of Brexit. Please contact the joint authors, Shireen Smith and Kieran Heneghan if you want to discuss protection of your branding assets.