What Impact Will Brexit Have On Your Trademarks?

How to be prepared and make the correct moves to protect your intellectual property position

The media is abuzz with talk and comment on the ramifications Brexit will have on commerce.   Much relates to transport, travel and currency with the impact this will have on the marketplace.   A vital area, not to be overlooked, is the effect Brexit will have on intellectual property rights, such as trademarks, from a business perspective.  It is important for businesses, including small-to-medium-sized enterprises (SMEs), to have some understanding, and strategy, that copes with the certainty, and uncertainty associated with its consequences.

There are a series of headings that need to be reviewed apart from trademarks so that the many businesses that rely on other types of intellectual property can prepare themselves.  The main elements that SMEs may encounter are:

Trade marks

Any person or company holding an EU Trademark (EUTM) must review its position in light of the UK exit. It may lose its protection in that market and may have to reapply.  Of course, the UK government might agree to some arrangement whereby existing rights will automatically transfer, with or without the payment of a fee, but that’s by no means a certainty.

Sufficient use

One aspect of this relates to the “use” requirement for trademark protection.  It has been the practice that, if a mark was used in, say, the UK and Ireland, that this should constitute sufficient use to enjoy protection in all member states.  When the UK leaves the EU, a business may have insufficient use of its EUTM elsewhere in the EU to meet the threshold requirement.  In such a case EU-wide protection could be lost.

Registered Community Design:

Like the EUTM, a Registered Community Design (RCD) provides design protection across the EU. That which can be protected is very wide-ranging indeed.  It includes furniture, bicycles, chocolates and, for example, decoration applied to such items or clothing and fashion items. After the UK leaves the EU, however, the RCD will no longer be enforceable in the UK. If an SME designs and markets any product – from high fashion to bathroom fittings – it will need to know how to protect the designs in the UK post-Brexit.

Domain names: .eu designation

If you are a corporate owner of .eu domain names, you need to review your domain name portfolio to ensure it is Brexit-proof. After the UK leaves the EU, it is not clear whether a UK entity will still be permitted to own a .eu domain name.  Busineses and companies with .eu domain names will need to identify such domain names in their portfolio and decide whether it will be necessary to transfer ownership into an entity placed within the EEA.

Contractual agreements:

 While the effect of Brexit on contracts generally is likely to be dealt with in the UK/EU Brexit agreement(s), in the context of IP, SMEs will need to know what effect Brexit will have on IP licences and agreements. For example, will a trademark licence for “the territory of the EU” include the UK after Brexit? If a settlement agreement with a competitor provides that they agree not to use brand X in the EU, will they be permitted to use it in the UK post-Brexit? It will also be important to ensure that any agreements or licences which are negotiated in the period leading up to March 2019 properly address the effect of the UK’s departure from the EU to minimize trading uncertainty.

Geographical Indications and Appellations of Origin

These terms relate to the geographic location used to designate the goods or services which originate from a particular region or place.  Champagne must come from that region in France while Feta cheese must come from Greece. It is not yet clear what effect Brexit is going to have on the extensive scheme of EU protections for geographical indications, which include Protected Designations of Origin and Protected Geographical Indications. Although some of these EU schemes are open to non-EU applicants, the “home” country must provide reciprocal recognition (we will protect your name if you protect ours). In the absence of mutual recognition, food producers could face competition from cheaper versions of protected names. That said, the law of passing off will still be available post-Brexit and the UK Courts are extremely unlikely to allow SMEs to use famous names like champagne or Feta in the UK after Brexit.

Patents

While Brexit presents a particular level of uncertainty in respect to some aspects of patent law, others remain unchanged.  Indeed, the good news for inventors seeking to protect their inventions in Europe, is that they may not need to adjust their filing strategies because of Brexit. Even after the UK leaves the EU, it will still be possible for inventors to obtain protection for their inventions in the UK by filing patent applications directly at the UK Intellectual Property Office. Because these patent applications (and eventual patents) are governed by UK national patent law, Brexit will have no effect on UK patents granted by the UK Intellectual Property Office.

Similarly, inventors will still be able to obtain protection for their inventions in other European countries by filing European Patent Applications at the European Patent Office, because the European Patent Convention (EPC) is not a piece of EU legislation and will be unaffected when the UK leaves the EU.  Existing European patents covering the UK are also unaffected by the Brexit decision.

Necessary Actions

There has been a huge increase in the number of UK trademark filings. For example, UK trademark filings by US applicants have jumped by over 150%, filings from China by over 175% and filings from Canada by about 100%.

Clearly, businesses are taking action now to protect their intellectual property (IP) rights rather than awaiting the outcome of the divorce talks between the remaining EU states and the UK. Many are pro-actively ‘Brexit-proofing’ their IP rights.

Although it is hoped that the divorce settlement will make provision for the re-registration of European Union Trade Marks (EUTMs) and of Registered Community Designs (RCDs) before the UKIPO, if the UK and EU were to fail to reach agreement all EUTMs and all RCDs would simply cease to have effect in the UK after 29 March 2019 (the day that the UK will leave the EU).

The potential loss of enforcement of your EUTMs or RCDs in the UK may have very serious consequences, so it may be an idea to review your position sooner rather than later.  The authors, Shireen Smith and Kieran Heneghan would be delighted to assist you with this.