THE IMPACT OF BREXIT ON TRADEMARK PORTFOLIO MANAGEMENT AND MONETIZATION
By: Julie Tolek
The withdrawal of the United Kingdom (UK) from the European Union (EU), also called “Brexit”, was formally announced by the British government in March 2017. The UK officially left the EU at 11 P.M. on January 31, 2020, beginning a transition period set to end on December 31, 2020. This transition period will allow the EU and UK to continue to negotiate their future relationship.
Brexit will influence intellectual property rights not only throughout the UK and EU, but also throughout the world. For example, internationally recognized marks may feel Brexit’s influence as Brexit affects the international protocols, treatises, and agreements, which govern reciprocal applications and registration information. Thus, it is extremely important to consider immediate and future trademark filing strategies, which include an initial understanding of how intellectual property rights, specifically trademarks, are to be handled during the transition.
Summary of Brexit’s Effects on Trademarks
The transition period for Brexit will extend from February 1, 2020 until December 31, 2020. Here is what is important to know about Trademark rights during this transition period:
The United Kingdom Intellectual Property Office (UKIPO) confirmed that any EU trademark registration granted before the end of the transition period, December 31, 2020, will be a cloned right into a UK registration at no cost to the owner and with no requirement to refile in the UK. However, the EU trademark owner has the option of opting out of this cloned right.
For applications still pending at the end of the transition period, the UKIPO has stated that owners will have the option to file these pending applications in the UK within nine months from the end of the transition period which will grant the UK filing the priority date of their original EU application.
It is uncertain whether the cloned UK rights will still be part of the international system or whether they will be treated as UK national rights. The withdrawal agreement includes specific provisions for the continued protection of EU intellectual property rights in the UK after the expiration of the transition period as well as for providing continuity of proceedings brought before the expiration of the transition period. [i]
Further, no impact will arise on international trademarks already registered under the Madrid Protocol. The UK and other EU countries are contracting parties to the Madrid Agreement, which allows an applicant to use the same application to apply in more than one contracting party or country. Thus, all international trademarks registered under the Madrid Protocol will remain protected in the EU and the UK during the transition.
International trademarks filed under the Madrid Protocol after the transition ends on January 1, 2021, however, will not be protected in the UK according to the current framework.
The International Trademark Association (INTA) provides the following summary of the provisions of the Withdrawal Agreement relating to trademarks:
- expiration will automatically acquire a corresponding registered (and enforceable) UK right at no charge. [If a mark is registered before the end of the transition period, it will automatically convert to include in the UK in the scope of its protection. There will not be a separate certificate or notification sent to owners – the automatically granted UK trademark rights will be recorded in the UK trademark database and accessible online.]
- Renewals, priority, and seniority: the above corresponding registered UK rights will be treated as having the same renewal dates and filing/priority dates as the registered EU rights from which they derive and, in the case of trademarks, where appropriate, they will have the UK seniority of the corresponding EU trademark.
- Use: a corresponding UK trademark will not be liable to revocation on the grounds that the EU trademark from which it derived had not been put into genuine use in the UK before the transition expiration.
- Reputation: where an EU trademark has acquired a reputation in the EU by the transition expiration, the corresponding UK trademark can be enforced in the UK on the basis of that reputation. However, after the transition expiration, the continuing reputation of that UK trademark will be based on the use of the mark in the UK.
- Pending applications: where an application for an EU trademark or Community registered design is pending on transition expiration, this will not be converted into a corresponding UK application. However, within nine months of the transition expiration date, the applicant may apply for registration of the same trademark or design, maintaining the priority of the corresponding application for an EU right. The Withdrawal Agreement does not expressly deal with a Community registered design where publication is deferred, but it is likely that this will be treated on the same basis.
- International Registrations: The UK will take measures to ensure that international trademarks and design registrations designating the EU and protected in the EU before the transition expiration will enjoy protection in the UK. It is expected that International Registrations will be dealt with on the same basis as EU trademarks and Community registered designs and applications for these.
- Correspondence address: Owners of corresponding UK trademarks and registered designs acquired under the Withdrawal Agreement will not be required to have a UK correspondence address in the three years following transition expiration. It is likely that they will be entitled to retain the correspondence address for the relevant EU trademark or Community registered design (even if this is not in the UK).
- Pending court proceedings: in the UK, as well as in EU member states in situations involving the UK, with respect to legal proceedings instituted before the transition expiration, the jurisdiction provisions of the EU Trademark Regulation and the Community Design Regulation will continue to apply, regardless of when those proceedings are finalized.
- Enforcement: in the UK, as well as in EU member states in situations involving the UK, with respect to legal proceedings instituted before the transition expiration, the provisions regarding jurisdiction of the Recast Brussels Regulation will continue to apply, regardless of when those proceedings are finalized.
- Pending cancellation proceedings: if, after transition expiration, a registered EU trademark or Community registered design is declared invalid or revoked, as the result of proceedings ongoing at transition expiration, the corresponding UK trademark or Community registered design will also be declared invalid or revoked, unless the grounds for invalidity or revocation do not apply in the UK, in which event the UK will not be obliged to declare invalid or revoke the corresponding UK right.
- Exhaustion: IPRs which were exhausted both in the EU and in the UK before the transition expiration under the conditions provided for by EU law will remain exhausted both in the EU and in the UK. Where goods were put on the market in the European Economic Area or the UK prior to the transition expiration by the rights holder or with its consent, the relevant rights will remain exhausted in either territory.[ii]
Important Strategic Considerations for Trademark Portfolio Management and Monetization During and After the Brexit Transition Period
The European trademark system provides intellectual property protection in all EU member countries with one application. Because the UK will no longer automatically be included in the scope of protection of EU registrations after the Brexit transition period ends, it is important to contemplate strategic options relating to protection and monetization of your trademark portfolio.
One option is to file an EU application as soon as possible, as there is a about a year and a half until the expiration of the transition period. This leaves plenty of time to try and get a mark registered before the end of the transition period, allowing an applicant to automatically obtain UK registration rights with no extra application or fee. This seems like an obvious choice if the applicant had thus far delayed in applying in the EU. Further, even if an applicant’s EU mark does not register prior to the end of the transition period, the applicant can file a UK application within nine months of the end of the transition period to keep the original EU Priority date.
Also, an applicant should consider whether filing a separate national application in the UK in advance of the completion of the Brexit transition period would be beneficial. For example, such a filing could be beneficial if the UK is an important market for the applicant’s business.
In any case, if registration does not issue before the end of the transition period, a UK National application should be considered, and must be filed independently at that time. For example, if an applicant has an EU application date prior to January 1, 2021, the applicant could wait out the transition period in hopes that the registration will occur before it ends. Conversely, an applicant could go ahead and immediately file the UK National application separately to avoid any possibility of the original application failing to register before January 1, 2021 and keep the original priority date.
[i] https://www.inta.org/INTABulletin/Pages/Europe Update 7502.aspx