BREXIT : The impact on Trademarks & Designs
I. Brexit Process
June 23, 2016: UK people voted in order to leave EU (51,89%).
March 29, 2017: Prime Minister Theresa May triggered article 50 of the European Treaty, which is the formal mechanism for leaving the European Union.
There will be important elections in the EU this year that will have important consequences on the future EU policy directions and on the world order.
- The Exit Scenarii
Consequences of the exit of an EU Member State are unplanned and will highly depend on the way of the exit. So far, there are two main options:
- The “Norwegian model”: The UK would become a member of the European Economic Area (EEA) and of the European Free Trade Association (EFTA), meaning that the UK would still have access to the EU single market, would still be subject to the EU principles of free movement of goods, people and capital and to most of the EU legislations and CJEU case-law as well.
- The “WTO model”: the UK would rely on the World Trade Organization (WTO) rules, which would imply a total break from the EU as WTO rules would govern UK trade only. UK would recover sufficient sovereignty to make its own policies on matters previously regulated by the EU.
II. Impacts on Trademarks & Designs rights
- On already registered rights
Today, four post-Brexit scenarii can be foreseen:
- 1. EUTM and EURD would have no longer effect in the UK → loss of rights (very detrimental to the applicant),
- 2. A transition period to request the conversion of the rights (on the same basis as the already known conversion procedure) → costly and uncertainty due to new examinations,
- 3. An automatic conversion procedure to convert the EU rights into national rights at the renewal or during the validity of the rights → costly (payment of fees)
- 4. A mechanism for protection of acquired rights without examination or fees → most favorable scenario
Measures that can already be taken to face such insecurity for already registered trademarks and designs of main interest: filing a new application for a national UK mark or for a national UK design before the UKPO in order to secure the portfolio (keeping in mind that although registered, the “fresh” design shall be devoid of any novelty = for dissuasive effects towards the competitors only).
- Regarding new marks/designs to be filed before the Brexit is effective
For, likewise, trademarks and designs of main interest, the applicant could consider filing national applications before the UKPO, in addition to EUTM and EURD.
- New rights (post-Brexit)
As soon as the UK leaves the European Union, EUTM and REUD will have no longer effect in the UK and an applicant would have two options to cover the same area as before the Brexit:
- file an EU application and a national UK trademark/design,
- or file an international registration with designation of the European Union and the UK.
III. Impacts on other topics
- License and coexistence Agreements
As those agreements may provide for as “territory” the “European Union territory”, it will be necessary to redefine the actual scope of the Agreement.
- Use of the trademark
In the UK and in the EU, trademarks are subject to legal obligation of use implying that they must be used for the covered products and services within the last five years.
As a consequence, it is recommended for unused EUTMs in the UK to start use in the UK at once. With regard to EUTM used only in the UK, they must be urgently used in an EU member state.
Last but not least, the question of the exhaustion of rights will highly depends on the elected exit scenario (Norwegian or WTO model).
- IP litigations
UK Courts will cease to have jurisdiction over EUTM/EURD → litigation strategy will have to be carefully reconsidered.
Contact : Valérie GENIN-SAMSON
Publication date : May 2017