As you know, the UK left the EU on 31 January 2020. Except in most ways it hasn't, really. As part of the Brexit process a transition period has been agreed until 31 December 2020, which is referred to as "IP Completion Day". Until 31 December 2020, the UK will remain subject to EU laws, and be treated as part of the EU, so not that much is going to change until 2021.
So what does this mean for your trade mark protection in the EU and UK? The first point to note is that EUTM registrations will still give protection in the UK until 31 December 2020 – and UK rights can still be used in EUTM proceedings until 31 December 2020. So for now Brexit will have no real effect on your trade mark protection in Europe – but there are of course a lot of things that you need to think about as IP Completion Day approaches, as set out below.
What happens to EUTM registrations?
For every EUTM registration in force at 31 December 2020 an equivalent UK "cloned" right will be created automatically on IP Completion Day. The same applies for EC designations of International Registrations. There will be no fee payable. Given this, applicants should try and ensure that their pending EUTM applications go through to registration prior to 31 December 2020 wherever possible.
The UK cloned right will retain the filing date of the EU-wide registration it is based on, taking into account any priority and/or seniority claims that might be relevant (so that the UK cloned right maintains the exact protection the EU-wide right it is based on currently enjoys in the UK). Any licences or security interests recorded against the EU-wide right will be maintained for the UK cloned right, so that the same limitations will apply too.
While it will be possible for owners to opt out of acquiring these cloned UK rights, that cannot be done in advance of IP Completion Day. Instead, if an EUTM owner does not want the cloned UK right, they will need to complete an opt out form after IP Completion Day (so technically the cloned rights will be created whether owners want them or not, but they can be cancelled). An example of where an owner might not want a UK cloned right is where this would be in breach of an existing agreement.
The UK cloned rights will keep their existing registration numbers, with the a prefix added depending on the type of registration: EUTM registrations filed directly at the EUIPO will have the prefix "UK009"; and EC designations of International Registrations will have the prefix "UK008". It should be noted the UK cloned rights created from EC designations will not form part of an International Registration – instead they will be standalone UK national rights so will need to be renewed independently of the International Registration they came from.
What happens to EUTM applications?
Where an EUTM application is pending as at IP Completion Day, an UK cloned right will not be created automatically. The same applies for EC designations of International Registrations where the registration process has not been completed at IP Completion Day.
Although no automatic UK cloned right will be created, there will be a nine month "grace period" (ending on 30 September 2021) within which UK equivalent rights can be applied for, claiming the filing / priority / seniority dates relevant to the EU-wide registration. No notification of this right to apply for an equivalent UK right will be sent to the owners of EU-wide applications, so this period will need to be monitored to ensure that the deadline isn't missed. The usual fees payable for UK trade mark applications will apply.
The timing of the UK application will need to be considered carefully. Normally applying quickly makes sense, so that a UK registration can be obtained as quickly as possible, but there will be circumstances in which there will be a benefit to slowing down this process.
When do UK cloned rights needed to be renewed?
This all depends on the renewal date of the EU-wide registration the UK cloned right is based on.
Where the renewal date of the EU-wide right falls on or before IP Completion Day, then presuming the EU-wide registration has been renewed by IP Completion Day the UK cloned right will not need to be renewed until the next renewal of the EU-wide right. For example, if there is an EUTM registration with a renewal date of 30 December 2020 and that is renewed before IP Completion Day, both the EUTM registration and the UK cloned registration will have a next renewal date of 30 December 2030.
Conversely, where the renewal date of the EU-wide registration falls after IP Completion day, a renewal fee will need to be paid to maintain the UK cloned right. This is the case whether or not the EU-wide registration has been renewed prior to IP Completion Day. For example, if there is an EUTM registration with a renewal date of 2 January 2021, a renewal fee will be payable for the UK cloned right, even if the EUTM registration was renewed before 31 December 2020.
Where the renewal date of the UK cloned right falls between 1 January 2021 and 30 June 2021, a renewal reminder will be sent giving six months to pay the renewal fee for the UK cloned right. The renewal reminder will be sent on the renewal date of the UK cloned right, so that owners will have an additional six months to renew those cloned registrations without payment of any late renewal fee. This will need to be taken into account when clearance searches are being carried out in the UK during all of 2021.
What happens to oppositions and cancellation actions?
Brexit will have little effect on ongoing UK oppositions or cancellation actions. This is because the rights relied on, whether UK or EU-wide, will still give protection in the UK after IP Completion Day. The only exception to this is if an action is based on a pending EUTM application, where a cloned right will not be created automatically. These oppositions are likely to be suspended until a new UK application is filed and makes its way through to registration.
Brexit will however have an impact on existing EUTM oppositions and cancellation actions. Where an action is based solely on UK rights, the action will continue as normal during the transition period. However, if it becomes clear that no decision is going to be reached in the proceedings before IP Completion Day, it is expected that the proceedings will be suspended (as happened for a period last year when a "no deal" Brexit seemed a possibility). As a result of this, there are various tactical considerations that both parties need to consider where they are engaged in EUTM oppositions or cancellation actions based on UK rights.
In addition, where there is a pending cancellation action against an EUTM registration as at IP Completion Day, it is expected that the result of that action will affect the UK cloned right. As a result, if an EUTM registration is deemed invalid or is revoked then the UK cloned right will equally be deemed invalid. This should not affect the right to convert the EUTM into a UK national right, but there is no clarity as to exactly how this will work at the time of writing.
Where an opposition or cancellation action is filed against an EU-wide right after IP Completion Day, that will not affect the UK cloned right arising from the EU-wide right (whether automatically created or as the result of an application for an equivalent right as detailed above). This means that, if the UK cloned right is to be attacked, separate proceedings will need to be brought in the UK. For this reason, rights owners should consider whether it makes sense to file cancellation actions against EU-wide rights before or after IP Completion Day – this will depend on the circumstances and the rights that can be relied on.
Does use and reputation in the UK count as use in the EU, and vice versa?
Use in the UK counts as use in the EU until IP Completion Day. For example, let us suppose that there is an EUTM registration for which the only use made is in the UK. That use is very substantial and is sufficient to maintain the EUTM registration right up to IP Completion Day. If a non-use action is filed against the EUTM registration, the use made in the UK will be taken into account until 31 December 2020. This means that the EUTM registration cannot be revoked for non-use, even if the mark has only ever been used in the UK, until after 31 December 2025 (i.e. five years after the UK use stops being taken into account).
In the same way, use in the EU until IP Completion Day will be taken into account when assessing the use that has been made of a UK cloned right. For example, a UK cloned right is created from an EUTM registration for which there is extensive use in France, Germany and Spain right up to IP Completion Day. If a non-use action is filed against the UK cloned right, the use made in those countries will be taken into account until 31 December 2020. This means that the UK cloned right cannot be revoked for non-use, even if the mark has never been used in the UK, until after 31 December 2025 (i.e. five years after the use in France, Germany and Spain stops being taken into account).
The same considerations apply for reputation: this will be taken into account right up to IP Completion Day in both UK and EU proceedings as detailed above for use.
This note does not intend to cover every trade mark related issue that Brexit creates and more guidance will be given over the coming months.
This article is part of our Brexit series