Brexit – where to next for your IP Rights in the EU and UK?

5 February 2020
Kerry Awerbuch, Partner, Melbourne Hazel McDwyer, Partner, Sydney

After years of debate, tears and cheers, the UK’s Withdrawal Agreement Act 2020 received its Royal Assent on 23 January and as of 11pm on 31 January 2020, the UK officially left the EU after 47 years. The UK has now entered a transition period (Transition Period) until 31 December 2020 (Exit Day), where EU law will continue to apply to the UK. However, the UK will no longer have a say in EU policy or legislation. It is possible that the Transition Period could be extended, however, this looks unlikely, given the UK government’s position on an extension.

So where does this leave IP rights now and what should IP owners be considering during the Transition Period? The good news is that we are no longer in ‘Hard Brexit’ territory, so the transition is to some extent more predictable since there is the Withdrawal Agreement. The UK will still need to negotiate a trade deal with the EU, which may impact on IP rights, but this is yet to be seen.

The following table provides a general summary of the impact of Brexit on IP Rights after the expiry of the Transition Period and what to do next.

IP Right ImpactWhat to do?
Registered EU trade marks (EUTMs) and EU Community designsAfter Exit Day, EUTMs and Community Designs will no longer have effect in the UK.

However, for all EUTMs and Community Designs which are registered up to Exit Day, the UK will automatically create a corresponding UK trade mark (UKTM) or UK Design at no charge.

The UKTMs and UK Designs will have the same filing/priority dates and renewal dates as the corresponding EUTMs and registered Community Designs.
After the expiry of the Transition Period, check all registered corresponding UKTMs and UK Designs to ensure that the details accurately correspond with the EUTM and EU Design.

Update internal databases with the new UKTMs and UK Designs and their renewal dates.
Unregistered Community designsAny unregistered Community designs in existence up to Exit Day will have the same level of protection in the UK, with a term of protection to be at least equal to the remaining period of protection of the corresponding unregistered Community design. EU unregistered Community designs have a 3 year protection period from first disclosure in the EU.

The UK will introduce a similar unregistered design right.

After the end of the Transition Period, to take advantage of the EU wide protection, consideration should be given as to how and where such first disclosure of a novel design (e.g. for a clothing retailer or designer) takes place. However, if the UK market is the most important market for the designer, first disclosure in the EU after Exit Day may destroy novelty in the design for the UK.
Pending applications for EUTMsPending EUTM applications will not automatically be created as UKTM applications. However, an applicant may apply for a corresponding UKTM in the UK, within 9 months of Exit Day and maintain the priority date of the corresponding EUTM. Diarise the 9 month deadline to file the corresponding UKTM.

To avoid potentially missing the end of the 9 month deadline, consider filing separate corresponding UK trade marks now, at the same time as filing the EU trade mark, in case the EU trade mark is not registered by Exit Day.
Non-useA UKTM will not be liable to revocation on the ground of non-use if the corresponding EUTM was not put into genuine use in the UK prior to Exit Day. While use is not required in the UK prior to Exit Day, this does not apply after Exit Day, so ensure that UKTMs are put to genuine use in the UK and also that EUTMs are used in the EU after Exit Day.
ReputationWhere an EUTM has acquired a reputation in the EU prior to Exit Day, the owner will be able to enforce the corresponding UKTM based on the EUTM's reputationEnsure that records of reputation of EUTMs prior to Exit Day are kept on file in case they are required for enforcement in the EU or UK.

If possible, start to build the reputation in the UK prior to Exit Day.
International trade marks The UK will take measures to ensure that international trade marks and designs designating the EU, which have obtained protection before Exit Day, will enjoy protection in the UK. After the expiry of the Transition Period, check all protected international trade marks and designs, which designated the EU are recorded on the UK Registers.
Patents As the European Patent Organisation is not part of the EU, European patents are largely unaffected by Brexit.

However, Supplementary Protection Certificates for pharmaceutical products as well as plant protection products emanate from the EU Regulations, which currently apply in the UK.

It is likely that the UK will enact similar regulations regarding SPCs in the UK, but the extent of such regulations remains to be seen.
Consider if any SPC applications should be filed prior to Exit Day.
IP contracts referring to the EU As of 31 January 2020, the UK is not part of the EU. Therefore, references to the EU in agreements, such as IP licences should be considered. For new agreements, such as brand licences, ensure that the UK is listed separately to the EU, if it is to form part of the relevant territory.

For existing agreements, check the definition of the European Union. It may refer to the European Union as constituted by its member states from time to time or it could have a general reference to simply the European Union. This could affect the interpretation of the provision which could be significant for an IP licence.

Consider a simple variation to existing licence agreements to ensure that the references to the EU specifically include the UK, if this was the intention.
Pending court proceedings If court proceedings have commenced in the EU or UK prior to Exit Day involving EUTMs or Community Designs rights in the UK, the EU regulations will continue to apply, even if the proceedings are finalised after the end of the Transition Period. Consider whether to commence proceeding in such matters prior to Exit Day.

After Exit Day, EU court decisions would not cover the UK, so separate proceedings would be required.
Pending cancellation proceedings If an EUTM or Community Design is declared invalid or revoked in the EU as the result of an administrative or judicial procedure which was ongoing on Exit Day, the corresponding UKTM or UK Design will also be declared invalid or revoked.

The date of effect of the declaration or revocation or cancellation in the UK will be the same as in the EU.

However, if those grounds of revocation of cancellation do not apply in the UK, the UK will not be obliged to make such a declaration.
Try to finalise any cancellation proceedings, if possible prior to Exit Day.
Exhaustion of rights Exhaustion means that an IP rightsholder may not prevent the movement of goods within the EEA if the rightsholder put such goods on the market in the EEA or gave permission to do so.

IP rights which were exhausted both in the EU and in the UK before Exit Day under EU law will remain exhausted both in the EU and UK.

The UK's 2019 SI on Exhaustion of Rights provides that IP rights with respect to goods put on the market in the EEA will be exhausted in the UK after the Transition Period. However, unless there is an agreement with the EU, there is currently no reciprocal provision in place with respect to exhaustion of rights in the EU, if goods are put in the market in the UK.
After Exit Day, if goods are placed on the UK market by, or with the consent of, the IP right holder, such rights may not be considered exhausted in the EEA.

Parallel importers will therefore have to consider whether they will need the EEA IP rightholder's permission to export goods from the UK to the EEA.

IP rightholders will need to consider whether they want to allow parallel exports of their IP protected goods from the UK to the EEA after Exit Day.

What is clear is that some areas remain uncertain. If it has not already been carried out, now is the time to audit IP rights in the EU and UK.  We recommend agreeing an agenda which includes the following:

  • Determine what EU and UK IP rights are held or contested.
  • Understand which transitional provisions apply to the relevant IP rights.
  • Ensure the transitional provisions are correctly applied following 31 December 2020.
  • Review all EU agreements and amend or vary as appropriate to ensure the UK is appropriately taken into account.

 


Authored by:

Hazel McDwyer, Partner
Kerry Awerbuch, Partner

 

 

This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.

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