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Joint statement to European Commission on trade marks and designs post-Brexit

A group of organisations representing the interests of rights holders and intellectual property (IP) practitioners across the EU has submitted a joint statement to the European Commission on the treatment of trade marks and design rights post-Brexit.

This follows the recent publication of the Draft Withdrawal Agreement between the EU and the UK dated 28 February 2018, and the Notice on the Withdrawal of the UK from the EU – EUTMs and RCDs, issued on 1 December 2017 and 22 January 2018, and is largely in line with the Commission’s position paper on IP dated 6 September 2017 (which I wrote about in an earlier post, EU vision for intellectual property rights post-Brexit).

Representatives of rights holders and IP practitioners make recommendations to Commission

The group is comprised of seven organisations including MARQUES (whose November 2017 position paper I considered in an earlier post, MARQUES calls for urgent clarity on intellectual property rights post-Brexit), the European Brands Association (AIM), the Chartered Institute of Trade Mark Attorneys (CITMA) and the International Trade Mark Association (INTA).

Their statement expands upon a meeting between the group and the Commission in June 2017, at which the Commission invited the organisations to highlight and propose solutions to the main challenges posed by Brexit for European trade mark registrations (EUTMs), registered Community designs (RCDs) and unregistered Community designs (UCDs).

At the meeting, the group proposed that Brexit negotiations on IP issues be guided by the general principles of minimum disruption, minimum cost and maximum retention of rights.

The statement, dated 23 March 2018, begins by reminding the Commission of those principles, which the group considers to be important for businesses and legal practitioners both within and outside of the EU; and by proposing additional principles of maximum transparency – including consultation of users on potential solutions – and wide publication of any changes to the IP system – to ensure businesses are informed and have sufficient time to take action.

The statement notes that many of these principles are already included in both the Committee’s position paper and the Draft Withdrawal Agreement; and goes on to set out some high level thoughts on the Commission’s proposed agenda for IP rights.

Novation of existing registered EU IP rights

In relation to existing EUTMs and RCDs,  the group agrees with the Commission that these should be automatically entered onto the UK Intellectual Property Office (UK IPO) registry as UK registrations with the same scope of protection, registration date and, where applicable, priority and seniority. This automatic cloning, or novation, of EU rights into national UK rights will benefit both businesses and consumers by preventing rights holders from having to take any direct action themselves.

The group is keen to obtain some form of reassurance from the UK IPO that it will be able to cope with the administrative burden of this process which will be great, particularly in the months immediately prior to and following Brexit. I mentioned in an earlier post that the EUIPO database currently holds in excess of one million registered trade marks, at least double the number held by the UK IPO. Similarly the EUIPO holds in the region of 700,000 registered designs, whilst the UK IPO only holds around 40,000. It is vital that the UK IPO is well prepared.

In relation to other aspects of IP, such as geographical indications (also considered in my earlier post) and plant varieties, the group goes no further than flagging that certain EU Regulations will require consideration, and that additional UK legislation may need to be implemented.

Treatment of pending EUTM and RCD applications 

As for EUTM and RCD applications that are pending at the time of Brexit, the group sees the Commission’s options as being either:

  1. The European Intellectual Property Office (EUIPO) continues to process the applications until registration, treating the territory of the EU for the purposes of the applications as being as constituted on the filing date (so including the UK) – in which case the applications would need to be searchable on the UK register during the examination period to ensure interested third parties are put on notice of their potential existence as national UK rights; or
  2. The applications are carved up on Brexit day, with the UK IPO deciding upon the UK element, and the EU IPO continuing to examine the remaining EU part.

The first approach is in line with that proposed by MARQUES in its November 2017 position paper, in which it suggested that applications pending at the EUIPO at Brexit should only be novated into national UK rights after completion of the normal steps for acceptance onto the EUIPO register.

In either case, the group suggests that the applications should be automatically cloned in the UK, so a corresponding national UK right should appear on the register without any step or payment having to be made by the applicant, with the possibility of opting out should the applicant not want or need UK protection.

The statement does not mention the treatment of applications that are the subject of a challenge pending at Brexit, and it does not consider whether opposition,  cancellation or infringement proceedings can be commenced in the UK in relation to registered EUIPO rights that are going through the process of novation into equivalent national UK rights.

Unregistered design right more complex

The position in relation to UCDs is less straight forward. The UK already has its own system for protecting UK unregistered design right (UKUDR) as set out in the Copyright, Designs and Patent Act 1988 (CDPA). However, fundamental differences between the scope and requirements of the UCD and the UKUDR prevent the UKUDR from being an appropriate replacement for UCDs in the UK post-Brexit.

The group recommends instead that the UK creates its own national version of the UCD, separate to the UKUDR, so that, as with EUTMs and RCDs, existing UCDs can simply be cloned onto a national UK registry at Brexit, benefiting from comparable UK protection for the remainder of their three year term.

How this UK UCD might sit alongside the UKUDR would require careful thought and perhaps precipitate an overhaul of unregistered design right protection in the UK.

Assessment of genuine use of registered trade mark post-Brexit  

At present, genuine use of an EUTM in a single member state is potentially sufficient to maintain an EUTM registration. From the date of Brexit, any UK registration originating from an EUTM will be subject to a use requirement under UK law. However, the group suggests that:

  • For a period of five years from Brexit, any genuine use of an EUTM before that date that would be considered genuine use of the ongoing EUTM by the EUIPO should also constitute genuine use of the resulting UK trade mark, even if such use would not usually be deemed sufficient for maintaining an equivalent national UK trade mark; and
  • Conversely, any genuine use made in the UK of an EUTM within the five years before Brexit should be considered genuine use in the EU of that EUTM, even if the decision on such use is made post-Brexit.

Exhaustion and enforcement of IP rights

Notwithstanding that there may not be the general principle of free movement of goods for customs tariffs post-Brexit, the group notes that:

  • In relation to the exhaustion of rights, given that the matter may be treated differently in the EU27 and the UK, both sides could agree specifically that the rules relating to exhaustion apply to goods moving between the EU and the UK; and
  • In relation to enforcement, it remains in the interests of the EU27 and the UK to have a common customs system to counter the trade in counterfeit and pirated goods between their territories, and so both sides should agree that existing EU Regulations concerning customs and enforcement of IP rights will apply, mutatis mutandis. This should mean that one Application for Customs Action can still be filed to cover the EU27 and the UK.

IP litigation, existing contracts and .eu domains

The statement is silent on a number of additional topics of interest to rights holders and IP practitioners alike in the run up to Brexit.

These include the matters of pending litigation involving registered EU rights (in particular, pan-EU injunctions, invalidity and revocation counter-claims, and references to the Court of Justice of the European Union); the interpretation of references to the EU in contracts formed pre-Brexit (and the possibility of legislation being adopted to provide certainty around the approach, once agreed); and potential solutions for registrants of .eu domain names without a place of business within the EU27 for the purposes of maintaining their domain registrations.

The statement does, however, end by noting that some of the organisations in the group have their own additional, more detailed recommendations, which they will submit separately to the Commission. It is perhaps in these additional submissions that greater detail on all of the above, and perhaps insights into these other topics, will be provided.

Additional Practical Law Brexit and IP resources

For an extensive range of Practical Law resources on the legal implications of Brexit, see our Brexit landing page, and for materials relating specifically to IP and Brexit (including practice notes, recent hot topic articles, and current legal updates), see Brexit materials: Intellectual property and life sciences.

 

Jennifer Phillips

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