What impact will Brexit have on EU Trade Marks?

We have previously reported on the possible impact of Brexit on Intellectual Property (IP), most recently on 8 August 2016 following the publication of a (short) guidance note by the Intellectual Property Office. The reality is that at present it is difficult to say how most sectors or industries will fair following Brexit, or to predict the procedural formalities that will dictate the same. However, one area of IP which will almost certainly be affected is the European Union Trade Mark.

The UK's decision to leave the European Union will alter the way that Europe Union Trade Marks are protected in the United Kingdom.

The current EU Trade Mark Regulation is silent regarding what will happen if a member state leaves the union and additional legislation is required to ensure that existing EU Trade Marks continue to cover the UK. Further issues will arise if more EU countries decide to leave the EU in the future.

The Institute of Trade Mark Attorneys (ITMA) have set up a task force to work with Baroness Neville Rolfe, the Minister for Intellectual Property, to consider the issues arising following Brexit.  The two key areas of concern to the ITMA task force are how EU Trade Mark and EU Registered Designs will continue to be protected in the UK and how UK practitioners' rights to represent applicants before the European Union Intellectual Property Office will be affected.

UK Trade Mark attorneys will no longer be entitled to represent applicants when filing an EU application, unless the UK joins the European Economic Area (EEA).  Members of EEA countries have recently been accepted to file EU trade mark applications.

Conversion

It is likely that a process will be put in place to allow EU Trade Marks to be converted into UK Registrations.  This could involve owners of EU marks being asked to opt in if they wish to convert the mark to the UK.

It is currently possible to convert an EU Trade Mark application or registration if it is refused due to an earlier right or on the grounds that it is descriptive.  In these circumstances the applicant can apply to convert the mark into countries where there is no objection. A fee is paid on application and the mark is re-examined in accordance with national law standards.

There is some concern that converting the mark into the UK will leave the remaining EU mark vulnerable to revocation from the register for non-use.  An EU trade mark is a unitary right and the registration is vulnerable to attack for non-use if it has not been used for a continuous period of five years or more.  The use of the mark in one member state of the EU is often sufficient to validate this use which was shown in the General Court in case number T-278/13 in London and the Thames Valley.  Conversion will also incur further cost to the applicant.

Applicants will now need to consider the impact of Brexit when deciding on a filing strategy for new trade mark applications.  If the applicant is interested in the UK and at least two other countries in the EU then there is currently still a cost advantage in filing an EU mark.  However, this should be weighed up against the high opposition risk when filing an EU trade mark due to the number of potential earlier national rights in the 28 member states.

Following the departure from the EU applicants will need to file a UK national application at the UK Intellectual Property Office or designate the UK in a Madrid Protocol application which, in effect, results in subsequent national applications being filed.

Another issue that that EU trade mark owners may also need to consider are contractual agreements such as licences, franchise agreements and co-existence agreements.  The agreements will need to be reviewed and updated so that they continue to have their intended effect in the UK.

Article 50 of the Lisbon Treaty triggers a 2 year minimum period for the UK's withdrawal from the EU.  The terms of the withdrawal will require lengthy negotiations.   Therefore, applicants have time to review their existing agreements and reconsider a filing strategy when considering new marks.

If you have any questions on trademark strategy following the referendum result please do not hesitate to contact the team at McDaniel & Co. on 0191 281 4000 or legal@mcdanielslaw.com.