Brexit has happened - what you need to know about the impact on trade marks

Kate O’Rourke sets out the principles for UK and EU trade mark protection which came into force with the end of the Brexit transition period on 31 December 2020.

The Brexit transition period ended on 31 December 2020 at 11 pm UK time. In advance, a trade deal was agreed between the UK and the European Union, but this did not directly affect the protection of trade mark applications and registrations. The agreed overall principles for ongoing protection were set out in the European Union (Withdrawal) Act 2018 and since then the UK IPO and the EUIPO have issued extensive guidance on the practicalities to help trade mark owners and their representatives prepare for business after 1 January 2021.

Although there has been clarification of much of the detail, there are still questions to be answered on how the changes to the law will work out in practice.

Impact on registrations

From 1 January 2021, granted EU Trade Marks (EUTMs) and protected EU designations of International Registrations (IR(EU)s) of trade marks no longer cover the territory of the UK. EUTMs and EU designations continue to protect the rest of the EU (27 Member States) only.

Holders of EUTMs and IR(EU)s as of 1 January 2021 were given a fully equivalent national UK right at no official cost, no forms were needed to be filed, and there will be no re-examination. This means that if you owned 10 EUTMs on 31 December, as from 1 January you owned 10 new UK registrations plus the existing 10 EU registrations. The UK ‘comparable’ registrations retain the original filing, priority, and UK seniority dates and the first renewal dates will be the same as the original EU registrations.

No UK certificate of registration will issue but details are available on the UK IPO online register.

The registration will be treated as if it had been registered under UK law, will be fully independent from the EU right, and will be able to be challenged, assigned, and licensed separately from the original EU right.

The key issue to remember with any IR(EU)s is that they have not become UK designations of the International Registration – the UK comparable marks are national UK registrations.

New numbering systems

All EUTMs for which an equivalent UK right was generated post-Brexit are listed with a ‘UK009’ prefix ahead of the last 8 digits of the EUTM number, to identify these rights from existing UK registrations and enable a clear link to the “parent” EU registration.

For EU designations of International registrations, the new numbers contain the last 8 digits of the International trade mark prefixed with ‘UK008’.

Impact on applications

Any EUTM application or pending IR(EU) no longer covered the UK as from 11 pm on 31 December 2020.

These EUTM applications and EU designations will proceed only in relation to the rest of the 27 Member States of the EU.

Applicants for EUTMs that were pending at the end of the transition period have nine months (until 30 September 2021) to reapply for the equivalent UK rights. The usual fees and forms will be required, but the original filing, priority, and any UK seniority dates will all be retained.

The application must cover identical or more restricted goods and services and the re-filed UK application will be examined and prosecuted in the usual way.

Owners of pending IR(EU)s cannot re-file as a new UK designation of the IR – any new application will be a national application. Owners will still be able to subsequently designate the UK under the IR in the usual way, however doing so will not maintain the original filing, priority, and seniority dates of the IR(EU).

The UK IPO has provided space on the application form to insert details of the ‘parent’ EU right, including the priority and seniority dates. However, the new re-filed UK applications will not be given an application number that indicates the relationship with the parent EU application.

Seniority claims

From 1 January 2021, the seniority concept will also apply to a UK comparable right which derives from an EUTM or IR(EU) that itself claims seniority of an earlier UK trade mark.

The original UK right on which the EUTM’s seniority claim was based will not be revived. Seniority claims based on earlier UK or IR(UK) trade marks will automatically be recognised.

Genuine use

Genuine use of an EUTM or IR(EU) protected mark in the EU27 countries will continue to be recognised to support the validity of the comparable UK registration. Therefore, even if a mark has not been used in the UK for more than 5 years before 31 December, the new comparable UK registration will not automatically be vulnerable to cancellation for non-use. However, use of a mark in the EU after 1 January 2021 will not be taken into account.

Use of a mark in the UK before 31 December will also be valid to help defend a non-use cancellation action against the remaining EU registration.

The significance of this use will likely decrease over time, depending on the extent to which it covers the relevant five-year period.

From 1 January, use of EUTM and IR(EU) protected marks in the UK (including for export purposes) will no longer qualify as use in the EU.

Renewals

All registrations

EUTM renewal fees paid before 1 January 2021 will only also cover the UK comparable trade mark if the renewal date pre-dates that day.

If the EUTM renewal date is after 31 December 2020, then the renewal fee for the UK comparable mark has to be paid separately to the UK IPO.

Early renewal of an EU registration that is not due to be renewed until after 1 January 2021 will not result in the new UK registration also being renewed. The UK IPO has also created new registrations from any EU registration which expired in the six months prior to 1 January 2021.

These UK rights will have an “expired” status but if the original EU registration is renewed within the late renewal period, that renewal will also renew the new UK registration and you will not need to pay a separate UK renewal fee. If the expired EU registration is not late-renewed, the newly created comparable UK registration will be removed from the UK Register on the date of expiry of the original EUTM’s late renewal period, but with effect from 1 January 2021.

EUTM-derived registrations

The first renewal date for comparable UK marks derived from EUTMs will be the same as the renewal date of the corresponding EU right.

For the purposes of future renewal, the UK comparable trade mark retains the renewal date of the corresponding EU registration.

International-derived registrations

The UK renewal date for comparable marks that are derived from an IR(EU) will depend on whether the EU was designated at the outset or subsequently.

If the EU was designated at the outset of the IR, the first renewal date for the comparable UK mark will be the existing renewal date of the corresponding IR.

But, if the comparable UK right is created from an EU subsequent designation, the comparable mark will adopt the date of that subsequent designation for the purpose of future renewal.

This means that a comparable UK right derived from a subsequent designation will have a different expiry date from that recorded against the corresponding international registration.

The late renewal of the IR at WIPO will have the effect of automatically renewing the expired comparable UK trade mark, but the owner must then inform the UK IPO that the corresponding IR has been late-renewed at WIPO.

Failure to notify will result in the comparable mark being removed from the UK register and treated as if it had never been applied for or registered under UK law.

Opting out

It is possible to “opt-out” from ownership of a new comparable UK mark in certain circumstances. The UK IPO has created a notice template that must be used.

Notice to interested third parties must be given for opt-out to have effect.

If the UK IPO determines that an opt-out right has been exercised in circumstances where it was not permitted, the comparable UK trade mark may be reinstated if the equivalent or comparable UK trade mark was removed from the register.

Opposition proceedings

The EUIPO has issued a practice note stating that pending EUIPO opposition proceedings against EUTMs / IR(EU)s that are based solely on earlier UK rights will be dismissed as of 1 January 2021 and each party will be ordered to pay their own costs.

In contrast, the UK IPO has indicated that pending UK IPO opposition proceedings based on earlier EUTMs / IR(EU)s will continue to be heard in line with the law applicable prior to 1 January 2021.

The EU right will be treated as a valid earlier right until the proceedings conclude. However, any actions or remedies taken or granted will only apply to the comparable UK right.

Cancellation proceedings

Similarly, the EUIPO has stated that pending EU cancellation proceedings that are based solely on earlier UK rights will be dismissed as of 1 January 2021 and each party will be ordered to pay their own costs.

And again, the UK IPO has indicated that UK cancellation actions based on earlier EUTMs or IR(EU)s will continue, although any actions or remedies taken or granted will only apply to the comparable UK right.

Comparable UK rights were created from EU rights that werethe subject of ongoing cancellation proceedings at Exit Day. However, if the parent EUTM or IR(EU) is declared invalid, revoked or cancelled in the EU as the result of an action that was ongoing on 31 December 2020, the comparable UK right will also to be declared invalid, revoked or cancelled to the same extent.

The date of effect of the revocation, cancellation or invalidity in the UK will be the same as for the EU right.

This means that separate cancellation actions will not need to be launched against the comparable UK right after 1 January 2021.

However, the cancellation will not have effect on the comparable right if the grounds aren’t applicable in the UK. For example, if an absolute grounds cancellation action is based on descriptiveness in Greek, or a relative grounds invalidity is based solely on Latvian earlier rights.

Assignments, licenses, and security interests

Where an EU right was the subject of an assignment before 1 January 2021 that was not been recorded in the EUIPO register, the comparable UK trade mark will be created in the name of the assignor.

From 1 January 2021, the assignor or the assignee has the right to request that the new proprietor be recorded against the comparable UK trade mark. If requested by the assignee, appropriate corresponding evidence will need to be provided to the UK IPO.

Any license or security interest recorded against an EU right will continue to have legal effect in the UK. It will be treated as if it applies to the comparable UK trade mark, but it will not be recorded in the UK register. However, UK law does not require that transactions are registered per se.

Enforcement

From 1 January 2021, UK rights cannot be enforced against EU rights. Equally, EU rights cannot be enforced against UK rights.

For UK proceedings initiated after 1 January 2021, EUTMs and IR(EU)s will no longer be considered valid earlier rights.

From 1 January 2021, UK courts no longer have jurisdiction to hear new cases relating to infringement of EU rights. Enforcement of an EU right brought in an EU court will also no longer be effective in the UK.

Therefore, separate actions will be needed if there is infringement in both the EU and the UK.

An existing injunction in place before 1 January 2021 that prohibits actions in the UK which would infringe an existing EUTM or IR(EU) will be treated as if it also applies to the comparable UK trade mark.

From 1 January 2021, any new pan-EU injunctions will only apply to the EU territory (not in the UK or in relation to the comparable UK right).

Future decisions by the Court of Justice of the EU (CJEU) will no longer apply directly to the UK, but could still be relevant given the common provisions in the legislation.

UK courts will have the ability to divert away from EU trade mark principles established by the CJEU. The UK government recently decided that the Courts of Appeal in the UK as well as the Supreme Court will have the power to overturn previous decisions of the EU (CJEU).

Management of international registrations

From 1 January 2021, if the owner of an IR subsequently designates the UK under an International Registration that prompted the creation of a comparable UK right then they can request that the new IR(UK) ‘replace’ comparable UK right.

The owner may request the UK IPO to take note of this replacement in the UK Trade Marks Register. This would allow the owner to regain the advantages of centralised management.

Where protection results from multiple designations of the EU under international registration (e.g. a designation made in the international application and a subsequent designation), a comparable UK right will be created for each designation.

Owners may therefore hold multiple comparable UK trade marks corresponding to a single IR. In any such cases, the UK IPO will identify the multiple UK comparable rights by replacing the initial ‘1’ in the international registration number with a ‘2’ for the subsequent designation.

When an IR(EU) is based on a UK registration, the owner could effectively obtain duplicate protection once the new UK comparable mark is created.

Representation

UK representatives can continue to represent their clients before the EUIPO in ongoing cases at the end of the transition period. This right of representation will continue for all proceedings before the EUIPO, including any appeal to the Boards of Appeal.

This includes the prosecution of EU rights (and oppositions that may arise after 1 January 2021), as well as the handling of contentious matters such as oppositions or cancellations.

However, UK attorneys will be not be able to act on new matters/filings at the EUIPO.

The EEA representative will be copied over onto the UK register from the parent EU right (where one has been appointed) for the comparable UK registration.

Owners of comparable UK registrations will not be required to have a correspondence address in the UK until at least 1 January 2024, except in relation to those marks derived from IR(EU) registrations.

However, any new applications filed from 1 January 2021 will require an address for service in the UK, Gibraltar or the Channel Islands. This includes applications which are re-filings of pending EU applications.

Unresolved questions

While much of the detail has been determined, there are outstanding queries on a number of key points:

• The EUIPO decision to dismiss proceedings against EUTMS based on earlier UK rights could be subject to a legal challenge. Certainly, the UK IPO is taking a contrary view and it may need a decision of the CJEU to clarify, although this could take several years and may potentially mean that proceedings left dormant for a number of years will then be revived.
  
  
• If an opposition against a pending UK application was filed prior to 1 January 2021 but is based on a pending EUTM application, will it be necessary to file a new opposition (or cancellation even, if the opposition period has elapsed) referring to the re-filed UK application? Or will it be possible for the opponent to simply ‘perfect’ the basis of the opposition in order to keep the existing proceedings moving forwards?
  
  
• If an EU registration is restored, will the UK IPO automatically update their records or will the onus be on the owner to notify the UK IPO?
  
  
• Will territory clauses referring to the EU in agreements entered into before 1 January 2021 be deemed to have continued cover in the UK (assuming that the clause or agreement in question did not anticipate the possibility of Brexit)?
  
  
• Will search companies automatically include pending EU applications in UK searches up until 1 October 2021, in order to ensure that the possibility of third parties re-filing pending EU rights as UK applications is captured?

Further guidance and practice notes are expected from the UK IPO and the EUIPO in the coming weeks and we hope they will clarify some of these issues.

For more on Brexit and what it means for trade marks, see our Q&A and our webinar recording.