How to treat trade marks post-Brexit

There has been much speculation on the future of intellectual property law following the UK’s decision to leave the EU. As with so much to do with Brexit, the position remains unclear at present.

The purpose of this note is to consider only the possible implications for owners of EU-wide trade marks (EUTM). Note that some of the issues discussed here also apply to the EU-wide registration system for designs.

Since its inception in 1996 the EUTM system has allowed businesses, through a single application to a central registry, to register trade marks that cover all EU member states and has helped brand owners cost-effectively secure their rights across the EU marketplace.

There are currently over one million registered EUTMs and broadly the system has been considered a success. Obtaining EUTMs has been a popular choice for UK businesses, although the option remains of filing trade marks that are national in scope under the national trade mark registration systems of EU member states, such as that operated by the UK Intellectual Property Office (UKIPO).

The triggering of article 50 does not currently affect the status of EUTMs in the UK. EUTMs remain in force and are enforceable by the UK courts in the same manner as nationally registered UK trade marks.

However, while trade marks will, no doubt, form part of the ongoing Brexit negotiations, the current position is that once the UK leaves the EU in 2019, subject to any transitional arrangements, the EU treaties will no longer apply and EUTMs will no longer cover the UK. EUTMs will only remain valid in the EU states.

There has been much debate in the IP community as to how EUTMs should be treated post-Brexit. The Chartered Institute of Trade Mark Attorneys (CITMA) has outlined some of the many potential options. Some are based on historical precedent as to how trade marks were treated, such as when Ireland obtained independence from the UK and when Yugoslavia split into separate countries.

Indeed, CITMA recommends (in the absence of the UK remaining part of the EU) a ‘Montenegro model’ under which existing EUTM registrations would be automatically entered onto the UK trade mark register as UK trade mark registrations with the same scope of protection as the base EUTM. The benefits of this automatic approach appear to be simplicity, certainty, and low (or possibly no) cost for EUTM owners.

It is anticipated that the most likely solution is that a new UK trade mark will be created out of the EUTM to cover the UK only. That said, the precise details are unknown and issues such as whether the conversion process of EUTMs into national UK rights will be automatic or opt-in and whether a fee is payable to the UKIPO need to be decided.

Among the many other issues to be considered are how to:

• Align UK marks created out of EUTMs with UK national trade marks. To file a UK national application, it is necessary for there to be a bona fide intention to use the mark. EUTM applications do not require such an intention. Perhaps such intention could be deemed to be the case subject to challenge if the mark is enforced;

• Resolve whether an EUTM that has only been used outside the UK shall remain valid in the UK and whether EUTMs that have only been used in the UK shall remain valid in the rest of the EU; and

• Regulate the impact of Brexit on legal proceedings based on EUTMs. Transitional provisions will be needed to ensure the UK courts can grant remedies based on UK rights derived from EUTMs. Questions will also arise as to the scope of protection of existing judgments with EU-wide scope.

Geoff Smith is a partner and chartered trade mark attorney at HGF and a member of the Chartered Institute of Trade Mark Attorneys