Brexit: The transition period & IP rights

With the end of the Brexit transition period fast approaching, we consider the implications for intellectual property rights arising from the UK's exit from the EU and the expiry of the transition period, particularly in relation to unitary EU intellectual property rights, i.e. EU trade marks, registered Community designs and unregistered Community designs.

Summary of the Changes

Trade Marks and Registered Designs

Automatic creation of a UK right for every registered EU trade mark or design.

Unregistered Designs

Automatic creation of a UK right (unregistered Community design rights will no longer be valid in the UK).

Representation

UK attorneys will no longer be able to represent clients on new applications or proceedings to the EUIPO at the end of the transition date, and IP owners will be required to supply a UK service address for new patents, registered designs and trade mark applications (and new contentious proceedings) to the IPO.

Exhaustion

Potential for parallel exports from the UK to the EEA being stopped by IP rights holders.

Background: The transition period

On 31 January 2020, the UK ceased to be a member of the EU and entered into a Brexit ‘transition period’, sometimes referred to as the ‘implementation period’. During this period, the UK is treated for most purposes as if it were still an EU member state; and most EU law continues to apply to the UK. In addition, all the usual EU supervisory, judiciary and enforcement mechanisms, including the jurisdiction of the Court of Justice of the European Union, continue to apply during this transition period. The transition period provides businesses and consumers with some time to prepare for the impact of Brexit. In relation to intellectual property, its main aim is to prevent any loss of rights that would otherwise flow from the UK’s departure.

From the end of the transition period (1 January 2021), EU law will no longer apply in the UK. Section 39(1) of the European Union (Withdrawal Agreement) Act 2020 defines 11pm on 31 December 2020 as “IP completion day” – meaning “implementation period completion day”.

Britain’s exit from the EU will have important implications for holders of unitary EU intellectual property rights, particularly in relation to European Union Trade Marks (EUTMs) and Registered Community Designs (RCDs). Businesses and consumers should have been utilising the transition period to review their existing EUTMs and RCDs to ensure that they are prepared for the end of the transition period.

New UK IP rights

Currently, EUTMs and RCDs provide protection in each member state of the EU, including the UK but from 1 January 2021, EUTMs and RCDs will no longer cover the UK.

The good news is that there will be no loss of rights in the UK. On 1 January 2021, the UK Intellectual Property Office (UKIPO) will automatically create comparable UK trade marks and designs from all registered EUTMs and RCDs. This means that holders of EU trade marks, registered Community designs (and even Community plant variety rights) registered or granted before the end of the transition period will automatically become holders of comparable IP rights in the UK.

The comparable right will have the same legal status as if it had been applied for under UK law and will obtain an entirely independent UK trade mark or design which can be assigned, licensed or renewed separately from the original EUTM or RCD.

Renewals

Comparable trade mark and registered design rights will be subject to separate renewals. They will retain the same renewal dates and take the same filing or priority dates as the corresponding EU right. Where an EUTM or RCD which is due for renewal after 1 January 2021 has been renewed early, the comparable UK right will also require to be renewed. This is the case even if the renewal action was taken before the end of the transition period.

Where the renewal date of the comparable right expires in the six months after the end of the transition period, the UKIPO will not send a renewal reminder. Instead, a reminder will be sent on the date of expiry, if not soon after, which will set a six-month deadline to renew.

Opting out of the comparable UK right

If you do not wish to hold the new right, you may opt out of holding it. If you opt out, the comparable right will be treated as if it had never been applied for or registered under UK law.

You may not exercise an opt-out right if you have used the comparable UK right in the UK. This also applies if you have:

  • assigned or licensed or entered into an agreement in relation to it; and/or
  • you have initiated litigation based upon the comparable UK right.
Effect of reputation of EUTM

A comparable UK trade mark right arising from an EUTM will have the benefit of any reputation acquired by the corresponding EUTM, but only until IP completion day. The comparable UK mark's reputation will be based only on use in the UK after that day.

Comparable marks will be granted and registered free of charge.

Applications pending at the end of the transition period

Pending applications for EUTMs, RCDs and Community plant variety rights that have not reached registration by the end of the transition period will have a grace period of nine months to apply for equivalent rights in the UK, taking advantage of the same filing, priority and for the purposes of trade marks, seniority dates. It will be necessary to file a new corresponding application at the UKIPO in order to obtain trade mark or design protection in the UK.

Registration procedures

Article 55 of the Withdrawal Agreement addresses registration procedures and provides that the registration, grant and protection of comparable UK rights will be carried out free of charge by the UK authorities, using the data available in the registries of the EUIPO, the Community Plant Variety Office and the European Commission (which those offices will provide).

Right-holders will not have to carry out any administrative procedures or make any applications.

The Article clarifies that renewal fees will still have to be paid as normal and it will continue to be possible to surrender rights in the usual way under UK law.

Representation and address requirements

After the transition period ends, there will also be changes to representation at the European Union Intellectual Property Office (EUIPO). UK attorneys will no longer be able to represent clients on new applications or proceedings to the EUIPO at the end of the transition date. The only exception to this is for cases which are ongoing at the end of the transition period. Following the end of the transition period, EEA attorneys will need to be appointed to represent UK clients on new applications or proceedings to the EUIPO.

Additionally, the IPO recently issued guidance in relation to address for service for IP rights from 1 January 2021. After the end of the transition date, IP owners who file an application for a patent or trade mark or design at the IPO (or new contentious proceedings are raised against them) are required to have a UK, Gibraltar or Channel Islands address for service.

However, this does not apply to the comparable rights that will be created following the end of the transition period. These rights will be protected under the Withdrawal Agreement for a period of three years, after which a UK address for service must be recorded.

Registered and unregistered Community designs after the transition period

Following the end of the transition period, unregistered Community designs (UCD) will no longer be valid in the UK. Instead, similar to trade marks and registered designs, these rights will automatically be replaced by a new UK right.

Designs currently protected in the UK as a UCD before 1 January 2021 will be protected as a UK continuing unregistered design. This will be automatically established at the end of the transition period and will continue to be protected in the UK for the remainder of the three-year period attached to it.

However, there will also be the creation of a supplementary unregistered design (SUD). This right ensures that the full range of design protection provided prior to the end of the transition period remains. The SUD will be similar to the UCD in that it will provide protection for both 3D and 2D designs for a period of three years, although it will not extend to the EU. Importantly, the establishment of the right arises from first disclosure in the UK and not first disclosure in the EU.

Finally, UK design rights will continue after the end of the transition period and function alongside the other rights including continuing and supplementary unregistered design. The benefit of UK design rights is that unlike a UCD which lasts only three years, a UK design right provides protection for the shape and configuration of 3D articles for up to fifteen years. However, it is important to note that the criteria for UK design rights will change on 1 January 2021. The scope has been reduced to limit the qualification of UK design rights to people residing in the UK or businesses formed under UK laws or a qualifying country (previously it was extended to the EU).

Exhaustion

Exhaustion of intellectual property rights will also need to be considered by rights holders following the end of the transition period, particularly for the food and drink and fashion industry. Currently, where a rights holder places their IP protected goods on the EEA market, they exhaust their rights meaning that they cannot use their IP rights to stop the resale or further distribution of the goods.

However, following the end of the transition period, businesses which currently export IP-protected goods to the EEA that have already been placed on the UK market may need to obtain permission from the IP right holder. A failure to do so could see IP right holders enforcing their rights and preventing resale or further distribution where the goods have already been placed on the UK market. In any case, IP right holders may refuse to give such permission if they wish to prevent these goods being exported to the EEA.

Similar issues will not arise in respect of parallel imports from the EEA to the UK. Following 1 January 2021, IP rights in goods placed on the EEA market will continue to be exhausted in the UK. As such, parallel imports into the UK from the EEA will remain the same and right holders will not have the same ability to enforce their rights as with parallel exports from the UK to the EEA following the end of the transition period.

Brexit Checklist

How businesses and consumers should prepare for the end of the Brexit transition period:

How can we help?

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If you have questions about getting your business ready for Brexit, please do not hesitate to contact a member of our team, or your usual MacRoberts contact, who will be delighted to assist.

 

This article was co-written by Trainee Solicitors, Nikita Sandhu and Haris Saleem.

Intellectual Property at MacRoberts

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