What impact will Brexit have on intellectual property rights – trade marks and exhaustion?

In part 3 of our Brexit series, we look at how trade marks will be impacted post-Brexit, and consider the impact of Brexit on the exhaustion of intellectual property rights.

In recent days, the press has made much of a possible Brexit deal. Despite this, agreement remains exclusive. As part of the UK government’s Brexit strategy and ongoing negotiations with the European Union, the UK public has been provided with information on what may happen in relation to specific areas of EU law if there was to be a no-deal Brexit.

In light of the UK Intellectual Property Office’s (UK IPO) publication “IP and Brexit: the facts” and the Department for Business, Energy and Industrial Strategy’s publications “Trade marks and designs if there’s no Brexit deal” and “Exhaustion of Intellectual Property Rights if there’s no Brexit deal”, we consider the practical implications of Brexit on trade marks and exhaustion across the EU and the UK.

Validity and enforceability in the UK

Despite concerns that EU trade marks will cease to be enforceable in the UK post-Brexit, the UK government has indicated its intention to ensure that trade mark rights are not lost as a result. It wishes to ensure that protection of rights in EU trade marks will continue and that these will remain enforceable in the UK post-Brexit.

The means by which it intends to do this is by creating an equivalent trade mark right which will be registered in the UK as a UK trade mark. This new right will become enforceable when the UK leaves the EU. The government has stressed that it will ensure that this new right is brought in “with minimal administrative burden” and will be treated as if the application had been made within the UK and as if the registration had occurred under UK law. This new right will be deemed independent from the EU right in terms of renewal, assignation and licensing. Organisations can opt-out of receiving this new comparable UK registered trade mark should they so wish.

Although no details have been provided, the government will make provision for the status of legal disputes involving EU trade marks which are ongoing before the UK courts at the time of Brexit.

What happens if your organisation has an ongoing application when the UK leaves the EU?

These organisations will be able to apply for protection in the UK within nine months of Brexit. This can be done by refiling the application with the Intellectual Property Office in the UK. However, the cost of this application will fall to the organisation and will not be granted by the UK IPO free of charge (as will be the case for existing EU trade mark owners). Such applications will retain the EU filing date for the purposes of priority.

Validity in the EU

When the UK leaves the EU, EU trade mark rights will continue in the remaining 27 EU Member States. It will also still be possible for UK businesses to register an EU trade mark which will be valid in the remaining Member States (excluding the UK).

The Madrid Protocol

Under the Madrid Protocol international trade mark system (which is not connected to the EU and therefore will not be impacted by Brexit), a trade mark may be protected in up to 113 countries, by filing one single application with the World Intellectual Property Organisation (WIPO) and paying the relevant fees. This regime will continue to apply post-Brexit and UK businesses can continue to take advantage of this system to seek registration in the Madrid protocol countries. Although details are lacking, the government is also committed to working with WIPO to make sure trade marks filed through the Madrid Protocol, which designate the EU, continue to be protected in the UK.

Exhaustion of intellectual property rights
What is exhaustion of rights?

Where goods are placed on the market by an owner of intellectual property rights, or placed on the market with that owner’s consent, the owner may not rely upon his intellectual property rights as a means of precluding further dealings with the goods. Exhaustion of rights is important for the purposes of free trade within the European Economic Area (EEA).

A regional EEA exhaustion scheme currently applies to the UK and therefore, when intellectual property rights are put on the market by the owner or with the owner’s permission, within the EEA, they are deemed exhausted.

The government has announced a temporary plan to continue recognition of this scheme upon the UK’s departure from the EU. The fact that there will be no immediate change to the rules governing the import of goods into the UK will offer stability to organisations and customers in the interim. However, it remains to be seen what will happen after this temporary period. The UK government has indicated that it is considering options in this regard.

The import of goods from the UK into the EEA may be more problematic. If your business is involved in the export of goods to the EEA, you will need to contact the intellectual property owner to determine whether you require their consent. This is because the intellectual property rights will not be deemed exhausted in the EEA. It would also be advisable to obtain legal advice on how Brexit may impact your business in this regard.

Conclusion

To conclude, it is important that your business takes note of the following:

  • Existing registered EU trade marks will continue to be protected in the remaining EU member states.
  • Owners of existing registered EU trade marks will be granted new equivalent UK rights.
  • If your business has an ongoing application for an EU trade mark when Brexit occurs, you must ensure that you apply for protection with the UK Intellectual Property Office within 9 months.
  • If your business relies upon exhaustion of rights to export goods, you should be aware that this will be more challenging once we leave the EU.

This article was co-written by Charlotte Fleming. 

Latest updates from @MacRoberts