A series of votes will be taking place in Parliament in the next couple of weeks, the outcome of which will affect how brand owners need to be thinking about their brands and intellectual property (IP) portfolio.
This article sets out: the different scenarios that could occur; what effect this will have on the UK’s relationship with the EU; how the situation will affect your IP rights; and how you can prepare.
What Votes Are Happening?
The votes will be as follows:-
- 12 March – a vote to decide whether to back Theresa May’s negotiated ‘deal’.
- 13 March – If the ‘deal’ is rejected a second vote will take place to vote on leaving the EU with a ‘no deal’.
- 13 or 14 March – if the ‘no deal’ is rejected then a third vote for an extension of Article 50 will take place.
Effect of the Possible Different Outcomes
‘Deal’ – if Theresa May’s ‘deal’ is agreed, a transition period will apply until the end of 2020. No change between the UK and the EU will occur during this transition period.
‘No Deal’ – if ‘no-deal’ is agreed then the UK will leave the EU with immediate effect on the 29th March 2019. All relationships between the UK and the EU will end immediately on this date. The UK government have published guidelines as to what will happen in the event of a ‘no-deal’. See https://www.gov.uk/government/publications/ip-and-brexit-the-facts/ip-and-brexit.
‘Extension’ – if an extension to Article 50 is agreed, the UK’s exit from the EU will be delayed. Until the extension expires, there will be no change in the relationship between the UK and the EU.
Effects on your IP Portfolio
Whatever the outcome of these votes, there is not too much to worry about with respect to your IP. Only some IP rights will be affected by Brexit. For example, patents are largely unaffected, as the European Patents are confusingly not an EU right and are dealt with by the European Patent Convention which includes some non-EU countries.
It is mainly EU trade marks (EU TM) and Registered Community Design rights (RCD) that will be affected by Brexit. Luckily, the UK government have already put arrangements in place to ensure that all existing EU TMs and RCD rights will continue to be valid and enforceable in the UK after Brexit.
Anyone with an existing EU TM or RCD registration will have a new UK equivalent right granted automatically, that will come into force when the UK leave the EU. Upon a ‘no-deal’ this will be with immediate effect; upon a ‘deal’ being agreed, the UK right will come into effect at the end of the transition period (31st December 2020); and if an ‘extension’ is agreed, it will come into effect at the end of any agreed extension period.
These new UK trade marks and design rights will automatically be entered onto the UK IP register. There will be no fee or procedure to follow. The details of these new rights will be identical to their existing EU TM or RCD right, in that the same details will be filed – such as filing and registration date. These new rights will be treated as separate UK rights and will be subject to the renewal rules in the UK. Rights owners will be able to assign and licence these new UK rights separately from their original EU right.
How Can You Prepare
While waiting for the outcome of Brexit to be decided, there are a couple of actions you can be taking now to reduce any issues when the UK leaves the EU.
Plan ahead for new trade mark and design right applications. After Brexit, any new applications for trade marks and design rights will need to be made in both the EU and the UK if protection is required in all those territories.
If a EU TM or RCD right application is still pending on exit day, it will not automatically convert into a new UK right. Instead the right owner will have 9 months from exit day to commence a new UK application (to take the benefit of priority filing dates). For any really important brands for which registrations are currently being commenced, it might be worth considering double registrations – both EU TMs / RCD rights as well as UK trade marks / design rights, to ensure full protection in both the EU countries and the UK.
Portfolios of trade marks and design rights should be reviewed, and consideration should be given as to whether the new UK right is actually required. Renewal fees will obviously be charged going forward on both the EU and UK rights; and if the new UK right is not used, it may become subject to cancellation actions for non-use. It is believed that there will be an ‘opt-out’ option for the new UK rights.
Review all IP Agreements
Any IP agreements that cover the EU, such as licences, co-existence agreements, and other IP agreements need to have their territory clauses reviewed. Existing EU IP rights which take the benefit of the new identical UK right will be covered under any existing agreements, but for any ongoing matters the agreement should make it clear in the territory clause that the EU and the UK separately are covered.
Once the UK leaves the EU, UK businesses will no longer be able to register or renew any .eu domain names. A plan needs to be put in place to consider new domains to be used going forward.
Please note that this article sets out the position as at the date of this article. The full impact of Brexit is still a little unclear and some of the points raised in this article may be subject to change.