What does a No Deal Brex­it mean for your trade marks?

Recent polit­i­cal changes in the Unit­ed King­dom have raised the prospect of a ​‘no deal’ Brex­it as a seri­ous pos­si­bil­i­ty. It is impor­tant to empha­sise that even in this sit­u­a­tion, there is like­ly to be an order­ly tran­si­tion of trade mark and oth­er intel­lec­tu­al prop­er­ty rights between the EU and the UK. This tran­si­tion will be based on the cre­ation of dupli­cate UK rights for all reg­is­tered EU trade marks. As a sov­er­eign nation, the UK has the pow­er to cre­ate and enforce such UK rights inde­pen­dent of the EU.

The Euro­pean Union (With­draw­al) Act received Roy­al Assent on 26 June 2018 and is now law. The With­draw­al Act is intend­ed to ensure that the UK exits the EU with cer­tain­ty, con­ti­nu­ity and con­trol. The pro­posed With­draw­al Agree­ment between the UK and the EU has been reject­ed by the British Par­lia­ment, but the EU has grant­ed a six months exten­sion to 31 Octo­ber 2019 (‘Brex­it Day’) for the UK to with­draw from the EU. It is pos­si­ble that the UK will ncom­pae­go­ti­ate a revised With­draw­al Agree­ment with the EU or leave the EU on Brex­it Day on a no deal basis. Under the cur­rent With­draw­al Agree­ment, there was to be a tran­si­tion peri­od under which the UK would still be bound by EU rules up to 31 Decem­ber 2020. This tran­si­tion peri­od will not be applic­a­ble in the event of a no deal Brexit.

Even if there is a no deal Brex­it, all exist­ing reg­is­tered EU trade marks will be grant­ed an equiv­a­lent or com­pa­ra­ble trade mark. In the UK, this ​“cloning” of trade marks will be auto­mat­ic and involve no cost to trade mark own­ers. The reg­is­tered EU trade marks from which the UK marks will be cloned will con­tin­ue in force in the EU but this juris­dic­tion will of course exclude the UK. The cloned UK trade marks will have a pre­fix des­ig­na­tion show­ing that they have been cloned from the EU marks. Inter­na­tion­al marks cur­rent­ly des­ig­nat­ing the EU will be split into sep­a­rate des­ig­na­tions for the EU and the UK. The fore­go­ing pro­ce­dures will apply whether or not the UK adopts a no deal Brex­it or nego­ti­ates a for­mal With­draw­al Agree­ment with the EU. The major dif­fer­ence is that the exist­ing With­draw­al Agree­ment pro­vides for a tran­si­tion peri­od end­ing on 31 Decem­ber 2020, at the earliest. 

As a con­se­quence, there should be an order­ly cre­ation of equiv­a­lent rights in reg­is­tered trade marks in the UK which are com­pa­ra­ble to exist­ing EU rights. How­ev­er, this auto­mat­ic trans­fer of trade mark rights will not be applic­a­ble to pend­ing EU trade mark appli­ca­tions. For these pend­ing EU marks, it will be nec­es­sary for the marks to be re-filed in the UK with­in nine months of Brex­it Day for those rights to be main­tained in the UK. The UK IPO will recog­nise all fil­ing dates in claims to ear­li­er pri­or­i­ty as record­ed on the cor­re­spond­ing EU appli­ca­tions. It is there­fore impor­tant that trade mark own­ers or their legal rep­re­sen­ta­tives take steps to re-file EU trade mark appli­ca­tions in the UK dur­ing this nine month peri­od after Brex­it Day.

Whether or not there is a no deal Brex­it, trade mark own­ers may wish to con­sid­er the fol­low­ing issues:

• In the event that you are fil­ing a trade mark in the EU now, it would be wise to con­cur­rent­ly file that mark in the UK to avoid the neces­si­ty of re-fil­ing the appli­ca­tion if the mark is not reg­is­tered by the end of the above nine month period.
• Con­sid­er whether the EU appli­ca­tion itself cov­ers suf­fi­cient coun­tries and whether cer­tain near­by non-EU mem­ber states should also be included.
• Assess whether inde­pen­dent trade mark rights in the UK are worth­while to your busi­ness, espe­cial­ly if you have no busi­ness activ­i­ties planned in that jurisdiction.
• Diarise nine months from Brex­it Day to ensure pend­ing trade marks appli­ca­tions are re-filed in the UK.
• Expe­dite any ongo­ing oppo­si­tions and oth­er pro­ceed­ings to ensure com­ple­tion before Brex­it Day.
• Review if exist­ing agree­ments and dis­tri­b­u­tion con­tracts need to be mod­i­fied to take account of the sep­a­ra­tion of the EU and UK jurisdiction.
• Con­tin­ue to mon­i­tor Gov­ern­ment pol­i­cy on unre­solved issues con­cern­ing EU and UK trade mark rights. These issues could include the like­ly treat­ment of evi­dence of pri­or use of UK trade marks by the UK IPO where that use took place in the juris­dic­tion of the resid­ual EU. 

Although a no deal Brex­it is unlike­ly to pre­clude an order­ly cre­ation of equiv­a­lent EU trade mark rights in the UK, no one can con­fi­dent­ly fore­cast the final out­come in the increas­ing­ly unpre­dictable Brex­it sto­ry. Depend­ing on polit­i­cal devel­op­ments, the UK could end up with a nego­ti­at­ed Brex­it, a no deal Brex­it or no Brex­it at all. This sit­u­a­tion evokes the ancient Chi­nese curse: ​‘May you live in inter­est­ing times’.