On 28 February 2018, the European Commission released its draft withdrawal agreement setting out a proposal on the arrangements for the withdrawal of the UK from the EU (Withdrawal Agreement). The full text of the Withdrawal Agreement can be viewed here: European Commission’s Draft Withdrawal Agreement dated 28 February 2018 (see Title IV on Intellectual Property).

This draft provides rights holders with some insight on the European Commission’s perspective on what the future might look like for EU trade marks in a post-Brexit UK. At the date of this article, the UK Government is yet to articulate its own proposal for the status of these rights post-Brexit.

The Withdrawal Agreement is proposed to take effect on 30 March 2019, being the date on which the UK will formally separate from the EU. However, the European Commission has acknowledged the UK Government’s request for a 2-year transition period.  If this request is granted, the transition period is expected to end on 31 December 2020. This date is significant because many of the protections for EU IP rights that are described in the draft Withdrawal Agreement will only apply to those rights which are registered before the end of the transitional period.

The European Commission proposes the following positions in relation to EU trade marks:

  • Continued protection in the UK of EU registered trade marks: EU trade marks registered before the end of the transition period (including international registrations designating the UK) will continue to be registered and enforceable in the UK without re-examination, through the grant of a UK trade mark for the same sign, goods and services for which the EU right was registered. The priority date for the EU trade mark will become the priority date of the UK trade marks, and the term of protection of the UK trade mark must be at least equal to the remaining term of the corresponding EU trade mark.
  • Registration procedure: The registration of EU trade marks as UK trade marks would be carried out by “the relevant UK entities” (presumably the UK Intellectual Property Office) using information on the EU Intellectual Property Office registers.  EU rights holders should take the opportunity to ensure their registrations are up to date in the EU now, to avoid the likely delay and disruption that will occur when the UK registration process commences. The UK registration will be completed at no cost to rights holders, the first fees payable will be upon renewal (which will be the corresponding renewal date under EU law).
  • Revocation and invalidity: If an EU trade mark is declared invalid or revoked pursuant to EU proceedings that were ongoing at the last day of the transition period, the corresponding UK trade mark will also be invalid or revoked. However for invalidity or revocation proceedings commenced following the end of the transition period, there is scope for inconsistent decisions to be made as between the UK and the EU. The Withdrawal Agreement protects rights holders from cancellation for non-use in the UK immediately following the transition period, providing that the new UK trade marks may not be revoked for non-use on the basis that they were not in use in the UK before the end of the transition period.  Rights holders would therefore have a grace period following the transition period to commence use of the mark in the UK before it becomes liable to revocation under UK trade mark law.
  • Exhaustion of rights: Unsurprisingly, the Withdrawal Agreement makes it clear that rights which were exhausted under EU law before the end of the transition period will remain exhausted in both the EU and the UK after the end of the transition period.
  • Continued protection in the UK of EU geographical indications and other similar rights: EU geographical indications, designations of origin or traditional specialities which are protected in the EU on the last day of the transition period will continue to be protected in the UK from the end of the transition period pursuant to a UK right that provides at least the same level of protection as was provided under EU law.

What happens now?

The draft Withdrawal Agreement will now be discussed amongst the European Council and the Brexit Steering Group of the European Parliament, before eventually being provided to the UK Government which will open formal negotiations. The European Commission hopes that negotiations will be concluded by October 2018, following which the agreed draft will be put to a vote of the European Parliament. The UK will also need to ratify the Withdrawal Agreement according to its own procedures before it can become binding.

Whilst the draft Withdrawal Agreement remains subject to vast uncertainties, it does at least represent a clear statement of intention from the European Commission. Rights holders will be comforted to see that the European Commission intends to protect established registered EU IP rights and that the current proposal does not impose procedural obstacles to maintaining those rights. Clearly the positions set out in the Withdrawal Agreement are only a starting point, but they do at least provide rights holders with a basis against which to consider their trade mark portfolios and start to form post-Brexit trade mark strategies.

We would like to acknowledge the contribution of Sage Nemra in preparing this article.

For more details on what Brexit will mean for your business, please visit our dedicated Brexit site.