Intellectual property after Brexit | In Principle

The United Kingdom ceased to be a member of the European Union on 1 February 2020, and the transition period is drawing to an end on 31 December 2020. What will happen with intellectual property from 1 January 2021? How will trademarks, industrial designs, and patents be registered in the EU and the UK? Will the territorial scope of protection of existing rights change? What about .eu domains held by individuals and companies based in the UK? The changes will impact the operation of businesses currently benefitting from rights awarded across the EU. Now they must adapt to the changes and comply with new obligations.

Below we discuss key IP issues for businesses, governed by the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (signed on 24 January 2020).

EU trademarks and Community designs

• Registered on or before 31 December 2020

EU trademarks and Community designs registered on or before 31 December 2020 at EUIPO (the European Union Intellectual Property Office in Alicante, Spain) will automatically be “copied” into the UK’s register of national trademarks operated by UK IPO (the Intellectual Property Office of the United Kingdom). This applies only to trademarks and designs as to which a registration decision was issued by EUIPO by 31 December 2020. A “comparable registered and enforceable intellectual property right in the United Kingdom” is to be created for each such trademark or design, with a scope covering exclusively the UK. Thus from 1 January 2021 the proprietor will hold two rights: an EU right and a British right. They will cover the same goods and services, and have the same date of filing, priority and registration. For a trademark or design to be “copied” into UK IPO, no applications will have to be filed or additional fees paid.

Nonetheless, the rules for payment for trademarks and designs will change from 1 January 2021. Currently, the proprietor of an EU trademark or Community design has paid a single fee to EUIPO to extend protection through the EU, including the UK. From January 2021, if the proprietor seeks to maintain protection of both trademarks or designs, i.e. EU and UK, it will have to pay two fees—one to EUIPO and one to UK IPO.

• Pending registration as of 1 January 2021

Trademarks and designs filed with EUIPO for which the registration is not completed by 31 December 2020 will not be automatically “copied” into the British register. To enjoy protection for such a trademark or design also in the UK, it will be necessary to file an application with UK IPO by 30 September 2021 for rights to the same trademark or design as filed in the EU. The relevant fee will have to be paid and the full registration process will have to be conducted before UK IPO. But following this procedure will allow the proprietor to obtain a British registration with the same filing date and priority date enjoyed by the trademark or design filed with EUIPO.

• Filed from 1 January 2021

Rights to trademarks and designs filed with EUIPO from 1 January 2021 will cover only the territory of the EU, which will not include the UK. If the proprietor is interested in protection of a trademark or design in both the EU and the UK, it will have to apply separately for national rights in the UK and EU rights in separate proceedings. It will be necessary to file (and pay for) applications to EUIPO and UK IPO and then, if the applications are granted and two rights are registered, regular fees will have to be paid to both institutions going forward.

Use of trademarks

The rule is that a trademark must be used. If the proprietor fails to make genuine use of a trademark in the protected territory within 5 years from registration, the trademark may be revoked. But the Court of Justice of the European Union has held numerous times that to show genuine use of an EU trademark, it is not necessary to use it in every member state; use in even one member state could suffice.

Both trademarks registered at EUIPO and British trademarks must be used, and their non-use carries a risk of revocation. The same rules apply to British trademarks arising automatically on 1 January 2021 as copies of marks registered at EUIPO. But in that case there is one exception. In proceedings for revocation of a British mark that was originally registered as an EU trademark, it will be sufficient to show genuine use of the EU trademark within 5 years from registration in the EU and not necessarily in the UK. The mark need not be used before 1 January 2021 in the UK, as use outside the UK will suffice to show genuine use in the EU. This rule does not apply to trademarks registered at UK IPO on or after 1 January 2021.

Use of an EU trademark from 1 January 2021 will not count toward use of a British trademark, and vice versa. After obtaining the rights to a British trademark, the proprietor should begin using it. As mentioned, lack of genuine use over a period of 5 years may expose the proprietor to revocation proceedings and loss of the rights. It is the same in the case of EU trademarks. If the proprietor of an EU trademark has so far used it only in the UK, from 1 January 2021 use of the mark only in the UK will not suffice to retain protection. If the proprietor does not begin using the EU trademark outside of the UK within 5 years after registration, it faces a risk of losing the rights to the EU trademark and retaining only the British registration.

Similarly, from 1 January 2021, a party seeking to revoke an EU trademark and a “copied” British mark will have to file two separate revocation applications and pursue proceedings in these separate jurisdictions.

Well-known trademarks

Well-known trademarks enjoy broader protection than “ordinary” trademarks. In short, in such cases there need not be a similarity between the goods or services for which the mark is registered and infringing goods or services. To show “similarity” between the well-known trademark and an infringing designation, it is sufficient if the later designation evokes associations with the well-known trademark. It can be hard to prove that a mark is well-known, but once this is shown it is much easier to pursue infringements.

Proprietors of EU trademarks can pursue infringement of a well-known trademark in the UK, relying on the British mark arising on 1 January 2021 by copying of the EU right. The factual basis for the claim will be the renown gained through the end of 2020 by the EU trademark as well as the renown arising out of use of the “copied” trademark in the UK from 1 January 2021 onwards.

If an EU trademark has become well-known in the EU, but outside of the UK (e.g. in France, Germany or Spain), it will be much harder to pursue infringement as a well-known trademark in the UK after 1 January 2021, because it will first have to be proved that the mark has become well-known in that territory.

Import and export of goods

Brexit can also impact the operations of businesses relying on the movement of goods into the UK from countries in the European Economic Area or vice versa. The great majority of those goods are protected by intellectual property rights, for example because they bear a registered EU trademark or their shape is protected as a Community design.

EU trade not infringing intellectual property rights (i.e. parallel trading) is possible thanks to the exhaustion of rights. Simply put, after goods have been put on the market within the EEA by the proprietor of a trademark or industrial design or with the proprietor’s consent, the proprietor cannot oppose further trade of the same goods within the EEA. In this respect, prior to Brexit goods put on the British market by the proprietor or with its consent could be distributed further to other EEA countries, such as France or Poland. This rule will remain in force in relation to goods put on the market in the EEA or the UK through 31 December 2020. The rights become exhausted in both the EEA and the UK.

But there will be changes starting 1 January 2021.

• Export from the UK to the EEA

From 1 January 2021, rights to goods put on the market in the UK by the proprietor or with its consent will not be deemed to be exhausted in the EEA. This means that exporting goods protected by intellectual property rights from the UK to the EEA will need additional consent from the proprietor of the rights. This may make it necessary to re-examine contracts and existing business arrangements to avoid exposure to legal consequences and claims by rightholders, as the owners of exclusive rights may refuse to consent to such export.

• Export from the EEA to the UK

From 1 January 2021, rights to goods put on the market in the EEA by the proprietor or with its consent will still be deemed exhausted in the UK. Thus the import of original goods from the EEA to the UK will remain unchanged in this respect at least for now. However, this may change at the beginning of 2021, as the UK will decide then on its own rules for exhaustion of intellectual property rights with respect to goods put on the market in the EEA (information on this topic is expected to be published on the UK’s government site on exhaustion of IP rights after the transition period).

Proceedings before EUIPO

Persons without a domicile, principal place of business, or real and effective commercial establishment within the EEA must be represented in EUIPO proceedings by a professional representative (e.g. in disputes over invalidation of rights to a Community design or revocation of rights to an EU trademark). The exception is filing for registration or extension of an EU trademark or Community design. This means that from January 2021, British citizens and entities based in the UK will no longer be able to appear on their own before EUIPO, except as indicated above.

Changes will also affect British lawyers who have to date represented parties before EUIPO. The rule is that a representative before EUIPO can only be a person who:

• Practises the profession of a lawyer with relevant qualifications in a member state of the EEA
• Has their registered office in the EEA, and

• Is authorised to appear as a representative in trademark cases in a member state of the EEA.

Thus a British lawyer will be able to appear before EUIPO as a representative only if, apart from holding qualifications as a British practitioner, they practise the profession in an EEA member state, have their registered office there, and have rights to represent the party in trademark proceedings. There is an exception for proceedings pending as of 31 December 2020; there, a British lawyer appointed as a representative in the specific case may continue to represent the client through all stages of the proceedings.

European patents

The existing procedure for obtaining a European patent and then validating it in countries selected by the applicant will remain unchanged. This is because the grant of European patents is governed by the European Patent Convention, to which the UK is a party. Despite leaving the EU, the UK has not renounced this convention, and thus European patents validated in the UK will remain in force. Entities from the UK will still be able to apply for the grant of a European patent and seek validation of the patent in any country that has signed the convention. Similarly, entities from outside the UK will be able to follow the same procedure to seek validation of patents in British territory.

The impact of Brexit on patents will be felt only in respect to the unitary European patent. The UK has announced that it will not take part in this system, which means that a unitary European patent will not exert effects in British territory. To obtain protection there, it will thus be necessary to validate the European patent in the UK or obtain national registration there.

.eu domain names

From 1 January 2021, .eu domain names will no longer be registered for individuals residing in the UK who do not hold citizenship of an EU member state, or for businesses and organisations based in the UK. Nor will it be permissible to transfer .eu domains to such persons. This is because only an EU citizen, a natural person residing in the EU, or an undertaking or organisation with its registered office in the EU can be the owner of an .eu domain name.

To continue holding such a domain after 31 December 2020, it will be necessary before the end of 2020 to demonstrate to EURid (the organisation administering .eu domains) that the owner meets the subjective conditions entitling them to maintain an .eu domain, and thus for example a British citizen residing outside the UK must provide EURid the address of their domicile in an EU member state.

Failure to confirm this issue will result in suspension of the domain from 1 January 2021. Consequently, it will not be possible to operate any service on that domain, e.g. a website or email. Confirming fulfilment of these criteria after 31 December 2020 will restore the functionality of the domain. But if the status of an owner of an .eu domain is not corrected by 1 April 2021, the domain will be deemed withdrawn and become available again for registration from 1 January 2022.

Thus in the case of companies and organisations established in the UK, maintaining the rights to an .eu domain will require the name to be transferred to another entity, such as an affiliate established in the EU.

Summary

Brexit will have an impact on most businesses in the EU and the UK. Owners of filed or registered EU trademarks and Community designs must soon decide on obtaining or maintaining their rights in the UK. In this respect, they should examine their portfolio, the scope of use, and plans for the future, so that they can base their decisions on business realities. Businesses should also—ideally with the help of counsel—analyse their strategy for intellectual property and commercial contracts, so that after 31 December 2020 they continue to effectively protect their exclusive rights in both the EU and the UK, and exercise their rights without risk.

Update: The trade agreement between the EU and the UK of 31 December 2020, now awaiting ratification, will not affect the rules discussed in this article.

Paulina Mleczak, attorney-at-law, Lena Marcinoska, adwokat, Monika Wieczorkowska, patent attorney, Sandra Lipińska, patent attorney trainee, Intellectual Property practice, Wardyński & Partners