Brexit will change the landscape of United Kingdom (UK) and European Union (EU) trade mark and design portfolios, but not immediately. This article explains some of the ways in which the UK’s departure from the EU will affect intellectual property (IP) rights for rights holders in the UK and EU, and what to prepare for.

The transition period

The UK became the first country to leave the EU on 31 January 2020, known as Brexit Day, and we now find ourselves in the 11-month transition period from 1 February to 31 December 2020, during which the UK and EU will negotiate their future relationship. 

The post-Brexit regime will officially commence on 1 January 2021.

During the transition period, the UK will remain part of the EU Single Market and Customs Union and, unless otherwise provided, EU law will continue to apply to the UK. But the UK will no longer be entitled to participate in the elections, decision making, and governance of EU entities.

What is more, the IP system will continue as is until 31 December 2020, or “IP Completion Day”.

Two systems

The EU created two systems for trade marks and designs:

• the European Union Trade Mark (EUTM) system
• the Registered Community Designs (RCD) system

Registered EUTMs

An EUTM is a trade mark covering the EU as a whole. It offers trade mark owners a unified system of protection throughout the EU, with the filing of a single application. If successful, this one application results in an EUTM registration, which is accepted in all  EU Member States. 

An EUTM registration will remain protected and enforceable in the UK until 31 December 2020.

From 1 January 2021, EUTMs will no longer protect trade marks in the UK. Under the Withdrawal Agreement, on 1 January 2021, the UK Intellectual Property Office (UKIPO) will automatically create a comparable or cloned UK trade mark, recorded on the UK register, for all right holders with a registered EUTM. The UKIPO will convert almost 1.4 million registered EUTMs to comparable UK rights at the end of the transition period.

No action is required on the part of such rights holders. No fees are payable and the new UK right will be provided with minimal administrative burden. It is important to note that an EUTM typically takes four to five months to proceed to registration, assuming no objections or oppositions. As such, if considering applying for protection in both the EU and the UK, it is worth taking advantage of the transition period by applying for an EUTM promptly.

Opting out 

Owners may opt out of acquiring a comparable trade mark if, for example, this would be in breach of an agreement, but is likely to incur an official fee. The opting out possibility will only be available as long as the trade mark owner has not made use of its comparable trade mark in the UK. Opt-out requests can only be submitted after 1 January 2021.

Therefore, if no detriment will be caused, it may be more cost-effective to simply allow comparable UK trade marks that are not of interest to lapse on renewal.

Pending EUTMs

EUTMs already filed will most likely proceed to registration (barring opposition) before the end of the transition period and thus benefit from a free automatic UK comparable trade mark. However, no comparable UK right will be created at the end of the transition period for pending applications.

Owners of pending EUTM applications will be able to apply to register a comparable UK trade mark using the normal application process in the UK. For a period of nine months from the end of the transition period (until 30 September 2021), the UKIPO will recognise the earlier filing date of the pending EUTM as well as filing dates and claims to earlier priority and UK seniority recorded on the corresponding EU application, and examine it under UK law. The EUTM application will move  forward covering 27 Member States. Owners pursuing this option will be required to meet the cost of re-filing the application, in accordance with the UK application fee structure.

No automatic notifications will be issued by either the UKIPO or European Union Intellectual Property Office (EUIPO) of the expiry of the nine-month period and potential loss of rights in the UK, so this will need to be monitored by EUTM rights holders or their representatives.

Renewing trade marks

Once a comparable UK trade mark is created, a separate renewal fee will apply for each comparable UK trade mark and the existing EUTM, payable separately to the UKIPO and EUIPO.

For the purposes of future renewal, the comparable UK right will retain the existing renewal date of the corresponding EUTM.

Where the renewal date of the EUTM falls on or before 31 December 2020, presuming it has been renewed, the UK comparable right will not need to be renewed until the next renewal of EUTM.

Conversely, where the renewal date of the EUTM falls after 1 January 2021, a renewal fee will need to be paid to maintain the comparable UK trade mark. This is the case whether or not the EUTM has been renewed before 1 January 2021. 

Consequently, early payment of the renewal fee at EUIPO, before 1 January 2021, will have no effect in respect of the comparable UK trade mark.

Where the renewal date of the comparable UK trade mark falls between 1 January 2021 and 30 June 2021, a renewal reminder will be sent by UKIPO on or near the renewal date. Rights holders will be given an additional six months from the date of the renewal reminder to renew the comparable UK trade mark without payment of any late renewal fee. This will need to be taken into account when clearance searches are being carried out in the UK during 2021.    

Registered Community Designs

Designs are a form of intellectual property and protect the appearance of the whole or part of a product resulting from the features of, in particular, its lines, contours, colour, shape, texture, materials and ornamentation. A design can be protected if it is new and has individual character compared to designs that are already in the public domain. Registered Community Designs (RCDs) enjoy unitary protection in all  EU Member States.

Whereas a registered trade mark can potentially be renewed indefinitely at 10-year intervals, an RCD lasts for a maximum of 25 years, requiring renewal every five years.

Design protection can currently be obtained via a registered right or an unregistered right in some of the following ways:

• a national registered design granted by UKIPO
• a RCD granted by the EUIPO

The UK will remain part of the EU RCD system throughout the transition period. At the end of the transition period, RCDs will no longer be valid in the UK. As in the case of trade marks, all registered and published RCDs will have comparable UK designs, which will be recorded on the UK register as if they had been applied for and registered under UK law.

They will be created automatically, free of charge, with no action required on the part of the rights holder. Furthermore, each RCD will be administered as if it were applied for under the UK law, retain its priority and renewal dates, inherit any limitations imposed on and benefits enjoyed by its corresponding RCD, and reflect any declarations of invalidity made pursuant to EU proceedings.

As fully independent UK rights, these may be challenged, assigned, licensed or renewed separately from the original RCD. Such designs will be known as "Re-registered designs".

Once re-registered UK design rights are created, a separate renewal fee will apply for each re-registered UK design and corresponding RCD. For future renewal, the re-registered design will retain the existing renewal date of the corresponding RCD.

Opting out 

UKIPO will create approximately 700,000 re-registered designs on 1 January 2021. Holders of the new right will be allowed to opt out of holding it, provided that it has neither been assigned or licensed, nor proceedings been started pursuant to it. Opting out will mean that the re-registered design will be treated as if it had never been applied for or registered under UK law.

There does not appear to be much merit in taking advantage of this provision. If the rights holder has no interest in the UK, it would make sense to allow the creation of the design and then let it lapse at the renewal date. As is the case with trade marks, opt out requests should only be submitted after 1 January 2021. Any requests made before this day will not be valid.

Pending community designs

For any RCD application that is pending as at 1 January 2021, owners will have nine months to file a UK application that mirrors their EU application, and will benefit from the same filing and priority dates. If the details of the UK application do not match those of the corresponding RCD application, the earlier EU date will not be recognised. These applications will be treated as a UK-registered design application, examined under UK law. The standard UK fee structure will apply and the RCD application will proceed covering the 27 Member States.

Conclusion

In a nutshell, therefore, nothing will change until the end of the transition period on 31 December 2020.

There will be no need to re-file registered EUTMS as new UK national applications and dual trade mark filings (UK and EU) are not necessary at this time, unless there are specific reasons to do so. These might include potential EU oppositions or the need for a swift UK registration.

IP owners should review their trade mark and designs portfolios to assess whether or not comparable UK rights will be beneficial to them. Commercial agreements such as co-existence agreements covering the EU should be reviewed and housekeeping issues should be dealt with. This will help to avoid any inconsistencies being carried over to UK-comparable registrations at the end of the transition period. In addition, confirmation should be obtained from existing UK legal representatives that they have measures in place to act before EUIPO as of 1 January 2021.

This piece does not intend to cover every IP-related issue that Brexit generates. More guidance will be given over the coming months as we continue to monitor the UKIPO and EUIPO announcements in the lead up to 31 December 2020. For more information, visit www.spoor.com

Written by Shamin Raghunandan and Mpho Dzhivhuwo, Spoor & Fisher South Africa