Brexit Briefing: IP Update January 2019

Here is our latest Brexit briefing on trade marks and designs. The UK Parliament has emphatically rejected the Withdrawal Agreement and political declaration package that was been agreed with the EU in November last year. This leaves considerable uncertainty as to the outcome of the Brexit process. British MPs remain very divided on the right approach, with several possible outcomes receiving support, but no clear majority of any of them. The cautious approach is therefore to plan for a no-deal Brexit, which would see the UK leaving the EU on 29 March 2019 (“Brexit Day”) without any future arrangements in place.

It is still possible that the Withdrawal Agreement, or a revised version of it, will gain sufficient support before Brexit Day. Options currently on the table include:

• an extension of time of a few more months in order to negotiate an improved deal. Although this is attractive to many MPs the EU negotiators have said that they are not willing to contemplate changes to the Withdrawal Agreement. While some countries within the EU27 might wish to make changes to ensure that a deal can be reached others are opposed to any alterations and unanimity is required both for the extension and any amendments;
• a new referendum asking the British public if they would now like to remain part of the EU and cancel the leaving process. Attractive to many remain-leaning MPs, this option would also require an extension of time, and is highly uncertain as to both procedure and outcome;
• a no-deal Brexit so that the UK leaves the EU without an agreement on Brexit Day. The preferred choice of many Brexit-leaning MPs, this option has the added weight of being the default outcome if nothing else is agreed upon.

In a nutshell, our advice is to prepare for a possible no deal Brexit on 29 March 2019. Key issues to consider for trade marks and designs are:

1. EU trade marks (EU TMs) and Community registered designs (CRDs) which have been registered by 29 March 2019 are likely to be protected in the UK. Assuming that the draft legislation which is published or promised is enacted, we are fairly confident that these registered rights will be replicated as UK national equivalents, and will be enforceable, without any application procedure or official fees. However, as the necessary legislation is still not in place (and in the case of designs has not yet been published), for key rights you may now wish to consider filing a duplicate UK applications to ensure registered protection in the UK after Brexit.

2. If you are looking to file an EU TM or CRD application and also wish to ensure that its trade mark or design is protected in the UK on or close to Brexit, we would advise that parallel UK applications also be filed (at least for trade marks). In the event of a no deal Brexit, we now have just over 2 months until the UK leaves the EU. This is insufficient time for an EU trade mark application to proceed to grant. Where a trade mark application is pending at 29 March, you will have 9 months in which to file a new UK application on the priority of the EU application. This will then will be subject to re-examination by the UK IPO and publication for opposition, and so UK protection will be delayed. There is less of an immediate concern for CRDs, which proceed to grant much more quickly but it should be borne in mind that the scheduled Brexit date is fast approaching.

3. If you have a pending EU trade mark application currently subject to an absolute grounds objection or an opposition that is unlikely to be successfully resolved before 29 March 2019, then you should consider filing a parallel UK application. This approach is not appropriate if it is likely that a parallel UK application will also face an objection or an opposition in the UK on the same basis, e.g. descriptiveness in English or an earlier UK right.

4. There is still uncertainty as to what will happen to EU designations of International Registrations - The UK Government has announced that the same provisions as for EU TMs and CRDs will apply to international registrations designating the EU. However, no draft legislation has yet been published and, given the current uncertainty, it you may also wish to consider now filing parallel UK applications at least for key trade marks and (assuming you are still within the 12 month grace period) key designs.

5. You should review your existing contracts and any new draft contracts to ensure that they are “Brexit-proof”. Focus on definitions of the relevant territory as the “European Union” and of the relevant rights only with reference to EU TMs and/or Community designs. Ensure that there is an appropriate jurisdiction and governing law clause, particularly where the parties are in different countries. Consider whether you would wish now to have the right to terminate the contract, or vary its terms, in the event of a no deal Brexit or any particular consequence of a no deal Brexit.

If you have any questions or require any advice, please contact Nicola Hanglin and Richard Plaistowe.