Detail

Update: On what Brexit matters on IP law

29.08.2018 |

Day by day we are getting closer to the B-Day in 2019. In the following we give you a little update on what Brexit matters on IP law.

First of all, some important dates to keep in mind:

29 March 2019 – this is B-Day, Great Britain will be out of the EU. Except that,… Britain remains against all odds.

31 December 2020 – it is planned that the United Kingdom will be in a “transition” period until this date, unless it gets extended. It looks like for the duration of this period Great Britain will in essence still be in the EUTM and RCD system, although the detail of what being “in” means remains to be explained. In any way, as a prerequisite the transition period depends on a full withdrawal treaty being agreed and ratified before 29 March 2019 (Brexit-Day). If that doesn’t happen, no transition period. So, no cold Brexit should happen, looking from the EU trademark and design system. Having said this, it is no wonder that FAZ (Frankfurter Allgemeine Zeitung – Germany’s most serious newspaper) posted an article on 2 August 2018 about the London Stock Exchange that made emergency plans ready for a cold Brexit. www.faz.net/aktuell/finanzen/finanzmarkt/brexit-notfallplan-londons-boerse-ruestet-sich-auf-15719415.html

30 September 2021 – this is the important re-filing date for pending applications as of the end of the transition period.

The European Commission has published on 19 March 2018 a draft of the almost finally negotiated Withdrawal Agreement (TF50 (2018) 35 – Commission to EU27: Draft Withdrawal Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community), see https://ec.europa.eu/commission/sites/beta-political/files/draft_agreement_coloured.pdf (the green coloured provisions are already agreed, the other not yet). The draft contains provisions about EUTM’s in Part IV (Art. 50 through 57) and in Part X (Art. 82 f.) about CJEU’s jurisdiction and the binding effect of decisions taken by any EU bodies. Art. 53 cover the RCDs.

In essence, important for EUTM and RCD owner are the above-mentioned provisions:

• Pursuant to Art. 50 para. 1 and Art. 51 para. 1 of the draft, all EUTM’s registered until 31.12.2020 shall be transformed into a UK national trademark and it should be given the same priority as the EUTM had, as well as the seniority if applicable.

• The big benefit is once the transition period becomes real, you have a registered EUTM or RCD at the end of the transition period, the next day fully valuable rights come into existence, certainly only one in the UK.

• In the event that at the end of the transition period a registration is under attack (for instance no proper use; absolute grounds) the right will be merge into a UK level mark or design but if it then falls at the EU level it will also fall on the UK level.

• In Art. 51 it is provided – however not agreed yet – that the cloning process will be free and automatic. So, no further fees, nor further workload for the right’s owners.

• Owner of a RCD will find big news in Art. 53. Unregistered Community design rights will be metamorphosed into a new right not existing yet. As the new right has to provide the same level of protection as the parent right does, it is clear that the metamorphosis will not end up in the UK unregistered design right regime (UKUDR). The UKUDR has not the same level of protection as the unregistered Community design right offers.

• Pending applications will not be transformed into UK rights but there will be a nine-month re-filing period following the end of the transition period. On this basis it will be possible to refile a pending EUTM or RCD until 30 September 2021, if the owner of a pending right wants to secure the same priority date as the original EU application.

• As far as a right is exhausted within the EU or UK prior to the end of the transition period, then it should remain exhausted, see Art. 57.

• Not yet agreed – Art. 82 provide that the CJEU still has the last word when he is asked by a British Court for interpretation of the law.

• Finally, one word to the provision in Art. 50 para. 5: Non-use of the mark should bear no consequences for the metamorphosed UK mark as long as the EU mark is properly used. And once a mark gained reputation as a reknown mark within the EU, it should be the same in the territory of the UK. It is curious in a way that in Art. 50 para. 5, lit. (c) a transition period is not mentioned in the text. However, it should be consent that it refers to those marks only that have acquired fame as a reknown mark until the end of the transition period.

Comment:

If this legal regime comes into existence, than trademark and design owners will have basically a well-done base of operations. Although certainly some questions remain unanswered and probably will be solved in a lengthy battle before the CJEU, the crucial question is: Will we have a cold Brexit or does the UK Government reach full agreement and ratifies the withdrawal treaty in its entirety until 29 March 2019. The worst case scenario would be that from 29 March 2019 all EU rights have no effect in the UK; this applies to EU trademarks or registered EU design as well as to unregistered Community designs.

Advice for owners:

- Check if the parent EUTM needs to be prolonged on the Brexit-Day (and thereafter), than the metamorphosed right will be due for renewal, too.

- Check your applications in anticipation of the transition period/re-filing period. When assumingly will be the application process finalized?

- Keep an eye on your portfolio – given no cold Brexit – one day after your 50 EUTM’s and 5 UKTM will be accumulated to 50 EUTM’s plus 55 UKTM’s.

Sebastian M. Ober, LL.M.

 



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