IP rights in the UK during and after the Brexit transition period

• The transition period
• What happens at the end of the transition period?
• Action

The transition period

Under the terms of the October 2019 Withdrawal Agreement, as implemented into UK law, there is a transition period until the end of 31 December 2020. During this period, the UK has still been subject to:

1. EU law governing IP rights. EU Trade Marks, registered and unregistered Community designs, sui generis database rights and EU geographical indications will continue in force in the UK;
2. the jurisdiction of the Court of Justice of the EU (CJEU); and
3. the rules concerning proceedings before the EUIPO. All EUIPO proceedings that involve grounds of refusal based in the UK, earlier rights originating from the UK or parties/representatives domiciled in the UK are continuing to run as they did previously.

What happens at the end of the transition period?

In terms of the impact on IP rights, the end of the transition period will be the date when the majority of changes take effect, as set out below.

1. EU trade marks (EUTMS), Registered Community designs (RCDS) and International rights that designate the EU (IR(EU))

Registered rights

At the end of the transition period, the holders of  registered EUTMs, published RCDs and IR(EU)s will automatically become the owner of an additional equivalent UK child (or cloned) right, with the same renewal date, the same filing/ priority date and UK seniority date if applicable.  There will be no re-examination of the mark or design and there will be no cost to the IP owner. (There will also be no publication and no new certificate issued). This means that no existing rights will be lost and marks/ designs will still have protection in the UK.  

Pending applications

Any applicant with a pending application for a EUTM, RCD or IR (EU) at the end of the transition period will need to file for a separate UK right and pay the appropriate fee in order to obtain protection in the UK. If this application is made within 9 months of the end of the transition period, the UK application will retain the same filing (or priority) date as the EUTM, RCD or IR (EU). RCD applications with deferred publication will be treated as pending applications so it will be possible to retain the earlier filing date. However, the publication will only be deferred until the earliest of the RCD or UK deferment period (12 months from the UK filing and 30 months from the RCD filing date).

Renew UK marks at the UKIPO

EUTM, RCD and international rights holders should extend their records to include the new UK right and remember to renew in the UK as well as the EU. The UK has allowed more time for UK renewals that are due within the first 6 months after the end of the transition period. (In those cases, the UKIPO will send a renewal reminder as soon as possible with a 6 month deadline to renew from when notice is received. The usual rules on restoration will apply if the mark is not renewed).  The UKIPO will still create a comparable UK right for EUTMs that expired in the 6 months before the end of the transition period. The UK mark will have "expired" status and its continued effect will depend on the late renewal of the EUTM at the EUIPO (so there is no need for a separate renewal of the UK mark).

Recording interests at the UKIPO

A licence of, or security interest recorded over, an EUTM, RCD or IR(EU) will continue to have legal effect in the UK so the government advice is for licensors to notify licensees of the new right. Interested parties should also register any security or licence against the new UK trade mark or design within 12 months of the end of the transition period to ensure, for example, that they are entitled to full relief in the event of any infringement.

Where an EUTM, RCD or IR(EU) has been the subject of an assignment before the end of the transition that has not been recorded on the appropriate register, the comparable trade mark will be granted to the assignor. The assignor or assignee can apply after the end of the transition period for the registration of the UK child trade mark or design to be assigned into the name of the assignee.

Collective and Certification marks

The UKIPO will notify the holder of any EU collective or certification mark when it needs to inspect the regulations regarding use and possibly request an English translation. If this is not done, the mark will be removed from the UK register.

Opt-out

The holder of any EUTM, RCD or IR(EU) can opt-out of having an additional UK child child right by providing notice to the UKIPO (after the end of the transition period) provided that the UK comparable right has not been used in the UK, is not the subject of any Court proceedings in the UK and is not the subject of any licence or assignment.

Pending opposition and invalidity proceedings at the EUIPO

• The EUIPO has indicated that it will drop any opposition that is still pending at the end of the transition period that is based solely on UK rights. Oppositions based on UK and EU rights will continue on the basis of the remaining rights in the EU27.
• However, EUTMs or RCDs that are subject to pending invalidity or revocation actions that have not reached a conclusion at the end of the transition period will still be registered so the UKIPO will still create an equivalent UK right. The UKIPO has indicated that it will honour the result of the EU cancellation action if the grounds are applicable in the UK, although there may still be a need to file an equivalent cancellation action if this is not the case.
• A UK child mark cannot be revoked on the ground that the corresponding EUTM has not been put to genuine use in the UK before the end of the transition period - use in the EU before the end of the transition period will be applicable. If the 5 year non-use period straddles the end of the transition period, use in the EU before the end of the transition period will be considered together with use in the UK after the transition period.
• Where an EUTM has acquired a reputation in the EU through use in the EU before the end of the transition period, the UK child right can be enforced in the UK based on that reputation. However, after the end of the transition period, the reputation of the UK child right will be based solely on use in the UK. Similarly, use in the EU before the end of the transition period can support an earlier UK child right in opposition proceedings and in infringement proceedings if non-use is raised as a defence.
• The UKIPO will not create comparable UK child marks for EUTMs that have been refused or withdrawn. However, the UKIPO will respect the right of conversion in respect of EUTMs that were refused or withdrawn less than 3 months before the end of the transition period. In that case an application should be made to register a separate UK trade mark, noting on the application that the applicant wishes to claim the earlier filing/ priority date of the EUTM.
• The “jurisdicational cascade” in the EUTM and Community Design Regulations and the enforcement provisions in the Brussels Recast Regulations will continue to apply in the EU and UK for proceedings instituted before the end of the transition period (regardless of when such proceedings end). Any injunction in force prohibiting acts in the UK that would infringe an existing EUTM or RCD will have effect and be enforceable to the same extent with respect to the corresponding UK child right (subject to any order to the contrary).
• Pending referrals made to the CJEU before the end of the transition period will remain with the CJEU and any decisions made in those proceedings will have binding force in the UK.

2. Unregistered Community designs

Any unregistered Community designs that exist at the end of the transition period will be given equivalent protection in the UK for the duration of that right (up to 3 years) under a continuing unregistered Community design.

Going forwards, the UK will also create a new supplementary unregistered design right for those rights that arise in the UK after the end of the transition period, which will broadly mirror the characteristics of the unregistered Community design. The result is that, unless some sort of reciprocity is agreed in an on-going trade agreement, designs which are first disclosed in the UK after the end of the transition period will be protected in the UK but not the EU by this supplementary unregistered design right whereas designs which are first disclosed in the EU after the transition period will be protected in the EU but not in the UK by the Community unregistered design.  This creates a problem for designers who wish to obtain protection for their designs in both the EU27 and the UK because they will have to disclose the design simultaneously in both the EU27 and UK, which practically is going to be extremely difficult.

The current UK unregistered design right is largely unaffected by Brexit, at least for those designs that are created by UK entities or first disclosed in the UK. This provides protection against the copying of original 3D designs that are not considered commonplace in the relevant design field.  

3. Geographical Indications (GIs)

Geographical indications (GIs) and protected designations of origin (PDOs) promote and protect the names of quality agricultural products and foodstuffs such as gorgonzola cheese and Melton Mowbray pork pies. These are very important to the EU and the UK has agreed that the holders of GIs, PDOs and traditional terms for wines that are protected in the EU at the end of the transition period will be entitled to use the GIs in the UK without re-examination and will be granted the same level of protection in UK law (UK protection ceases if the GI loses protection in the EU after the transition period). This arrangement should continue unless and until a new system that supersedes it comes into force.

Going forwards, the UK it setting up its own GI scheme. All 86 UK GIs will be given new UK GI status automatically and EU producers will be able to apply for the new UK GI status. It is still unclear whether the current UK GIs will continue to be protected by the EU’s GI scheme.  If not, the UK government has promised to support UK producers submitting new applications as “third country” producers by providing proof that the GI is protected in the UK.

4. eu domain names

At end of the transition period, .eu domain names can only be registered to: (i) EU citizens (regardless of their residency); (ii) EU residents (regardless of their citizenship); and/ or (iii) businesses established in the EU or having their registered office, central administration or principal place of business within the EU. UK businesses should transfer registrations to an EU-domiciled entity, an EU resident or to other top level domains (such as .com, .co.uk, .net or .org) in order to avoid the loss of any domain names.

5. Database rights

Any EU sui generis database rights that subsist at the end of the transition period will remain in force both in the EU and the UK for the duration of those rights (up to 15 years). However, for rights that arise after the end of the transition period, unless further reciprocity is agreed in the trade negotiations, there is no obligation for the EU to provide sui generis database rights to UK nationals, residents, and businesses. Similarly, only UK citizens, residents, and businesses will be eligible for new UK database rights after the end of the transition period. In order to mitigate a potential loss of rights in the EU, UK owners are being advised to consider other forms of protection for their databases such as copyright or restrictive licensing agreements. However, there is a risk that copyright will not “plug the gap” because it generally protects something different. (Copyright protects creative originality in the arrangement of the database whereas database right protects what is called “sweat of the brow” investment in obtaining, verifying or presenting the data).

6. Copyright, the Digital Single Market and the Copyright Directive

• Portability: The “portability regime” whereby EU consumers can access their online content services (e.g. their Netflix account) when they are temporarily in another EU member state will cease to apply to the UK after the end of the transition period. UK consumers may therefore start to see restrictions on their online content services when they temporarily visit the EU.
• Country of Origin: The country of origin principle in satellite broadcasting and cable retransmission will not apply to the UK so separate copyright clearance on a per country basis will be required for UK broadcasters to broadcast or retransmit into the EEA.
• Copyright Directive: The UK has confirmed that it will not implement the new Copyright Directive because the deadline to do so falls after the end of the transition period. This position could suggest that the UK intends to allow more tech-friendly copyright provisions in upcoming trade agreements with third party countries such as the United States and/ or that it might “cherry pick” those parts of the Copyright Directive that would be most beneficial for the UK without necessarily adopting every aspect.

7. Exhaustion of IP rights

This is the regime that currently operates in the EEA whereby an IP owner cannot use IP rights to prevent the importation of goods into a member state if those goods have already been placed on the market in the EEA by the IP owner or with its permission. The Withdrawal Agreement states that any IP rights that have been exhausted in the UK and EU before the end of the transition period will remain exhausted, meaning that it won’t be possible to stop goods already in the supply chain i.e. enforce IP rights in the UK if they have been previously exhausted in the EU.

Going forwards, if nothing further is agreed, the UK government has stated that the UK will continue to recognise the EEA regional exhaustion regime to provide continuity in the immediate term for businesses and consumers. It is not clear at this stage how long the temporary period will be but the aim is to ensure that parallel imports of goods, such as pharmaceuticals for the NHS, can continue from the EEA into the UK. However, there may still be restrictions on the parallel importation of goods from the UK into the EEA, as the decision to accept "exhausted" goods from the UK rests with the EU27, or alternatively, with the relevant rights-holder in the EU27. Unfortunately, this means that there may be one rule for IP protected goods coming into the UK and one rule for goods coming out of the UK, at least in the immediate term. The UK government is considering all options for how the exhaustion regime should operate after this temporary period and is undertaking a research programme to support this decision. In the meantime, the advice is that, after the transition period, parallel importers should check with EU right holders to see if permission is needed.

8. Patents and the Unified Patents Court (UPC)

There is currently no Europe-wide patent and there will be no change after the transition period to either the UK patent system or the system of patents administered through the European Patent Office (which is not an EU organisation). There are advanced preparations for a “quasi-EU” Unified Patents Court and unitary patent but this had a recent set back because the German court declared that the German approval was unconstitutional. In any event, the UK has now confirmed that it will not be a party to the UPC system if it does go ahead in the future.

9. Supplementary Protection Certificates (SPCs)

The regime for SPCs was set up under EU law and so after Brexit the UK will need to configure a separate system. The Government has confirmed that it will keep SPCs in UK law, in line with the existing EU legislation, but as UK domestic legislation.

10. IP Agreements

Legislation will be in force in the UK at the end of the transition period to ensure that references to EUTMs, RCDs and IR(EU)s in IP agreements entered into before the end of the transition period will be interpreted as also covering the new UK child rights (unless there is evidence that the document was not intended to have effect in the UK).

Accordingly, any licence or security agreement that refers to an EU TM,RCD or IR(EU) and authorises acts in the UK will be treated as if it applies to the comparable UK mark or design (unless there is agreement to the contrary). Where this is the case, the government advice is for the licensor to notify the licensee of the new right and to check that the creation of the new right does not breach any agreement.

Action

Businesses should be reviewing any new IP agreements that they are entering into. If the provisions of these agreements include a reference to the EU, it would be advisable to clarify exactly whether this is intended to also cover the UK after the transition period because this could avoid uncertainty in the future. In addition, despite the above legislative provisions aimed at ensuring continuity of arrangements, businesses may want to consider renegotiating clauses in IP agreements that are of particular importance so there is absolute clarity going forwards.