The Impact of Brexit’s Recent Draft Agreement on IP Rights

The “Brexit” referendum took place a year and a half ago and the terms for the withdrawal began being formally discussed since March last year. Intellectual Property rights had to be - rightly so - part of the debate.

In the light of EU and UK Government’s most recent draft agreement on the country’s withdrawal from the European Union - published March 19th - provisions were made on the protection and enforcement of IP rights, to be of effect after the end of the transitional period.

The draft document is color code organized. Under the IP section, we find segments of text highlighted in neon green – which means those provisions have reached a high level of agreement in the negotiations. That is the case for dispositions on EU trademark registrations, plant variety rights, community rights and database protection. The entire aforementioned are confirmed to remain protected with only minor technical legal revisions left to be discussed in the upcoming weeks.

The article 50 of the agreement, entitled “Continued protection in the United Kingdom of registered or granted rights”, determines that the owner of any of the marks above-mentioned shall, “without any re-examination, become the holder of a comparable registered and enforceable IP right in the UK”.  In addition:  filing, priority and seniority dates and claims will be preserved and the first renewal dates will remain the same as those established for the correspondent EU rights.

However, the situation concerning the protection of geographical indications, on one hand, and pending applications for supplementary protection certificates in the UK, on another, remains unsettled, as the post-Brexit negotiations continue.

There is also some level of uncertainty as to how the unitary rights will be dealt with after the transition period is over, namely, how the situation is to be handled by both the European Union Intellectual Property Office (EUIPO) and EU courts.

As of this matter, the Chartered Institute of Trademark Attorneys (CITMA) offered guaranties of further on-going discussions and engagement with all parties involved. Hence, a meeting between the Institute, EUIPO and the UK Minister for Intellectual Property is set to happen latter this week. The discussion main focus will be of the rights of representation – for instance, the ability of UK chartered trademark attorneys to continue to represent their clients before the EUIPO - and other issues around the withdrawal, such as several different details that still need to be determined. Hereupon follows some of those aspects.

There still is no consensus about the mechanism surrounding the creation of the UK “comparable” right, more specifically, if an additional financial burden or an additional administrative procedure will lie upon the IP rights holders.

The invalidation or revocation of a European Trademark (EUTM) or Registered Community Design (RCD) in the EU resulting of an on-going judicial or administrative procedure at the end of the transitional period will produce the same effects as those of the equivalent UK right. However, the latter will lose the power to endure the hearing of on-going legal actions involving EU-wide rights in what concerns the above-mentioned matters. Despite this, the debate continues as far as who decides whether the grounds for invalidity or revocation apply to the UK and if the country will be bound to EU decisions on the subject.

As for the right of priority on the aforementioned rights, it is guaranteed with a time extension – from the usual six to nine months. The change, in itself, seems to benefit IP rights holders. For increased legal certainty, most applicants will start to file EU and UK trademarks as the transitional period approaches the end, as the granting of the EU trademark might not occur before the end of the transitional period. The usual processing time for EU trademark from application to registration is four to six months, but applicants might opt to also file an UK trademark if there is an increased risk of receiving an opposition. Nonetheless, the extension of the priority right will provide applicants with more time to decide the best course of action.

Non-use based revocations are not to be granted on the grounds that the trademark has not been put to use in the UK before the end of the transitional period. Consequently, an extra period of time will be given for the equivalent UK right to be put to use in the country.

In the draft it seems that the equivalent UK trademarks will be benefiting from the reputation that their “european right” counterpart had acquired at the date of the end of the transitional period. However, is yet to be determined for how long and on what basis.

As for international trademarks and designs in which EU was designated, if the holder obtained previous protection, he will continue to benefit from it at the same level. However, further adjustments on this matter are yet to be densified.

Last but not least, the exhausted rights both in the UK and EU were also addressed. Rights that have reached exhaustion before the transitional period in these territories will remain exhausted after the transition. As of this matter the solution appears to be rather reasonable. However, the problem lies on knowing if the UK will adopt, when the transitional period is over, either international or UK-only exhaustion rights. In this case, it will probably cause some difficulties for those in the supply chain, given that stocks have not been run through. This kind of setting imposes the obligation of discriminating between goods depending on the first market – EU or UK – they had been put in, before or after the transitional period. 

Regardless of all aspects in need of further clarification, we now have some insight on how IP rights will be treated in the UK when the transitional period is over.

It seems that a real effort is being made in terms of lighting up the debate between the relevant parties. INTA, for instance, will again, as of the end of March, meet with UK authorities on the matter.

Here is hoping that the major issues will be promptly pinpointed and duly addressed on the upcoming round of discussions.