Press release dated March 19, 2020
January 31, 2020 marks a historic date in European history: The United Kingdom formally exited the European Union. In the meantime, the UK entered into a transition period that will last until December 31, 2020. During this period, EU law, including international agreements, will be applicable to and in the UK, and, as a general rule, have the same effect as with regard to Member States. Does this mean “business as usual” for the rest of 2020? We don’t think it does. This is a brief summary of the most pertinent IP issues after Brexit and after the end of the transition period.
EU Trade Marks
After the current transition period, EU trademark registrations will automatically be converted into corresponding registered and enforceable UK rights at no charge – maintaining the same filing or priority date, any seniority claim to a prior UK trademark as well as all goods and services claimed in the continuing EU trademarks. They will be called “comparable trade marks (EU)”.
In contrast, EU trade mark applications pending at the end of the transition period require action. There is no automatic conversion, but within nine months after the end of the transition period, a new national UK application for the same trade mark may be filed, maintaining the filing or priority date and any seniority claim to a prior UK mark of the corresponding EU application. Any pending opposition proceedings will continue only with regard to the continuing EU trade mark. Oppositions based only on an earlier UK national mark will become moot.
The rules on pending cancellation proceedings are even more complicated. If an EU trade mark is declared invalid or revoked as the result of an administrative or judicial procedure which was ongoing on the last day of the transition period, the corresponding UK trade mark shall also be declared invalid or revoked. The effective date of the declaration or revocation in the UK shall be the same as in the EU. However, the UK shall not be obliged to declare invalid or to revoke the corresponding UK trade mark where the grounds for the invalidity or revocation of the EU trade mark do not apply in the UK. This is the case, for example, if a request for a declaration of invalidity is based on a national trade mark in one of the remaining Member States.
Special rules were laid down in the Withdrawal Agreement with regard to the enhanced protection of trade marks on the basis of reputation. Under the Agreement, the owner of the corresponding UK trade mark will be able to rely on reputation acquired prior to January 1, 2021 in the EU, but thereafter such protection is dependent on reputation in the UK. The Agreement does not include any provision regarding the situation in the EU 27 after the end of the transition period if the reputation of the mark was acquired in the UK only.
With regard to genuine use, the Withdrawal Agreement provides that the corresponding UK trade mark shall not be subject to revocation because it had not been used in the UK (but elsewhere in the EU). Again, no provision is made for the situation where an EU trade mark had been used only in the UK. It may probably be expected in such a situation that the EU trade mark will be subject to revocation thereafter only after five years of non-use in the EU 27.
The most difficulties will be experienced on the level of enforcement. Any infringement proceeding initiated before the exit day will be decided on the basis of the current regulations as provided for under the EU Trademark Regulation. However, it is unclear whether pan-European injunctions will still be available now and/or after transition period (if not in effect before the exit day). There are no rules in place yet on the effects of proceedings filed with a non-UK court in relation to the UK, which leads to a high degree of uncertainty.
Formal and practically important aspects of civil procedure may prove to be more difficult as well. It seems possible (or at least uncertain) that UK plaintiffs will need to provide security for costs in German court proceedings in the future. The service, notification and enforcement of decisions will be more costly and time-consuming as EU rules (such as the Brussels Regulation) may no longer apply after the transition period expires.
The aforementioned principles apply to registered Community designs mutatis mutandis. The converted right will be known as a “re-registered design”.
With regard to unregistered Community designs, design rights existing before the end of the transition period will be converted into “continuing unregistered Community designs” and protected in the UK for the remainder of their term. To fill the gap in protection between existing UK unregistered design and unregistered Community design rights, the UK government amended its law to create national “supplementary unregistered designs” which mirror the requirements for unregistered Community design rights.
International registrations of trade marks and designs
Pursuant to the Withdrawal Agreement, the UK must take measures to ensure that natural or legal persons that have obtained protection before the end of the transition period for internationally registered trade marks or designs designating the EU pursuant to the Madrid system for the international registration of marks, or pursuant to the Hague system for the international deposit of industrial designs, enjoy protection in the UK for their trade marks or industrial designs in respect of those international registrations. The UK government is currently in contact with WIPO to reach an agreement of how these objectives may be attained.
European patents and SPCs
“Business as usual” holds true for European Patents. The UK remains a contracting state to the European Patent Convention. The European Patent Organisation is an independent international organization not subject to EU rules.
Applications for the grant of a supplementary protection certificate (SPC) pending at the end of the transition period in the UK will continue to be governed by the applicable EU legislation and, if granted, must accord protection at the same level as that provided for in the applicable EU legislation.
Unitary patents and Unified Patent Court (UPC)
Under the UPC Agreement, the Unified Patent Court would be competent for EU-wide infringement and revocation proceedings concerning unitary patents and national EPO patents. The UPCA was signed on February 19, 2013 by 24 EU Member States (all members except Italy, Poland, and Spain; Croatia was not an EU Member State at that time) and is currently ratified by 16 Member States, including by the UK. Recently – at the end of February 2020 – it has become known that the UK will not participate in the UPC Agreement. On March 5, 2020, the Chair of the Preparatory Committee stated: “Following the UK government’s decision not to pursue remaining in the Unified Patent Court and in the Unitary Patent, work on the implementation of the Unified Patent Court continues. Once Germany will be in a position to ratify the UPC Agreement and the Protocol on the Provisional Application, arrangements will be made to deal with the practical implications of the UK‘s departure. These will be published in due course.”
Civil litigation, infringement actions
The Withdrawal Agreement provides that the rules of the Brussels I Regulation on jurisdiction and the recognition and enforcement of judgments will continue to be applicable to civil litigation pending in the UK or the EU 27 with effect on the UK at the end of the transition period. There are, however, no specific rules regarding actions for the infringement of EU trade marks or designs. Since EU trade marks and designs will no longer extend to the UK after December 31, 2020, it would seem logical that any injunctive relief granted after that date based on these rights cannot extend to the UK.
As regards civil actions initiated in the UK after 31 December 2020, and in the absence of any agreements reached in the course of this year, the UK will be treated as any other third country without being bound by a specific agreement of jurisdiction and enforcement of judgments.
As regards cases brought in the EU 27 after December 31, 2020 by persons or entities domiciled in the UK, and in the absence of any agreement between the EU and UK, the respective rules of the Member States with regard to the participation of third-country parties would apply. As regards Germany, it may well be that UK plaintiffs will need to provide security for costs in German court proceedings.
Although the transition period is touted as “business as usual”, this is certainly not the case because businesses need to take steps to prepare for the time after the transition period. The effects of EU-wide protection and a harmonized system for trade marks, designs and SPCs will be lost after transition. In view of the automatic continuation of registered EU trade marks and designs after the end of the transition period, the best way forward, for the time being, would be to obtain such registered rights prior to January 1, 2021. Similarly, pending applications may be converted, maintaining their original filing and priority dates, which would obviate the need for filing such applications directly in the UK now (prior to the end of the transition period).