How would a no deal Brexit affect brands?

4 Oct 2018 , 3:24pm

With the chances of achieving a Brexit deal looking more perilous as time passes, the UK Government has been issuing a series of Notices setting out the implications for a range of scenarios in the event of no deal being reached. Sally Britton and Nina O'Sullivan of Mishcon de Reya LLP look at the Notices focussing on protection and enforcement of IP rights.

Whilst these Notices do not contain any surprises (in that they set out the default position with the UK as a 'third country'), there are a number of reassurances for brand owners on some key points. There are also some steps that may need to be taken at this stage.

The UK Intellectual Property Office (UKIPO) has also now updated its 'Brexit – The Facts' guidance.

EU Trade Marks (EUTMs) and Registered Community Designs (RCDs)

Existing registrations

In relation to existing EUTMs and RCDs already on the register, the Government confirms that they will be protectable and enforceable in the UK post-Brexit through an equivalent right registered in the UK, even in the event of a no deal. This will take place with 'minimal administrative burden' and it appears that it may take place automatically (although this is not made clear), as a rights owner will be notified and can opt-out of its rights being preserved in this way. Whilst this is welcome confirmation, the Notice is silent on whether this will involve any fee. Robin Walker, Parliamentary Under-Secretary of State for Exiting the Union, had confirmed in Parliament in July 2018 that there would be no fee and, given that it appears that the process will happen automatically (or at least with minimal administrative burden), with rights owners then being able to opt-out, it seems likely there will be no fee payable (but it would have been preferable for this to be stated expressly).

Applications for EUTMs and RCDs

Applications for EUTMs and RCDs will not be treated in the same way as existing registrations. Instead, if an application at the European Union Intellectual Property Office (EUIPO) remains outstanding at the date of exit, the applicant will have a nine month period in which to file a UK application, and will then have to pay the relevant UK application fees. Applicants will not be notified and will have to take positive steps to pursue a UK application. Whilst that UK application will retain the same priority date as the EU application, there is the risk that the applicant will have to replicate arguments and submissions that it has already made before the EUIPO.

Given the proximity to the possible exit day in March 2019 (and on the assumption that an 'implementation period' to the end of 2020 cannot be agreed), rights owners currently planning EU-wide applications should carefully consider whether to take the step of filing a UK application at the same time. 

International Registrations designating the EU

The Government states that it is working on continued protection for international registrations (filed through the Madrid and Hague systems) which designate the EU as the area of protection, alongside the World Intellectual Property Organisation. However, it is yet to issue guidance on this issue and so brand owners should consider filing strategies in terms of designations carefully. UK applicants should also take advice before filing any international registration based on a EUTM if they do not have a real and effective place of business in the EU post-Brexit.   

Disputes before the EUIPO

It is also important that brand owners involved in proceedings before the EUIPO (such as opposition and cancellation proceedings), where they are relying upon UK rights, review the current status of those cases, and take necessary steps. In the event of a no deal Brexit, it will no longer be possible to rely on those UK rights in proceedings before the EUIPO, even where those proceedings are already on foot.

Unregistered Designs

The Government's Notice on Trade Marks and Designs confirms that all existing EU Unregistered Designs will continue to be protected and enforceable in the UK for the remaining period of protection. 

Further, a new 'supplementary unregistered design right' will be available post-Brexit, which will mirror the characteristics of the EU Unregistered Design. However, businesses marketing their designs internationally will have to consider their approach carefully. It will mean that designs first disclosed in the UK will be protected by the new supplementary unregistered design right in the UK; however, those designs will not be protected in the EU by the EU unregistered design. Further, where a design is first disclosed in the EU, it will not be protected by the new supplementary unregistered design in the UK (based on the current interpretation of the law on this issue). This will mean businesses will need to consider taking steps to ensure simultaneous publication of their designs in the UK and the EU (which remains untested legally), or incur the expense of obtaining registered protection, both in the UK and in the EU.

Other issues

Alongside a Notice on Patents (where the Government notes the risk that the Unified Patent Court and Unitary Patent may not be up and running before Brexit), other significant points arising from the no deal Notices are as follows:

  • Copyright. Cross-border copyright issues will be particularly impacted in the event of a no deal but in the main existing copyright rules will not be affected. Key points to note from the Copyright Notice include, for example, the fact that UK-based nationals, residents and businesses owning database right in their databases may find that those databases are no longer enforceable in the EEA. Database right protects the investment in obtaining, verifying or presenting the contents of a database. Whilst the Government notes that copyright may be available to protect databases, this is only likely to be in exceptional circumstances.  It may be necessary to turn to enhanced contractual protections.
  • Parallel imports and exhaustion of IP rights. The Government has proposed a 'temporary fix' of unilateral alignment to the EEA-wide system of exhaustion, which will mean that parallel imports into the UK from the EEA will be able to continue. However, in the case of parallel imports into the EEA from the UK, an EU rights owner will be able to rely upon its EU rights to prevent those imports. There also remains open the discussion as to what regime the UK should adopt in the future, which will be the subject no doubt of intense lobbying.
  • Geographical indications. This is also a politically contentious issue. The Government proposes to set up a UK GI scheme which will broadly mirror the EU regime, but with the details to be fleshed out following a consultation. The 86 existing UK GIs will automatically qualify for the new UK GI status automatically, but EU producers would have to apply for UK GI status. However, the Government states that it anticipates that UK GIs will continue to be protected by the EU GI schemes post-Brexit; if that is not the case, UK producers would need to submit an application to the EU Commission as a 'third country'.