What happens to EU design rights when the UK leaves the EU after Brexit? Sarah Wright, CMS Cameron McKenna IP lawyers Alex Vowinckel, and Parisa Ghatey-Fard give their views on the key steps businesses must take.
Since 2002, UK businesses have been able to protect their designs by virtue of both UK and EU design rights, conferring parallel but slightly differing forms of protection. This article considers the implications for both UK and European businesses who own EU design rights which currently cover the UK and what happens to these design rights when the UK leaves the EU (Brexit) – currently forecast for 31 December 2020 at 11pm UK time (“Exit Day”). We run through the scenarios for Registered Community Designs (RCDs), Community Unregistered Designs (CUDs) and for International Design Registrations designating the EU (IDRs), and provide practical guidance, below.
Registered design rights
(I) Registered Community Designs and International Design Registrations – Automatic Cloning on Exit Day
On Exit Day, RCDs and IDRs designating the EU will no longer confer any protection in the UK (or other UK owned territories such as the Channel Islands and Gibraltar). The remainder of the RCD and IDR retains its full protection for the rest of the EU.
In the UK, a new so-called UK comparable (or re-registered design) will come into existence on Exit Day. This will happen automatically and at no cost to the rights holder. This new design right will be identical to the RCD/IDR designating the EU but limited to the UK territory. RCDs and IDRs registered on Exit Day will be re-registered as national UK design registrations.
The UK comparable design will be treated as if the design had originally been filed as a UK design right.
Owners of RCDs and IDRs who do not wish to retain re-registered design protection in the UK via the UK comparable design may be able to opt out of UK re-registered design protection.
UK businesses can continue to seek RCD and IDR protection by filing new RCDs and IDRs designating the EU, and non-UK businesses can continue to seek UK national design right protection by filing a new UK design application.
(II) Community Design Applications and pending International Design Applications designating the EU – New applications required post Exit Day
On Exit Day, Community Design Applications and pending International Design Applications designating the EU will no longer cover the territory of the UK. They will proceed in relation to the territory of the remainder of the EU, only.
If registered design protection is required in the UK, then a new UK design application must be filed with the UK Intellectual Property Office (UKIPO). Provided that this national design application is filed within 9 months of Exit Day and is identical to the Community Design Application/International Design Application designating the EU, it is possible to claim the priority/filing date of the (corresponding) Community Design Application/International Design Application designating the EU. The usual UK application fees will be payable.
Unregistered design rights
Although Community Unregistered Design Rights only have a term of 3 years (as opposed to up to 15 years for UK unregistered design rights), CUDs have been a useful tool for fashion and luxury brand owners in their fight against plagiarists and counterfeiters.
On Exit Day, CUDs will no longer confer any protection across the UK. The “EU” CUD will retain its full protection for the rest of the EU. In addition, CUDs may cease to apply to designs first shown or marketed in the UK. This is because EU case law is unsettled on whether the disclosure must take place physically within the territory of an EU member state, or whether it is sufficient for that disclosure to become known to the circles specialised in the sector concerned in the EU. In particular, the German Supreme Court, referring to Art. 11 and Art. 110a of the Council Regulation (EC) No. 6/2002 has taken a restrictive view, which would limit protection to disclosures taking place within an EU member state. As things stand, it is unlikely that designs first shown at a UK trade show (such as London Fashion Week) will attract CUD protection after Brexit.
However, scope of protection of the CUD is part of the ongoing Free Trade Agreement negotiations between the UK and the EU. In the UK, a new so-called UK continuing unregistered design right (UK CUD) will come into existence on Exit Day. This will happen automatically and at no cost to the rights holder. This design right is identical to the EU CUD right but limited to the UK territory.
Unregistered UK national design rights provided for in the Copyright Design and Protection Act 1988 will remain unchanged but given the Act’s restricted scope and exclusion of surface decoration, this may be less helpful to designers seeking protection for their collection and may pose an additional existential threat to the UK’s position as a leader within the fashion world including potentially making UK trade events such as London Fashion Week even less popular as a consequence.
Without clarification from EU courts on the territorial requirements for CUD protection, and unless the UK and the EU come to an agreement, it is unsafe for British businesses to assume that a launch in the UK – no matter how high-profile – will satisfy the “making available within the Community” test to confer CUD protection for a British design after Brexit.
(I) Supplementary unregistered design (SUD)
To mitigate the loss of CUDs, the UK government has introduced a new Supplementary unregistered design (SUD). The protection afforded by the SUD will be similar to that conferred by the CUD save that its geographical scope of protection will be limited to the UK. Specifically, SUD protection would require the design to have been “first made available in the UK”.
(II) Important points to note relating to unregistered designs
Possible fall-back strategies for securing both UK and EU protection for unregistered designs include (i) live screening of UK-based launch events at locations within the EU, or vice versa; and (ii) real-time live streams of UK launch events that are accessed and viewed by EU industry representatives, or conversely, live streaming of EU launch events in the UK. In an ideal world, designers should aim to gather clear evidence to demonstrate that their launch event was in fact attended or viewed by people from the relevant trade circles operating in the UK or EU (as applicable). This will allow them to argue that their designs were “first made available” in the relevant territory at their launch event.
However, a disclosure in the UK that is likely to come to the attention of the relevant commercial sector operating within the EU is likely to destroy the novelty of a British design, making it ineligible for CUD. This could deter many British and international designers from showing their new collections at UK trade shows, if this would jeopardise their right to CUD. The uncertainty places the UK at a significant disadvantage to its continental neighbours and threatens the UK’s status as a hub for European design innovation. Designers therefore currently and unless there is an agreement between the UK and EU, face a difficult choice between launching in the UK (and risking the loss of CUD protection) or launching in the EU, potentially forfeiting their right to SUD. In view of this uncertainty, designers should urgently review their launch strategies in the lead-up to Brexit.
Moreover, if the ‘first made available’ rule was applied strictly to require a disclosure physically within the borders of the UK or the EU, both rights could never apply to the same design. British designers would have to choose one or the other. Even if this rule was relaxed – and it was always sufficient for the design to have ‘become known’ to the relevant trade circles in the relevant territory – designers would still face a new evidential burden to be able to claim both rights.
Can copyright bridge the Brexit gap?
The Court of Justice of the EU (“CJEU”) recent decision in Cofemel (C-683/17) has broadened the type of designs which can be protected and provides a ray of hope for UK fashion businesses.
The CJEU held that there were only two requirements for copyright protection under Directive 2001/29/EC (the “InfoSoc Directive”):
a. There must be ‘something original in the sense that it is an intellectual creation of its author’; and
b. for there to be a ‘work’ the subject matter must be expressed in a manner which makes it identifiable with sufficient precision and objectivity.
As a result of the judgment, Member States are precluded from imposing additional requirements such as artistic or aesthetic appeal (read more about Cofemel here). As far as designs and other “objects” protected by copyright are concerned, the judgment confirms that copyright protection is available to designers simply upon fulfilling the requirement of “originality”. Nothing more is required. This is welcome news to many designers (albeit not all) who were previously constrained by the artistic/aesthetic value of their creations.
In the recent decision of Response Clothing Ltd v. The Ediburgh Woollen Mill Ltd, the Intellectual Property Court (IPEC, a specialist IP Court in the UK) turned to EU law and the interpretation given of it by the CJEU in Cofemel. The Court confirmed that conformity with EU law means any requirement of aesthetic appeal must be excluded.
While according to the Withdrawal Agreement existing CJEU case law continues to have binding, or precedent status, it is not clear to what extent (if any) CJEU case law such as Cofemel will be binding on the UK courts post-Brexit. It may be the case that the law around subsistence of copyright protection in the UK may diverge from that established under EU law after Exit Day, with the possibility of designers seeking to protect their designs in the UK being held to a higher standard than they would be in the EU and the impact this may have for the innovation of new works and designs in the UK.
However, the expansion of copyright protection within the EU is helpful since it may provide the only means of protection within the EU for a UK business, while they can rely on the new SUD for protection within the UK (see here for the full judgment:https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/IPEC/2020/148.html&query=(cofemel)).
• Possible fall-back strategies for securing both UK and EU protection for unregistered designs include:
- simultaneous product launches in the UK and EU,
- live screening of UK-based launch events at locations within the EU, or vice versa;
- real-time live streams of UK launch events that are accessed and viewed by EU industry representatives, or conversely, live streaming of EU launch events in the UK.
- Both the UK and the EU design registration systems are available to designers regardless of nationality or location. Accordingly, it is open for UK designers to file EU design registrations to secure pan-EU protection for key designs.
- Businesses based in the EU can likewise file UK registered designs to protect their designs there.
- As both registers currently allow a grace period of 12 months from first publication to register a design, businesses operating across the EU border could also use a combination of strategic product launches and design registrations to secure the relevant rights. However, novelty/ individual character is assessed as at the filing date and design owners should avoid leaving filing too late.
- Registrations are relatively easy to obtain, in most cases it will be impractical and expensive to protect entire collections through design registrations. In fast-moving industries (notably fashion) where new designs are launched frequently and for a short season, designers will therefore need to be selective in choosing which designs to register.
- In-house legal teams should consider running clearance searches before new products launch.
Sarah Wright, Alex Vowinckel, and Parisa Ghatey-Fard are lawyers in the Intellectual Property team of CMS Cameron McKenna Nabarro Olswang