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18 December 2019

The Brexit saga continues: After several postponements of the United Kingdom's withdrawal from the European Union (EU), the new deadline is 31 January 2020. Until then, the two parties have time to agree on the withdrawal arrangements – and to have this agreement politically approved. Without an agreement, a "no deal Brexit" will become more likely: Due to the lack of EU membership after the exit date and without a new contractual solution ("withdrawal agreement"), numerous EU regulations will no longer apply in the United Kingdom (UK). We explain the effects of Brexit on trademark rights and how trademark owners should prepare.

Good News: What will not change for trademark owners

Let's start with the good news for trademark owners:

Registered national trademark registrations in the UK will remain unaffected even by a "no deal Brexit". They will still be subject to the national trademark law of the UK and will need to comply with the relevant deadlines, fee regulations, etc.

International trademark registrations (IR for short) via the Madrid trademark system claiming protection in the UK, will not be affected by a "no deal Brexit" either. The Madrid trademark system is administered by the World Intellectual Property Organization (WIPO). The UK's association with the Madrid System does not depend on UK's membership in the EU. It is important to note that protection in the UK will only remain unaffected by Brexit if the IR designates the UK and not to the EU as a whole (so-called European Union Trademark, or EUTM for short).

In addition to the registered trademarks, pending national applications in the UK and pending extensions of protection under the Madrid System for the UK also remain unchanged.

The UK will continue to recognise regional exhaustion for parallel imports of branded goods from the EU or European Economic Area (EEA) – at least for an interim period. International exhaustion will continue to apply to parallel imports of branded goods from the UK to Switzerland – irrespective of Brexit.

Bad News: What might change for trademark owners

Not all trademark rights will remain unaffected by Brexit: Based on UK's EU membership, it has so far been possible to achieve trademark protection for all EU member states, including the UK, with a single trademark application as a EUTM. If the UK and the EU cannot agree on the continued validity of EUTM in the UK, this protection will (theoretically) cease to apply in the UK after Brexit. How the UK wants to prevent this scenario is described below.

In addition to trademark registrations, Brexit will also affect jurisdiction in trademark disputes: So far, owners of national, UK trademarks have also been able to challenge Union trademarks before the European Union Intellectual Property Office (EUIPO) in opposition proceedings. After Brexit, the basis for such proceedings before the EUIPO based (exclusively) on national trademark rights in the UK will no longer exist: Ongoing proceedings must be written off or rejected by the EUIPO ("dismissed for lack of valid basis"). As the UK will no longer fall under the jurisdiction of the EU, any legal orders issued in the EU after Brexit, will no longer apply in the UK.

There will be new restrictions on parallel imports from the UK into the EU/EEA: Branded articles placed on the UK market after Brexit by or with the consent of the right holder will no longer be considered exhausted in the EU/EEA (assuming that the UK does not become an individual EEA member). In the opposite case of imports from the EU/EEA to UK, UK will have to define in its own law whether to follow the national, regional or international exhaustion regime in the future.

In addition, proof of use in the UK may show sufficient use of a EUTM only for the period prior to Brexit. After leaving the EU, evidence of trademark use in the UK will no longer be suitable to defend a EUTM against attacks for alleged non-use.

Happy End: How trademark owners may secure their trademarks

UK has made adjustments in its national law to protect trademark holders against loss of rights (even in case of a "no deal Brexit"):

After Brexit, the UK automatically converts registered EUTM (regardless of an agreement with the EU) into "comparable trademarks" against no additional fees. The modalities for this transfer have to be clarified, but UK announced to only impose "minimal administrative burden" on trademark owners. The new national UK trademark will follow the national trademark law of the UK and the corresponding renewal deadlines, fee regulations, etc. This conversion rule applies regardless of whether the EUTM was registered directly with the EUIPO or via an international registration.

The conversion is, however, not mandatory: There may be reasons in individual cases why the owner of a EUTM does not want a national trademark registration in the UK. Trademark owners should therefore be able to opt out of conversion ("opting-out"). However, the opting-out possibility will only be available as long as the trademark owner has not made use of his "comparable trade mark" in the UK: Contracts such as licensing or transfers as well as pending legal proceedings initiated by the trademark owner regarding the "comparable trade mark" exclude a later opting-out. We recommend that owners of registered EUTM review the situation (e.g. regarding potential collisions) in the UK even prior to Brexit and decide on a conversion or opt-out.

Any license or security interest relating to a EUTM that would be applicable in the UK prior to Brexit will also apply to the new comparable trademark. Nevertheless, it is worth examining the wording of the relevant contractual arrangements to determine whether the parties' consensus would also cover the UK - even after leaving the EU.

The applicant must (further) become active in case of applications for EUTM which are pending at the time of Brexit. The UK will allow conversion into a national trademark application. However, the applicant must file the relevant request in the UK, unsolicited, within nine months after Brexit. In the case of a conversion, UK will carry out a new examination under the national trade mark law and the national application fees will be due. A later registration in the UK then follows the national law. With the request for conversion, the applicant can secure the original application and priority dates in the UK. Without any such request, the applicant loses his application at least for the UK. We recommend that holders of pending EUTM applications apply for such conversion, unless protection in the UK is not desired in the particular case.

For new EUTM applications before Brexit, we recommend parallel filings in the UK as a safeguarding measure, as it is uncertain whether today's EUTM applications will be registered before the Brexit date.

For disputes concerning EUTM pending before British courts or authorities on the Brexit date, the UK will provide for their continued processing as if the UK were still an EU Member State. However, the resulting orders or orders which have already become final, will only apply to comparable trademarks in the UK – not the EUTM after Brexit.

For proof of use regarding comparable trademarks, the UK will also recognize the use of the respective EUTM in the EU before the Brexit date (but not after).

We advise Swiss and international trademark owners comprehensively on legal trademark strategies and measures to protect trademark rights. Our intellectual property team will be pleased to support your trademark protection in Switzerland and abroad.

Author: Delia Fehr-Bosshard

Topics: BrexitEUIntellectual PropertyMedia & MarketingTrademarks

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