News

27.03.2019

Brexit: What steps do you need to take in the event of a ‘no-deal’ scenario?

‘Brexit’ has again been postponed and it is still not clear whether there will be an orderly departure of the United Kingdom from the EU, or whether a ‘no-deal’ Brexit will occur instead.

In the following, we provide an overview of the various consequences that a ‘no-deal’ scenario will have for your intellectual property rights (as at 12 April 2019).

The key messages are the following:

  • If, when Brexit occurs, you hold a registered European Union trade mark or Community design, a corresponding and equivalent British right ensues automatically – without the need to file an application or pay official fees. You do not have to do anything, in other words.
  • If any applications for European Union trade marks or Community designs are still pending when Brexit occurs, an application for the equivalent British right must be filed within nine months (but has the same filing date as the EU application).
  • Patents granted by the European Patent Office are not EU patents. Brexit will not affect Great Britain’s membership of the European Patent Organisation. Annual fees for British parts of existing European patents merely have to be paid separately to the United Kingdom Intellectual Property Office (UKIPO), as before.

Please consult the following overview for further details.

If you have any questions regarding the above, please do not hesitate to turn to your contact at Eisenführ Speiser.


The United Kingdom is now due to leave the European Union on 31 October 2019 (‘Brexit Day’) in the event of no deal. The negotiators concluded a Withdrawal Agreement that still needs to be ratified at the political level. If the United Kingdom leaves the EU on terms that are identical or substantially similar to that agreement, the current status quo would effectively continue through a transition period ending on 31 December 2020. However, the British parliament recently refused by a large majority to ratify the Withdrawal Agreement in its present form, and in the absence of any alternative arrangements there is a risk of a hard, ‘no-deal’ Brexit.

Such a ‘no-deal’ Brexit would have major impacts on the continued protection and enforcement of European Union trade marks and Community designs, as well as international trade marks and designs that claim protection throughout the EU.

In Sections I and II below, we outline the plans pursued by the British government and the European Commission, respectively, in the event of a ‘no deal’ exit. In Section III, we provide detailed recommendations on how to respond to such a scenario as it pertains especially to trade mark and design rights.

I. Draft Withdrawal Agreement

The British government has now published a draft agreement detailing how the United Kingdom of Great Britain and Northern Ireland will withdraw from the European Union under Article 50 TEU (the ‘Withdrawal Agreement’). The Withdrawal Agreement specifies a transition period which shall end on 31 December 2020.

According to the proposals put forward by the British government, the following applies during the transition period:

  • The transition period shall start at the date of Brexit and end on 31 December 2020.
  • Within the transition period, Union law shall continue to apply to and in the United Kingdom.

In a no-deal scenario, in contrast, Union law shall no longer apply.

The Withdrawal Agreement stipulates the following:

1. ‘Registered EU rights’:

  • European Union trade marks and Community designs that have been registered or granted before the transition period ends shall be subsequently treated (and be enforceable) as if they had been registered in the United Kingdom (Withdrawal Agreement, Article 54). The same principle applies to internationally registered trade marks, if and insofar as they extend to the European Union (Article 56);
  • this is automatic, so there is no need to file an application or pay any fees (Article 55);
  • the right is obtained on the withdrawal of the UK, even though it may take some time before a corresponding entry is made in the British register by the relevant UK entities;
  • these rights in the United Kingdom are referred to respectively as ‘newly registered trade marks’ and ‘newly registered designs’ (‘corresponding right in the United Kingdom’);
  • if the underlying EU right is destroyed or unilaterally withdrawn during the transition period, the corresponding right in the United Kingdom shall also be extinguished.

2. Opt-out option: Holders of registered EU rights can decide to waive the corresponding right in the United Kingdom, however, by declaring an ‘opt-out’.

3. Pending applications: If, on Brexit Day, an application for a European Union trade mark, an international trade mark (EU), a Community design or an international design (EU) is pending (or if publication of a Community design is postponed), this will not be converted into a corresponding British application; however, the applicant may apply within nine months after Brexit Day for registration of the same trade mark (for some or all of the same goods or services) or for registration of a design, while keeping the priority of the corresponding application for an EU right.

4. Extensions, priority and seniority: Corresponding rights in the United Kingdom shall be treated in such a way that they have the same extension dates and priorities (and seniorities in the case of trade marks) as the registered EU rights from which they are derived.

5. Unregistered Community designs which arose before Brexit Day are still protected and enforceable in the United Kingdom for the rest of their term, and are referred to as ‘other unregistered Community designs’.

6. Representation: Existing representatives of registered EU rights will be able to continue operating as the representatives for corresponding rights in the United Kingdom before the UKIPO.

7. A licence in respect of a registered EU right for the territory of the United Kingdom shall apply to the corresponding right in the United Kingdom on the same terms, but subject to the proviso that the amendments required for its use in the United Kingdom are made.

8. Use of the respective trade mark in the EU before Brexit Day qualifies as use of the comparable trade mark for the purposes of opposition, infringement, expiry and revocation proceedings in the United Kingdom in respect of that trade mark.

9. In opposition and infringement suits, the notoriety of the respective trade mark in the EU before Brexit Day is taken into consideration in the United Kingdom on the basis of the comparable trade mark.

10. Pending proceedings: If, on Brexit Day, a registered EU right or an unregistered Community design is the subject-matter of proceedings pending before a British court operating as a European Union trade mark court or Community design court, the court may

  • a. grant a temporary injunction, in the event of an action against infringement of the registered EU right or the unregistered Community design, in order to prohibit unauthorised use of the corresponding right in the United Kingdom or to uphold the unregistered Community design; and
  • b. revoke the registration of the corresponding right in the United Kingdom or declare its registration to be void, in the event of a cross-action for declaration of expiry or nullity in respect of the registered EU right.

II. No-deal – the EU’s position

The most relevant EU document on the impacts of Brexit on intellectual property rights – in the event of no withdrawal agreement being concluded (the ‘no-deal’ scenario) – is a briefing issued by the European Union Intellectual Property Office (EUIPO) on 18 January 2018 entitled ‘Impact of the United Kingdom’s withdrawal from the European Union on the European Union trade mark and the Community design’. The most important points to note here are the following:

  • 1. The British courts are no longer empowered to act as EU trademark courts (or Community design courts), or to issue court orders with EU-wide applicability in respect of European Union trade marks (and Community designs).
  • 2. Use of a European Union trade mark in the United Kingdom before Brexit Day will still constitute use of the EU trade mark (but use in the United Kingdom after Brexit Day will not).
  • 3. Rights of the United Kingdom: After Brexit Day, the rights of the United Kingdom can no longer be used as a basis for opposition or revocation proceedings against a European Union trade mark, and any opposition or revocation proceedings that are pending before the EUIPO on Brexit Day and which involve British rights only, shall be refused.

III. What steps should be taken if a ‘no-deal’ Brexit is assumed?

Assuming that the draft British regulations enter into force by Brexit Day, the following points need to be heeded:

Registered trade marks and designs

  • Holders of registered EU rights and unregistered Community designs do not need to take any steps. These rights will still be automatically protected and enforceable in the United Kingdom.
  • If the trade mark is to be used either in the United Kingdom only, or in the EU-27 Member States, then extended territorial use should be considered in order to escape any attacks on the trade mark due to lack of use.
  • Any registered EU rights that have to be extended before Brexit Day (or, if renewal is overdue, within the six-month extended period), should be renewed before Brexit Day to ensure that they continue to enjoy protection in the United Kingdom (although the draft regulations allow for later extension and restoration of rights).
  • If the renewal date is after Brexit Day, the corresponding right in the United Kingdom must be renewed separately.
  • If the existence of a corresponding right in the United Kingdom violates an obligation or agreement, steps must be taken to ensure that an ‘opt-out’ is filed as quickly as possible after Brexit Day.

Assignments, licences and security rights

Clients should check any assignments, licences and security rights in respect of registered EU rights or which pertain thereto, so that they are extended to the corresponding rights in the United Kingdom before Brexit Day.

Applications

If any applications for registration of trade marks or designs are pending on Brexit Day, there is a nine-month window after Brexit Day in which the respective priority applications can be filed in the United Kingdom. Filing a parallel application in the United Kingdom before Brexit Day should only be considered if registered protection is needed particularly urgently.

Patents and supplementary protection certificates for pharmaceutical and plant protection products

Patents granted by the European Patent Office are not EU patents. Brexit will have no effect on Great Britain’s membership of the European Patent Organisation, regardless of whether a Withdrawal Agreement is ratified. It still suffices to pay annual fees separately to the UKIPO for the British parts of existing European patents. Supplementary protection certificates which extend the duration of British patents or British parts of European patents for pharmaceutical and plant protection products are based, in contrast, on EU regulations. According to the Withdrawal Agreement, the relevant EU regulations are to be transposed into national British law.

Contract review

Even if the United Kingdom retains its current regional rules on exhaustion of rights, it cannot be assumed that the EU will take the same approach to such matters. This means that parallel imports into the EU from the United Kingdom will probably constitute an infringement of the European Union trade marks.

Agreements applying throughout the EU, such as licensing, sales and coexistence agreements, may therefore contain provisions that will no longer work properly after Brexit Day; it is therefore advisable to review important existing and new agreements to ensure they are ‘Brexit-proof’ (especially regarding the identification of IP rights and the definition of regions and markets, applicable case law and governing law). In the event of a ‘no-deal’ Brexit or a specific consequence of a ‘no-deal’ Brexit, the right to terminate or amend the agreement may be considered. Steps should then be taken to conclude suitable amendments with the other party or parties.

Opposition and revocation proceedings (due to relative impediments to registra-tion) before the UKIPO and the EUIPO

Pending oppositions and actions for revocation (due to relative impediments to registration) before the UKIPO and the EUIPO should be checked.

In view of the current uncertainty, new oppositions and actions for revocation before the UKIPO should be based as far as possible on British rights. New EUIPO oppositions and actions for revocation should not relate (solely) to British rights, but as far as possible to rights held in an EU-27 Member State.

Infringement proceedings

If an infringement has been committed throughout Europe, bringing separate actions in the United Kingdom and in an EU-27 Member State should be considered as an option. The order in which such dual proceedings are instituted should take into account that a stay of proceedings may be necessary.