Brexit update on Intellectual Property Rights -Draft Withdrawal Agreement – update 15 November 2018

On 14 November 2018, the UK and EU Commission published the draft Withdrawal Agreement, which reflects the status of Brexit negotiations at negotiators’ level on the draft Withdrawal Agreement between the UK and the EU.

The majority of provisions on intellectual Property rights, contained in Articles 54-61 of the Agreement had already been agreed – as reported in our Brexit Update of 29 March 2018. Below, we are providing an update on the previous note:

• Holders of EU trade marks, Community designs and Community plant variety rights that have been registered or granted before the end of the transition period will automatically obtain equivalent registered and enforceable rights in the UK (Article 54(1)). Right holders will be relieved to know that the draft Agreement as well as representatives of the UK government confirm that no fee will be charged for retaining registered protection of trade mark and design registrations. Article 55(2) of the Agreement confirms that holders of registered trade marks, designs and plant variety rights shall not be required to have a correspondence address in the UK in the 3 years following the end of the transition period;
• If an EU trade mark or a Community design is declared invalid or revoked or a Community plant variety right is declared null and void or cancelled in the EU as a result of an administrative or judicial procedure that was ongoing on the last day of the transition period, the equivalent registered right in the UK will also be declared invalid or revoked for marks and designs or declared null and void for plant variety rights. However, the UK does have the right not to declare the corresponding UK trade mark or design right invalid or revoked, if the relevant grounds do not apply to the UK (Article 54(3)). The draft Withdrawal Agreement does not contain any detail about how the equivalent right will be invalidated or revoked and we anticipate that the UKIPO will be considering these issues with the relevant provisions being included in the appropriate secondary legislation passed by Statutory Instrument;
• The corresponding UK trade mark registration will also benefit from the same filing date or priority date as the EU registration (as well as benefit from the seniority of a UK trade mark, if claimed in the EU registration). Furthermore, this corresponding UK trade mark registration cannot be revoked on the grounds that the mark has not been used in the UK before the end of the transition period (Article 54(5)). How long the non-use period will be or when the non-use period will effectively begin remains to be clarified: it is unclear whether the period will start with the first day following the end of the transition period (currently 1 January 2021) or on the date when the UK corresponding right has officially been registered at the UKIPO or on such other date to be determined. The other grounds for revocation (e.g. the trade mark has become the common name in the trade for a product or service for which it is registered) are presumably not affected and may be invoked at any time post-withdrawal;
• Similar provisions are in place for the resulting UK design and UK plant variety registration to claim the same date of filing and priority date as the corresponding Community design and Community plant variety registration (Article 54(6));
• Owners of EU trade mark registrations are entitled to rely on the reputation of their mark acquired in the EU (e.g. in opposition or infringement proceedings in the UK) up to the end of the transition period. After this period has ended, the continuing reputation will be contingent upon use of the mark in the UK (Article 54(5)). It is noticeable that the draft Withdrawal Agreement does not contain reciprocal provisions enabling UK proprietors to rely on the reputation they may have acquired in the UK in the context of opposition or infringement proceedings on the Continent during the transition period;
• International Registrations of trade marks and designs designating the EU and which have been registered before the end of the transition period will continue to have protection in the UK but it will be down to the UK to decide how this is implemented (Article 56). It is noticeable that the draft Withdrawal Agreement does not contain any provision relating to pending international trade mark applications or registrations or pending international design applications;
• Unregistered Community design rights existing prior to the end of the transition period will become an enforceable intellectual property right under UK law for at least an equal remaining period of time (Article 57). As the UK does not currently have a system in place for unregistered design rights corresponding to the unregistered Community design rights, the UK will have to implement new legislation to meet this requirement. This is welcomed news for UK brand owners who rely heavily on unregistered Community design rights. However, for UK brand owners who wish to obtain unregistered Community design rights, it remains to be seen whether, post-Brexit, designs first made available in the UK will still qualify for unregistered Community design rights. Currently, there is some debate about whether designs first made available to the public outside the EU but which are brought to the attention of the relevant public within the EU can claim unregistered Community design rights, following a German Supreme Court decision called Pastry Press.(For further information on unregistered design rights please see our Brexit notes (UK government guidance on European Designs in the event of “no-deal” Brexit / Supplementary uncertainty for UK designers.)
• Holders of database rights existing under EU law at the end of the transition period will similarly be afforded equivalent enforceable rights in the UK and rights owners will be deemed to satisfy the requirements for holding such rights in the UK (Article 58);
• Applications for an EU trade mark or Community design pending at the end of the transition period (i.e. where a filing date has been accorded) will not automatically be transformed into a UK enforceable right as in the case of registrations. The Applicant with have a right to file an application in the UK for an identical mark and identical goods or services in the 9 months period from the end of the transition period in order to have the same filing date and priority date as the EU trade mark or Community Design application (Article 59(1)). A similar right of priority has been agreed for Community plant variety rights applications, the period for which is 6 months from end of the transition period (Article 59(2)). According to the UK government, EU rights holders will have to pay the usual filing fees to file a new priority application in the UK and with this in mind brand owners should consider filing a UK application simultaneously when filing their EU application. However holders of EU applications which have been opposed and where the opposition proceedings are unlikely to conclude before the end of the transition period, may be better off waiting until the special priority period starts before filing a new UK application in order to obtain the same filing date and priority date as their EU application;
• IP rights that were exhausted in the EU and the UK at the end of the transition period under EU provisions will continue to be exhausted in these two territories (Article 61).

Holders of geographical indications which are protected in the EU on the last day of the transition period will be relieved to know that they are entitled to use the geographical indication, the designation of origin, the traditional speciality guaranteed or the traditional term for wine in the UK, without re-examination and will be granted at least the same level of protection as they enjoy under EU law. This protection will be in place unless and until an agreement on the future relationship between the EU and the UK enters into force and becomes applicable which supersedes this provision (Article 54(2)). The protection of geographical indications has been a point of significant discussion between the UK and the EU, and this provision is contrary to protection of geographical indications which would be granted to non-UK EU rights holders in the event of a no-deal Brexit (please see our Brexit update (UK government guidance on food and drink products protected by an EU geographical indication (GI) in the event of “no-deal” Brexit).

• Further clarity relating to judicial proceedings is contained in Article 86: The Court of Justice of the European Union (CJEU) will continue to have jurisdiction to give preliminary rulings on requests from courts and tribunals of the UK made before the end of the transition period.
• Judgments and orders of the CJEU handed down before the end of the transition period, as well as such judgments and orders handed down after the end of the transition period in proceedings referred to in Articles 86 will be binding in the UK (Article 89(1)).
• The draft Withdrawal Agreement also provides clarity over UK qualified representatives and confirms that they may continue to represent clients before EUIPO in proceedings which started prior to this Agreement and/or during the transition period for the entirety of such proceedings (Article 95).
• The draft Withdrawal Agreement in Article 132 includes a new provision, which allows for a single decision to extend the transition period until an unspecified date: [31 December 20XX].

Overall, the UK Government has largely succeeded in its promise to IP rights holders to provide maximum certainty by agreeing arrangements appropriate to each of the different types of intellectual property rights. This draft Withdrawal Agreement provides additional much needed clarity on Intellectual Property rights post-Brexit. As compared to the draft Withdrawal Agreement published in March 2018 and updated since, further clarity has been achieved, in particular on the costs associated with obtaining equivalent UK registration, but a number of key questions still remain.

The UK government in its technical guidance notices of 24 September 2018 announced legislation by Statutory Instrument and while these notices related to a no-deal Brexit they give an indication also for the procedure in the event that a deal is finalised. We understand that the UKIPO has been working on the detail, and that the draft legislation will be published in due course.

Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community.