The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Pavis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Friday, 8 September 2017

Br*x*t and Brands – 568 days and counting – the EU’s position

Further to yesterday’s Brexit post by Rosie Burbidge, the IPKat is happy to host the following analysis by regular contributor Darren Meale.
Here’s what Darren writes:
“Since my guest post in May here, about 110 days have passed but we have not got much clearer to understanding how the UK’s departure from the EU will affect trade marks and other IP rights. That said, as anyone following Brexit will be aware, “progress” is not something we are seeing much of on any issue.
But now – at least at a high level of generality – we know what the EU wants the UK to do. As briefly reported on the IPKat, the European Commission has released its position paper on “Intellectual property rights (including geographical indications)”. It is only five pages long and you can read it here.
What the EU wants
In summary, this is what the Commission wants the UK to do:
1.    Automatic division to the UK. Honour all unitary EU rights after Brexit day (B-Day). This would mean that registered rights should automatically divide to create new and corresponding UK registrations and rights. There should be no fee for this, and other aspects of those rights (renewal dates, priority, seniority, genuine use and reputation requirements) should remain unchanged/be carried over.
2.    The Commission has in mind the following rights which it says should be subject to these principles:
a.    EUTMs;
b.    RCDs;
c.    unregistered Community design;
d.    Community plant variety rights;
e.    protected geographical indications;
f.     protected designations of origin; and
g.    other geographical indications, traditional speciality guaranteed and traditional terms for wine registered under a number of EU regulations.
3.    Applications. Pending applications for these rights as of B-Day should be able to be carried over to UK applications with the same priority date (although there is no request for this to be automatic, it looks like the request is that applicants have this option).
4.    SPCs. Similar assurances are requested in respect of SPCs (Supplementary Protection Certificates) in relation to patents.
5.    Databases. For database rights, the Commission wants both sides to respect the rights of UK and EU nationals and companies, again ensuring that no one loses out.
6.    Exhaustion. Goods for which IP rights were exhausted prior to B-Day in the EU should remain exhausted in the EU and the UK post the UK’s withdrawal. Exhaustion should be as defined by EU law. 
Montenegro
What the EU will get(?)
The EU’s requests (demands?) are not a million miles away from what we all hope will happen, and in great part they are in everyone’s interests that we achieve them. Automatic division of EUTMs and the likes is already one of the UKIPO’s shortlisted options, referred to by CITMA as the “Montenegro” model.
But there are problems with this approach – not least that it will immediately dump a very large number of IP rights on the UK registers and introduce a great administrative burden for the poor old UKIPO – and probably for businesses and their lawyers too. The suggestion that all this has to be done for free – no “financial costs” for rights owners – essentially means that the Commission wants the UK government to shoulder the costs of dealing with it all (another real cost of Brexit to us all in the UK, sigh).
According to TMView, there are currently 562,000 UK trade marks with the status “registered” (WIPO gives a “trademarks in force” figure of 589,559 for 2015 so this figure might be a little low). According to the EUIPO database, there are currently over 1 million EUTMs with the status “registered”. So on B-Day the UK will triple the number of registrations on its books, and shoot up from around 13th in the world in terms of registrations to fourth, behind China, the US and Japan (based on my quick look at WIPO trade mark data). Let’s hope there’s plenty of juice in the UKIPO’s database servers.
For registered designs the UK would go from in the region of 40,000 to something like 770,000. Boom!
There is a lot more to it than just numbers, with some of the issues outlined in my previous post needing to be carefully considered in the case of an “automatic” model. Genuine use and intention to use needs to be thought about. There are currently 20,000 EUTM applications shown as “opposed”. Will the divided UK versions of these applications also be subject to opposition proceedings before the UKIPO? Exhaustion will be interesting: how will we distinguish between goods exhausted within the EU prior to B-Day and those exhausted in the EU27 thereafter? Will the Commission be wandering around the Union with a marker pen?
PGIs and PDOs seem a particular concern for the Commission, its paper pointing out that the UK does not currently have any domestic legislation providing for them. But if the Repeal Bill incorporate all EU law on B-Day, then won’t that do the trick? The press are enjoying this bit, The Sun daubing it a “Parma Drama”.
We await the UK’s view
Unless I’ve missed it, we don’t have a position paper from the UK government on this yet. Despite growing concern amongst many of us that Brexit negotiations are going nowhere and we are 568 days away from crashing into some sort of Mad Max-esque post-apocalyptic society, I’m still hopeful that the trusty UKIPO will do us right, and have something sensible in place to keep IP “business (almost) as usual” in good time.
As reported here, the “Brexit and Brands Roundtable” for brand owners in the Financial Services industry will shortly be meeting with the UKIPO to discuss some of the above questions, and if at all possible I will report back the outcome of that meeting in the next few weeks.
For now, stay tuned, and continue to horde baked beans and non-brand specific four finger shaped wafer-based chocolate bars in case of disaster."

8 comments:

NicelyNicely said...

Genuine use requirements in the UK should clearly not include genuine use solely in the EU-remainder, after exit day, given the perpetual nature of trade marks. This would result in EU rightsholders having a more advantageous position in terms of validity after Britain's exit than those acquiring rights in the UK after exit day, as well as blocking of UK registrations. Far more reasonable would be equivalent treatment with UK rights, allowing cancellation, on application, of grandfathered rights for reasons of non-use in the UK.

Barbara Cookson said...

Frankyly the best option seems to be to make the EUTMR an english law as proposed in the repeal bill. The EUTM would not go on the UK register so no transfer costs but an EUTM would be enforceable in the UK just for the UK. A certain amount of tidying up is needed. For example these EUTM should die on renewal but those applicants who really want to be protected in the UK should be able to renew to the UK register. This would mean an orderly transition and only for those that are using in the UK which a very large number find of no interest.

What I think the UK government can do now is reassure UK companies that their EUTM and CRD will still be effective in the UK after Brexit. This is important for design owners as while the UK fees were high many chose the CRD route. We can see that the more accessible design system in the UK has demonstrated a higher demand - not sure whether these are UK companies - it is in my business. A CRD cannot simply be refiled like a trademark so answering this question would be a good move to provide some certainty.

Anonymous said...

The EC proposal says that the "holder of any intellectual property right having unitary character within the Union and granted before the withdrawal date should, after that date, be recognised as the holder of an enforceable intellectual property right in relation to the United Kingdom".

There is no mention of dividing EU rights or creating new UK registrations and for good reason. When countries have joined the EU, we have had to deal with prior rights in those territories. The UK leaving the EU is not dissimilar. In any EUTM infringement claim, for example, we would simply have to check the filing date to see whether it is enforceable in the UK.

The UKIPO might actually be happy to receive a significant increase in official filing fees when new UK registered rights come up for renewal.

The EUIPO would not be so happy to lose such fees, not least as many may choose to just renew in the UK and not renew their registered EU rights in the EU27.

And that, I suspect, is why there is no suggestion of division or creating new UK registrations.

Like many (most?) IP disputes, it invariably comes down to money.

Darren Meale said...

Anonymous, you could interpret "an enforceable intellectual property right in relation to the United Kingdom territory, comparable to the right provided by Union law" as the UK simply honouring EUTMs, although in my view it is much more likely that we (the UK) will come up with our own UKTMs to mirror the EUTMs, a process I call division to distinguish it from other processes like conversion (which is something else).

Just honouring EUTMs and making them apply here would potentially leave the UK beholden to EU institutions including the CJEU, which the UK government is dead set against.

Kant said...

Does the EU have no idea what national sovereignty means? Why should the UK provide protection to non registered designs (beyond the existing provisions of the CDPA) and PGIs, NGOs etc. after Brexit(R) if the UK government does not see a need for such protective rights?

Anonymous said...

Hi Barbara, it doesn't look like the EU negotiators have heard of the Repeal Bill. Everyone is too busy criticising the UK position to actually pay any attention. While many are opposed to Brexit and have every right to fight against it and/or fight for what they want the future relationship to be, this has to be done in parallel with planning for the event. However, I understand parallel negotiations only apply once blackmail has been successful, so will not happen.

Richy G said...

@ Kant - to protect rights that UK and EU citizens currently have post Brexit and to reduce legal uncertainty. The EU position on EUTMs is the one favored by CITMA and one of the preferred options put forward by the UKIPO.

Look at things said...

Certainty is the biggest problem to be solved when UK is leaving the EU.

Does certainty means we should forget the UPC?

Not a word about the UPC in the document. It is manifestly not an "Intellectual property right having unitary character within the Union", as the "Enhanced cooperation" does not apply to all member states.

The Unitary Patent is also not a right delivered by, or has has been
submitted before an Union body in accordance with Union law, as the EPO is anything but a EU institution.

The more one thinks about this, the more one realises that the constitutional problems linked to the UPC are far from being minor. It is hight time to look at them.

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