12 September 2017
Article, News

Brexit and EU trademarks – state of affairs

Let me begin by disappointing you. There isn’t any real news just yet. Speculations however are running wild.

In the context of Brexit negotiations, the European Commission has put its vision to paper with regards to intellectual property rights and geographic indications. It conveys how the EU want the UK to proceed with regards to these topics. The upshot is that after Brexit all EU rights must be automatically recognised free of cost. Everything must be included in the British registry free of charge and with complete adherence to the EU data (such as date of registration, renewal date, priority, seniority, usage obligations, etc.). This must be adhered to for all EU trademarks, but also for European design registrations and unregistered EU design rights. This also applies to EU breeders’ rights, protected geographic indications, protected indications of origin and other geographic and traditional indications, especially with regards to wine. In the case of pending applications, the requesting party must be given the opportunity to continue the application in the UK as well.

With regards to EU trademarks, the vision of the European Commission holds that trademark owners need not take any action in order to automatically obtain British registration next to their EU registration. In its documentation UKIPO refers to this ‘Montenegro model’ as one of the options. When Montenegro ceased to be a part of Serbia & Montenegro, all trademarks remained valid in both areas without requiring any action from the trademark owners.

Of course this sounds marvellous. The Brits, who were so keen on leaving the EU, must pay for their own infrastructure improvements necessary to expand the UKIPO databases in order to handle a ‘few extra’ trademarks. By combining several databases you can see how many valid British trademarks are registered. Of course this number varies per day, but the number resides in the order of magnitude of 600,000. There are over a million valid EU trademark registrations. This means that as of the day following Brexit, UKIPO must suddenly manage three times as many trademarks as before, and the European Commission holds the position that these costs should be accounted for by the UK itself. On the flipside this new situation will lead to a much higher renewal rate which will eventually compensate for the extra costs.

WIPOs statistics show which countries hold the highest number of registered trademarks. The UK currently comes in 13th, but with this model they would move up the ranks to 4th place.

The increase is even more dramatic with regards to design registrations. The UK currently counts around 40,000 British registrations, as opposed to more than 700,000 EU designs that will be added to the mix.

Whether the transition will be automatic or per request, and whether it will proceed free of charge or not; all these things completely miss the point. What to do with an EU trademark application that is currently being opposed? After Brexit, will this result in two opposed applications? How about obligations of use? If in the case of an opposition procedure that started before Brexit an opposing party has provided proof of use in Germany, France and Spain, does this still count towards opposition against British registration? Many questions like these must be answered and it is without a doubt necessary to create a proper framework for a transitional arrangement first, before we can start worrying about whether or not it will happen automatically and at whose expense.

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