What Brexit Means for Rights Holders

Trademark and industrial design holders will need to act to protect and enforce their rights in the UK
American-Canadian cross-border lawyers often have their eye on future developments across other borders than their own. With Brexit impending by the early Spring 2019 in the United Kingdom, lawyers are looking to several new challenges. This is especially true where their clients have trademark and industrial design concerns.
Brexit will have significant economic implications for trademark and industrial design holders from other nations who wish to protect and enforce their rights in the United Kingdom. We spoke to Canadian lawyers what they foresee.

“There will be a lot of chaos, because in many cases we’re talking about very valuable rights, including rights that have allowed holders to commercialize their businesses and obtain financing,” says Janet Fuhrer, a partner and trademark agent in Ridout & Maybee LLP’s office in Canada’s capital, Ottawa.

The issues arise because many rights holders have chosen the European Union Intellectual Property Office (EUIPO) for filing their trademarks and industrial designs on the basis that their rights will apply to all 28 EU member states. “Some even let their UK registrations lapse,” Fuhrer says.

But once the United Kingdom leaves the  European Union — which must happen by March 29, 2019 unless all member states, including the UK, agree to an extension — EUIPO protection will no longer apply in the UK. “So, any client who has real concerns should think about getting UK registration.”

Registering in the UK is not without obstacles, though. For industrial designs, for example, registration may be precluded because of temporal limitations. “The usual requirement is that designs must be registered within a year of their publication, so it could already be too late for some applicants,” Fuhrer notes.

Otherwise, because design registration in Britain depends on novelty, there’s an argument that designs already protected by the EUIPO do not meet this requirement. And since, arguably, EUIPO protection lapses following Brexit, regardless of whether a rights holder registers in the UK or not, former EUIPO-covered IP owners may not be able to seek damages for violations that occurred in Britain before Brexit.

Compounding the uncertainty is the fact that no plan for dealing with these issues has emerged. “Trademark and design protections are creatures of EU legislation, all of which will be left in limbo if the UK simply repeals these laws by withdrawing,” says Mark Davis, a partner and trademark agent in Norton Rose Fulbright Canada LLP’s Toronto office.

“But the prevalent thinking is that the UK will enact legislation that, upon registration in the UK, will convert the unitary EUrights into specific rights in Britain.”

Still, that may be more complicated than it sounds. For example, trademark registration generally requires applicants to demonstrate that the mark has been used in the jurisdiction. Current EU law deems that using a trademark anywhere in the EU constitutes use across the union. “Following Brexit, however, what happens to that trademark?” Davis asks. “Does the deemed use in the UK still apply for purposes of UK registration? It’s all up in the air.”

IP owners, it seems, have two options: wait out the negotiations and see what happens, or register now.

Fuhrer believes that rights holders with substantial interests at stake should be proactive. “Any client really concerned about established brands should think about getting UK registration as soon as possible,” she says. “For new trademarks and designs, simultaneous applications in the EU and the UK are probably the best way to go.”

Pure contractual issues are also looming. For example, licenses and assignments may make territorial reference to the EU, raising the question as to whether the UK will still be within the scope of the rights granted if and when that nation leaves the union. “Companies will have to review their contractual relationships to ensure what the definition of EU [is] with or without the UK,” Davis says.

The situation for patent owners, on the other hand, is much more clear. The United Kingdom has been a member of the European Patent Organisation since the latter’s inception in 1977, and British patents are registered with the Organisation’s European Patent Office. 

The European Patent Organisation is independent of the European Union (which was formed in 1993), even though all the EU member states belong to it. So, British patents will remain unaffected and applicable in all of the European Patent Organisation’s 38 member states, regardless of Brexit.

Stay tuned.