Bracing for Brexit: IP Considerations to Deal with No Deal

02/07/19

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The United Kingdom is likely to exit the European Union on either March 29, 2019, or on December 31, 2020, depending on whether there is “a deal” (there’s always a chance the parties extend the negotiations or the UK revokes its Brexit notification). Assuming one of these is the “Exit Day,” Intellectual Property (IP) owners need to evaluate their portfolios and operations in Europe now.

To us, a hard Brexit seems a real possibility. Without going into what a “deal” might look like – something the British Parliament is unable to formulate – Her Majesty’s Government is preparing draft legislation that covers a number of IP issues in the event of “No Deal” with no transition period. This short summary, based on the draft legislation as of January 31, 2019, is intended to spark discussions about your European IP portfolio strategy in the worst-case scenario and actions that may need to be taken in the event of a hard Brexit in March. The following portrays neither a comprehensive nor a definitive picture of the situation, which remains extremely fluid and subject to possible delays.

YOUR TRADEMARK RIGHTS

If you have existing EU trademark registrations or International Registrations designating the EU . . .

. . . they need NOT be refiled in the UK as they will all be automatically “cloned” in the UK trademark registry on March 29, 2019, at no cost. Watch for an email notification with the corresponding UK trademark number.

If you have an EU trademark portfolio and the European market is valuable . . .

. . . there may be additional formalities or costs for using and maintaining the marks in the EU and UK. Consider gaps that may arise post-Exit Day, which can be averted by national registrations or extension of protection internationally under the Madrid system.

If you have pending EU applications . . .

. . . refile in the UK as soon as possible. The UK application will retain the priority date of the EU application but will require an additional fee. You will not be notified to refile, so review any requirements and act now.

If you are filing a new EU trademark . . .

. . . consider filing a UK trademark application in parallel, before Exit Day.

If an EU trademark registration is due for renewal before September 28, 2019 . . .

. . . renew the EU trademark by March 28, 2019, to ensure that the renewal covers the UK; as of March 29, 2019, you will incur the cost of filing renewals separately in the EU and the UK.

If you are not using the registered EU trademark in the UK . . .

. . . your new cloned UK trademark may be vulnerable to revocation due to non-use in the UK if it has not been registered and used in the EU for five continuous years as of Exit Day. Consider using that mark in the UK to avoid loss of rights. Remember that use of the mark in Ireland will not qualify as use of the mark in the UK (or the Northern Ireland region) as Ireland is still a part of the EU. Also review the UKIPO registry for other UK marks, including newly cloned UK trademarks, that may infringe upon your trademark rights in the UK.

If you use the EU trademark only in the UK . . .

. . . your EU mark will be more vulnerable to revocation after Exit Day because use during the relevant five-year period only in the UK prior to Exit Day might not be considered as use in the EU. Consider using the mark in the EU now and after Exit Day so that it does not become revocable due to non-use.

If you do not want the new cloned UK trademark right . . .

. . . opt out (if possible), if use or registration of your mark in the UK would breach an agreement with another party or violate a judicial order, or you just don’t ever intend to sell goods or provide services in the UK. Assess your eligibility and the need to opt out.

If you are considering a new International Registration . . .

. . . seek legal advice, as qualification requirements for an International Registration are dependent on the location of the base registration.

YOUR DESIGN RIGHTS

If your registered Community design is due for renewal by September 28, 2019 . . .

. . . renew the registered Community design by March 28, 2019, to ensure that the renewal covers the UK, or else incur additional costs for filing separate renewals in the EU and the UK.

If you are registering a new Community design . . .

. . . no need to obtain both Community and UK design registrations unless you’re filing within a week or two from Exit Day.

If you deferred publication of a Community design . . .

. . . you should request publication of the Community design prior to Exit Day or apply to the UKIPO within nine months after Exit Day for the design to be registered as a UK-registered design.

If you have a registered Community design or an unregistered Community design right . . .

. . . they will remain protected in the UK for the remainder of their term of protection after Exit Day.

If you are marketing unregistered designs internationally. . .

. . . consider obtaining design registrations in the EU and UK, or making simultaneous disclosure of the design (i.e., making it public) in the EU and UK, because disclosure in one territory may no longer be considered disclosure in the other. For example, you may simulcast a UK fashion show to traders or customers in Paris to obtain priority and protection for clothing designs in the EU.

YOUR PATENT RIGHTS

If you have granted European patents, patent applications or legal proceedings in the UK . . .

. . . they will remain in force under the European Patent Convention, which doesn’t require UK’s membership in the EU. The UK’s participation in the unitary patent system and Unified Patent Court are, however, open questions.

YOUR COPYRIGHTS

If you have copyrighted works in the UK . . .

. . . they will continue to be protected under current international treaties.

If your UK entity has database rights to information compiled in computer databases in the EU . . .

. . . the EU will no longer recognize or enforce such rights. Consider where geographically your business obtains, presents and verifies data, and whether licensing contracts are necessary for your UK-based entity’s right to databases made by persons outside the UK.

If you display in the UK digitized works that have no documented owners . . .

. . . you may need to remove such orphan works from your UK-based website or limit access to such content to users located in the UK, in order to avoid breach of the EU copyright laws.

If you transfer between the UK and EU accessible copies of copyrighted works to benefit the visually impaired . . .

. . . consider the need for permission from right holders, or cease such cross-border transfers. Stay tuned for developments on this issue and whether the UK implements the Marrakesh Treaty after Brexit.

DATA PRIVACY AND TRADE SECRETS

If your business operations are in the EU . . .

. . . then both EU GDPR and UK GDPR may be applicable as EU GDPR will be transposed into domestic legislation in the UK on Exit Day.

If your business transfers personal data from Europe to the UK . . .

. . . you must put certain “adequate safeguards” in place (unless or until the European Commission formally confirms the adequacy of the UK’s own data protection laws). Review your data flow and business operations in the UK; for example, if your pan-Europe HR department sits in London and requires access to its European employees’ personal data, the transferor and recipient entities may require agreements with certain model clauses and/or updated privacy policies. Make sure there is sufficient time to navigate your own organizational protocols applicable to this.

If you have outbound transfer of personal data from the UK . . .

. . . you may continue to transfer such data to the EU without any additional requirements. However, review the safeguards and clauses in place for personal data that has been transferred from within Europe to the UK for onward transfer.

If you offer goods or services to, or monitor the behavior of, individuals in the UK, or transfer personal data out of the UK . . .

. . . seek legal counsel for detailed information about this complex topic.

If you have trade secrets or protected information . . .

. . . there is no change in the protection or requirements as trade secrets law is already implemented in UK domestic law.

AGREEMENTS AND CROSS-BORDER SALES

If you have agreements (for license, security interest, settlement or coexistence) or consents dated prior to Exit Day and applicable to EU trademarks . . .

. . . they will apply to the newly created UK trademarks, unless the document or other evidence indicates otherwise. Review these documents, their context, and whether such rights or limitations in the UK were intended (for example, reference to the EU as it is “from time to time” may be interpreted differently from the EU as it is “on the date of” the document). Also, review the venue of dispute resolution in such agreements.

If your business conducts parallel imports of goods from the EU into the UK . . .

. . . such imports can continue unaffected as rights in non-counterfeit goods placed in the EU market by, or with the consent of, the right holder will continue to be considered exhausted in the UK, at least for some period, the length of which has not yet been determined.

If your business exports IP-protected goods from the UK to the EU . . .

. . . then you may need the right holder’s consent for such exports as rights to non-counterfeit goods placed in the UK market by, or with the consent of, the right holder after Exit Day will not be considered exhausted in the EU. Consider whether you need to stockpile such goods in the EU prior to Exit Day so that exports and sales of such goods in the EU post-Exit Day are uninterrupted at least initially upon Brexit.

ENFORCEMENT OF YOUR IP

If you are party to any dispute pending before the UK courts relating to EU rights . . .

. . . consider whether similar proceedings must be instituted in the EU because the remedies, including injunctions, granted by UK courts will extend only to the UK.

If you have a pan-EU injunction . . .

. . . it will continue to apply in the UK in relation to the newly created UK right; however, no one knows whether EU courts will uphold a pan-EU injunction granted by a UK court prior to Exit Day.

If you are party to oppositions or invalidity proceedings before the EUIPO based only on UK rights . . .

. . . it may no longer be possible to rely on UK rights, and the EUIPO proceedings may be terminated as groundless after Exit Day. Consider these pending proceedings and assess whether they need to be brought before the UKIPO when the new UK right is created.

If you have a presence only in the UK but are dealing with any dispute before the EUIPO . . .

. . . consider whether you will need to appoint a new representative with authority to appear before the EUIPO.

Stay tuned for updates as the impact of Brexit on intellectual property evolves.