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."