The impact of Brexit for EU trade mark injunctions

Since the 31st of January 2020 the United Kingdom is no longer part of the European Union (‘EU’). With respect to trade marks, the departure of the UK has specific legal consequences. 

Article 54(1)(a) of the Withdrawal Agreement stipulates that holders of an EUTM registered or granted prior to the end of the transitional period (31 December 2020), will, by virtue of law, be granted a trade mark in the United Kingdom, consisting of the same sign, for the same goods or services. An ‘older’ EUTM is therefore split in two rights: the EUTM without protection for the UK and a national UK right.

When infringement proceedings have already commenced prior to the end of the transitional period, several complexities may arise, as a recent case before the Dutch District Court of the Hague illustrates. 

Background of the case

Aurora-Soma Products Limited (‘Aurora Soma’’) is a UK company specialized in the distribution of cosmetics used for colour and aromatherapy. Aurora Soma is the proprietor of several EUTM’s, all registered before 2020 for the cosmetic goods it distributes.

In 2019, Aurora Soma terminated a relationship with one of its local Dutch distributors, who subsequently challenged the termination. In response, Aurora Soma summoned the distributor to cease the use of its EUTM’s, as there was no longer a contractual right to do so. With the distributor not adhering to the summons, Aurora Soma initiated proceedings on 24 November 2020, just before the end of the transitional period of 31 December 2020. In its principal claim, Aurora Soma did not refer to future UK rights and neither sought an injunction specifically for the UK territory.

The UK part of an EUTM requires outside the box thinking

The decision by the court

In considering the termination of the legal relationship by Aurora Soma, the court confirmed that it was done with due cause and confirmed the validity of the contractual termination. Given the distributor failed to dispute that it had used the EUTM’s after the termination without approval of Aurora Soma, the court concluded that its marks were being infringed.

With respect to the EU wide injunction to stop further infringement, the court firstly established that Aurora Soma had, during the course of the proceedings and by virtue of law, become the holder of equivalent UK trade marks pursuant to article 54(1)(a) of the Withdrawal Agreement.

The court secondly considered if Aurora Soma could obtain an injunction for both the EU and UK territory, although it only had specifically claimed an injunction for the EU on the basis of its EUTM. In that regard, the court remarked that:

“It follows from Article 67 of the Withdrawal Agreement that the rules on jurisdiction and the recognition and enforcement of judgments applicable to proceedings initiated before the end of the transitional period, such as the present proceedings, remain unchanged. This means that the United Kingdom is considered to be part of the Union as far as the application of said rules is concerned. Thus, the (legal) protection afforded by EU law to claims which arose and were pursued before the end of the transitional period will also be guaranteed for the period after the Brexit. The EUTM’s on which Aura Soma relied at the start of the proceedings and which are still relied on, have, during the proceedings, been divided into EUTM’s (without validity for the United Kingdom) and the corresponding UK trademarks. If, in this situation, the court could not also impose an injunction based on of infringement of the UK trademarks, the protection that Aura Soma initially derived from EU law (the EUTR and Regulation 1215/2012 Brussel I) and further derives from the Withdrawal Agreement would become in part illusory, as far as the UK trade marks that were split off from the EUTM’s due to Brexit are concerned.” [unofficial translation].

Applying the above, the court proceeded to grant the injunction for both the EU and UK, ordering the distributor to cease all infringements within five working days. 

Comment

Although the UK is no longer formally part of the EU, trademark holders can rely on the Withdrawal Agreement to exercise their rights in the UK. The case also illustrates that the complexity of Brexit will surely remain to be visible in the coming years. It will be interesting to see if other courts will also apply the Withdrawal Agreement ex officio as the Dutch court did. One can argue that because the holder of a EUTM is granted an equivalent UK right, it should in the very least also specifically invoke that right in proceedings. On the other hand and especially in proceedings that were initiated well before the end of the transitional period, it cannot be expected that proprietors of EUTMs would or could have known the consequences of Brexit for their trade marks. In such cases, an ex officio application of the Withdrawal Agreement seems justified.

The top picture is in the public domain.