The United Kingdom formally left the European Union on January 31, 2020. Since that time, the country’s legal system has been in an eleven-month ‘transition’ state that has delayed the effects of the country’s departure. However, that transition period came to a close on December 31, 2020 and the New Year will now force both the public and any businesses operating in either the European Union or the United Kingdom to reckon with the full brunt of ‘Brexit.’
The U.K., the E.U., and the International Trademark Register
One of the many legal challenges presented by ‘Brexit’ has to do with a peculiarity in the trademark registration system of the UK vis-à-vis the European Union and the International Register. The International Register is a global trademark protection system created pursuant to the Paris Convention for the Protection of Industrial Property of 1883 (the “Paris Convention”)—a multilateral treaty that permits its signatories to efficiently and cost-effectively apply for, register, and manage their trademarks in multiple jurisdictions across the globe using a single, centralized system. One of the primary benefits of that system is that it allows trademark owners to pursue a single ‘international’ trademark application that, if approved, would provide the applicant with trademark rights in any of the Paris Convention’s member countries designated in the application.
Both the European Union and the United Kingdom are signatories to the Paris Convention, but because an EU-level trademark registration protects the use of a mark in all European Union member states, international applicants will often choose to designate the European Union as a whole, instead of the United Kingdom or any other individual EU member state, in their international applications.
The same is true with respect to trademark owners who have not elected to pursue international trademark registrations, but still wish to do business throughout Europe. Often, they will seek trademark protection with the European Union’s Intellectual Property Office instead of pursuing multiple duplicative applications in each EU member state. These otherwise prudent and cost-effective trademark protection strategies, however, are now being challenged by ‘Brexit,’ as owners of international or EU-level marks are now left to question whether their rights will be protected in the newly-independent UK.
The Effect of the U.K.’s Withdrawal Agreement
The answer to many of their concerns is included in a Withdrawal Agreement that was reached between the EU and the UK on February 1, 2020. The Agreement provides that, for any EU-level trademark registration or international registration designating the EU, the UK will create a duplicate or ‘cloned’ registration in the UK’s national registry, affording registrants with the same trademark rights they would have had in the UK, pre-‘Brexit.’ But this ‘cloning’ process will not come without certain costs to the trademark owner. The newly-created UK registration cannot be managed or maintained through the EU Intellectual Property Office, or the international trademark registry. Indeed, UK trademark attorneys are not even permitted, post-‘Brexit,’ to serve as representatives at the European Union Intellectual Property Office. Instead, ‘cloned’ registration must be managed directly through the United Kingdom’s national office and will require the retention and appointment of a UK-approved trademark attorney or representative.
A ‘cloned’ entry will also not be provided in the UK registry for any international or EU-level applications that were ‘pending’ as of December 31, 2020. As such, should the owner of a pending international application designating the EU hope to receive trademark protection in the UK, they will need to appoint a UK-approved trademark attorney or representative to prepare and file a parallel application with the UK Intellectual Property Office before September 30, 2021, or they will be unable to assert the ‘priority date’—the date that their trademark rights are deemed to begin—provided for in their existing EU or international application.
An open question is what effect the UK’s exit from the European Union will have on applications or registrations that are subject to a challenge by third parties. EU trademark applications and registrations may be challenged by any third party if: (1) that third party has made relevant use of a similar trademark in the EU prior to the date of a potentially infringing trademark’s application or registration; and/or (2) the registrant has failed to make use of its mark in the EU for a period of five years. The UK’s Withdrawal Agreement provides that even EU trademark registrations that are subject to a third-party challenge will be ‘cloned’ in the UK trademark registry and that UK applications duplicating pending EU applications that have been challenged may be filed before September 30, 2021. But the Agreement is silent with respect to the duplication of pending opposition or cancellation proceedings, suggesting that duplicate challenges will need to be filed by third-parties against the UK ‘clones.’
The UK has indicated that should a ‘cloned’ EU trademark registration be successfully challenged by a third party and removed from the EU registry, the UK ‘clone’ will also be removed. But it is unclear whether that is true or legally permissible if the challenge to the EU trademark is based upon the use or non-use of a trademark only in EU member states, but not the UK, or when multiple grounds for the challenge have been alleged. Prior to ‘Brexit,’ such a challenge would result in the cancellation of an EU-registered trademark but not a UK registration. As such, the effect of a similar challenge to a UK ‘clone’ is not at all clear and the UK Intellectual Property Office has left the majority of these disputes to be resolved according to its own discretion, noting that: “[i]f a third party sends . . . a cancellation notice [regarding an EU registration]. . . [t]he IPO Tribunal will then decide whether or not the trade mark should be cancelled in the UK.”
Given the ongoing value of trademark rights to modern businesses and the fact that the UK serves as an important trade hub for a number of international businesses operating in the EU, the UK should issue clear guidance regarding the grounds upon which a third-party challenge to a trademark application or registration will be accepted in the UK. Otherwise, businesses will be forced to inefficiently adjust their practices based upon the case-by-case rulings of the UK Intellectual Property Office, generating unnecessary instability for trademark owners in an already tumultuous time.