Brexit (sorry!) and implications for trade mark records management

Perhaps you're a BoB (Bored of Brexit)? That's understandable as it seems to become more exasperating by the day.

Nonetheless, it will have implications on how trade mark records and data are managed. This might be pretty dull too, but it is important.

How data is managed in IP databases and on Trade Mark Registers is critical to trade mark management whether it is to ensure the proper management and advice of your business/your client's trade marks, or by having reliable information on the rights of third parties.

If Brexit does not ultimately happen - a result that may see IP professionals discovering a skill for cartwheeling - then the status quo will be maintained.

If Brexit does happen, in whatever form (hard/soft/no deal), the UK has indicated that it will continue to recognise EU rights by 'cloning' them into an equivalent UK right.

I previously speculated that this would be automatic. At the time, many thought they'd instead need to be a formal conversion procedure. Let me not be smug (and, alas, I don't know this week's lottery numbers) as I may not be right - the UKIPO's guidance states equivalent UK rights will be created with "minimal administrative burden", but it is anticipated it will be done proactively by the UKIPO.

The UKIPO's guidance states that "any business, organisation or individual that may not want to receive a new comparable UK registered trade mark or design will be able to opt out". However, to me, it seems that it will be easier (and cheaper) to allow a new right to be created so how many will go to the effort of opting out?

"this is a worldwide issue, not specific to UK businesses and attorneys"

So on Brexit day, all existing EU registrations will be cloned into a UK registration with the same details. Check how many EU registrations you have on your records... take a deep breath and realise all (or nearly all presuming many will not opt out) of these will need duplicating into a UK record - and this is a worldwide issue, not specific to UK businesses and attorneys, as it relates to anyone owning EU trade marks.

I expect many databases will have a tool (or develop a tool) to allow this to be done automatically. Nonetheless, it may represent a big increase in the number of records a business is managing. Some businesses pay per record on their IP database so the impact on their overheads is immediate.

It should be mentioned that cloned EU rights are likely to have a letter prefix to their numbers and this may require a more manual update. This currently happens when searching the UK Register whereby UK national rights are prefixed 'UK' and EU rights are prefixed 'EU', and there are different prefixes for those that are designations in International Registrations.

High lapse rate?

Of all the EU marks on the Register, how many of the owners have commercial interests in the UK? Certainly not all and so I think it's fair to anticipate a high lapse rate at renewal time. This could be the first time private practice firms have the opportunity to charge fees on these records. Some private practice firms struggle to make money on the renewals part of their business - the work involved in regular chasing clients for instructions that end up being a "not interested" is typically not money making. A high(er) lapse rate would only make this worse.

Then there are the UK clients that would often file in the UK first and then the EU (and other countries) come later as their plans to penetrate other markets firm up. These clients are going to end up with two UK registrations with a reasonable likelihood that the first (older) one will be maintained and they won't need to renew the second (cloned) one when it comes due for renewal. Nonetheless, there would still be an obligation for a private practice firm (and in-house department) to keep records of the second cloned one.

There's also International Registrations designating the EU. Here the UKIPO will support this to be cloned into an equivalent UK national right. They may alter this stance if WIPO will allow International Registrations designating the EU to have "continuation of effects" to the UK with "minimal administrative burden" (e.g. no fees).

Let's say WIPO will allow continuation of effects but will require payment of a fee. Now a UK business who has an IR designating the EU (with base mark from the UK) could now request a continuation of effects of the EU designation to the UK. This would mean they have triplicate protection in the UK (1 - the original UK national registration, 2 - a cloned national from the EU designation and 3 - a fresh (continuation of effects) designation of the UK in the International Registration). I hope you are following me, but this is not completely far fetched as it would allow a business to let the two national UK registrations lapse, maintaining their rights in the UK and EU (and any other countries designated in the IR) exclusively through the International Registration.

Those involved in data management should be prepared, and this has only explored registered EU marks, not those pending on Brexit day.

Duplicate protection is not always bad. I worked on a portfolio audit once that had old East and West German registrations. Upon German reunification both registrations extended to the whole of Germany. My audit discovered the old West German registration had inadvertently lapsed - the duplicate (East) German registration came to the rescue to ensure protection across Germany. Every cloud...

Brexit and trademarks

The United Kingdom has decided in yesterday's referendum that it will leave the European Union.

Personally, I'm gutted. Having lived and worked on the continent, I regard myself as a Europhile. It may be a great shame that our younger people may not have so many opportunities to live and work in Europe.

There will be an impact on trademarks. What exactly needs to be determined? For now we do not need to worry.

The Prime Minister has indicated that he will stand down and it is his replacement who will submit the Article 50 request to the European Union that begins the formal withdrawal process. Indications are that this will take place in October and the withdrawal process will have a two-year negotiating period once submitted.

I think there's a chance of another General Election in the intervening period. This means we could be looking at between two-two and a half years before EU trademarks will no longer cover the UK.

Furthermore, I understand this negotiating period is extendable if agreed by both parties - a "cooling-off" period in trademark terms, I suppose.

Automatic re-registration?

What will happen to EU trademark (and design) registrations once the UK does leave the EU?

My hunch is that they will automatically continue to cover the UK. My reasons are:

1. There are so many of them that having a formal revalidation process would be a burden on UK IPO resources.
2. EU trademarks are searchable on the UK IPO's systems so it should be a fairly straightforward task to convert/duplicate them to become UK national registrations.
3. As for EU designations in International registrations, it should be possible, working with WIPO, to organise automatic 'Continuation of Effects' to the UK.
4. They would not want to discriminate UK businesses by making them pay to revalidate EU trademarks which they legitimately obtained thinking they had the UK covered.
5. It's certainly arguable that the UK IPO could lose out on a windfall that could be generated by a formal revalidation process, but I would argue that this would be a temporary spike (and the Office would need temporary staff for this) whereas they can bring in extra fees in a more managed way as registrations fall due for renewal and get assigned.

Reverse seniority?

I wonder if there is a need to allow seniority claims to be reversed so where an EU registration has claimed seniority from a UK registration then this UK registration can be reinstated (presuming it has since lapsed).

This may be beneficial in the case of very old prior rights where the corresponding EU registration does not date back as far. This could carry official fees for the UKIPO as I believe they would require examination. Whether such requests can restore the specification of the original UK registration or can only comprise that which is included in the EU registration (where they are different) would be a question to be answered in this eventuality.

From a practical point of view, an automatic revalidation process would negate the need to request "reverse seniority" in the vast majority of cases.

EEA and representatives

We wait to see if the UK's withdrawal from the EU will also be a withdrawal from the European Economic Area. If it remains in the EEA then the impacts on the management of trademarks will be less.

If it decides to leave the EEA then things may change more. Currently, only an Address for Service in the EEA is required for trademark matters before the UK IPO. Leave the EEA and the rules may change so that an Address for Service is in the UK only. In practice this would not be a big deal as the vast majority of Addresses for Service for UK national registrations are in the UK already, as opposed to other EEA countries. (Disclaimer: this is based on my regular scouring of the Trade Marks Journal and Register, and not on a detailed analysis of Addresses for Service.)

However, this could scupper any plans to automatically duplicate the EU Register to the UK as a large number of EU trademarks have IP representatives in other EEA countries. Perhaps these could be left be, with a UK Address for Service only needing to be appointed when there's subsequent dealings with the UK IPO.

UK Professional Representatives

Leave the EEA and the ability of UK Professional Representatives to act before the EUIPO (and other EU Offices) could be impacted. The Institute of Trade Mark Attorneys has indicated that they will "be calling on the UK Government to ensure that UK practitioners remain entitled to represent clients before the European Union Intellectual Property Office."

If UK Professional Representatives can no longer act before the EUIPO then this lucrative strand of work will go elsewhere, firms in Germany, Ireland and the big IP units near Alicante likely destinations in my view.

If they can continue representing though then they will be well placed to continue the UK's strong level of representation before the EUIPO. Such work could also be supplemented by corresponding UK filings too.

However, we may see a change in filing strategy. If the UK is an added country to consider in filing programmes then the attractiveness of an International trademark may increase. The rationale being the more countries to be covered, the more attractive it is to use.

Scotland

In Scotland the people were in favour of remaining in the European Union. This may now lead to another Scottish referendum and further implications to trademarks. I've blogged previously on what could happen in this event.

Gibraltar and Northern Ireland

Gibraltar (overwhelmingly) and Northern Ireland (much more narrowly) also voted to remain in the European Union - the out votes of England, in particular, and Wales tipping the balance towards leave.

Politically I cannot see Northern Ireland looking to go it alone or look to instead form a part of a united Ireland and so will find itself alongside England and Wales (with or without Scotland).

Gibraltar is unlikely to make a bid for independence or accept co-hegemony from Spain (as the Spanish Government was keen to offer early on). Its local trademark system currently allows for the re-registration of UK or EU trademarks, but they may close the door on EU trademarks (which have more doubtful enforceability anyway).

Jersey

The Channel Island of Jersey lies outside of the European Union and its citizens were not entitled to vote in the referendum.

However, their trademark legislation allows for the automatic protection of EU trademarks to the island (i.e. without the need to re-register them locally). Conversely, UK national registrations must go through a formal re-registration process and get a local registration.

They would need to change their local law to stop EU trademarks providing protection to Jersey. I understand discussions in recent years saw them happy with the status quo but the UK's withdrawal from the EU may make them revisit this issue and we could perhaps anticipate an entirely revamped trademark law in Jersey (neighbouring Guernsey has taken its own route and runs a very efficient Registry).

Conclusion

Nothing changes overnight. There is no need to take action just yet. I think by "pro-actively" filing in the UK now then you may end up with duplicate UK registrations in the future. Keep your ears and eyes open as things become clearer.