How to Prepare your Brands for Brexit

As you know, Brexit remains a hot topic in Intellectual Property law due to the United Kingdom’s prominence as one of the biggest economies within the European Union and the lack of precedence into this largely unchartered territory. It is evident that existing EU trademark registrations may not protect trademarks in the UK upon exit, and yet the extent to which transitional provisions will be introduced is to be determined. Given these factors, trademark owners are faced with balancing full protection of their trademark rights with reasonable time and budget allocation.

Despite the unknowns, clients of The Sladkus Law Group can be assured we are monitoring the situation closely and will provide timely guidance on the most practical steps necessary to fully protect your trademark portfolios. Our ongoing relationship with several UK and European IP law firms – colleagues who share a vested interest in our clients’ trademark protection – uniquely positions us to gain real-time insight into how Brexit may affect trademark registrations.

Given the facts available today, here is an overview of how Brexit may affect trademark registrations and short-term recommendations on how to best protect your trademarks in the UK:

Potential Impact on IP rights:

As of now, there have been no changes to EU IP laws that would impact UK trademark rights. In fact, no changes will take place until the UK actually leaves the EU.

What will happen to UK rights after the UK leaves? In theory, it is possible that owners of EU trademark registrations could lose all their rights in the UK if it were to leave the EU. However, it is far more likely that some form of transitional provisions would be introduced under UK law to allow the conversion of EU trademark registrations into UK national registrations.

While the full impact remains unclear, most IP attorneys believe legislation will pass that will allow the conversion of EU rights to UK rights. Whether this will be an automatic conversation or a formal reexamination process by the UK trademark office remains to be seen.

Timing:

Article 50 of the Lisbon Treaty must be triggered before negotiations begin, which is projected for Spring of 2017. Until the negotiations process is complete, the UK remains a member of the EU with all the rights and obligations that entails. Ultimately, the Brexit process will take two years or longer, which means the UK could potentially exit the EU by the summer of 2019.

Brexit is currently being challenged in the UK court system, which could delay the process even further. On November 3, 2016, a high court ruled that the Prime Minister must have the approval of parliament to trigger Article 50. This ruling has been appealed to the UK Supreme Court. In mid-November, a Supreme Court judge hearing the appeal said the Brexit referendum may not be “legally binding.”

Recommended Action:

We strongly believe a balanced proactive and practical approach will yield the best results. The Sladkus Law Group is analyzing the situation with our clients’ best interest in mind, protecting both your IP rights and your budget.

In light of the impending changes, we recommend considering a trademark audit, including three specific courses of action to fully protect your brands:

  1. Review the territorial scope of each trademark’s registration and use, and make supplemental national filings where appropriate. In particular, review where trademarks are being used within the EU, as failure to use the mark in the substantial part of the EU could make it vulnerable to attack. Given Brexit, use of an EU trademark only in the UK is unlikely to support an EU trademark against potential invalidation in the future.
  2. Review any trademark coexistence or license agreements to see if any agreements define the :Territory” as the EU. These agreements may need further clarification to include the UK following Brexit.
  3. It is also extremely important to maintain any UK national registrations that may already exist.

In addition, we recommend any new trademarks filed during the transition are filed in both the UK and the EU to provide greater certainty and protection in the UK.

Taking these steps will put your portfolio in a stronger position to weather the change. We will continue monitoring the situation closely and will share updates when appropriate. In the meantime, please contact us with any questions.

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