EC draft withdrawal agreement: IP rights

by Dechert LLP
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The European Commission has produced a draft withdrawal agreement (the “Agreement”) chartering the path of the UK’s withdrawal from the EU. In the coming weeks, the Council of the European Union and the Brexit Steering Group of the European Parliament will discuss the contents of the Agreement. The ultimate goal of this intra-EU consultation process is to present to the UK authorities a final base plan for the UK’s withdrawal that would potentially be the subject of further negotiations.

Title IV (Articles 50 to 57) of the Agreement details the effect that Brexit will have on intellectual property matters in both the EU and the UK. The transition period will start when the Agreement enters into force and end on 31 December 2020.

Registered Rights

The main challenge faced by the holders of intellectual property rights in the EU is whether the protections they offer will continue to extend to the UK. The Agreement addresses this issue in Article 50. EU trade marks, Community registered designs and Community plant variety rights that were registered or granted before the beginning of the transition period will be converted to their equivalents in the UK (Article 50(1)).

The Agreement proposes a relatively streamlined and cost-efficient procedure for the transfer of IP rights that effectively requires no input from the owners. The right owners do not have to submit an application and all the information needed for the registration will be provided to the UK authorities by a number of EU bodies (Article 51(2) and (3)). While the Agreement does not clarify if the process will be administered by the UK IPO or some other body, it specifies that the relevant entities in the UK will register the transfer of rights free of charge (Article 51(1)). Importantly, the first renewal date of any trade mark or registered design that was transferred to the UK will be the next renewal date under the corresponding EU law (Article 50(4)).

While the focus of the Agreement is on EU registrations, international agreements are also discussed. Any owners that have designated the European Union for their trade marks and designs registered under the Madrid system, and their industrial designs registered under the Hague system, will continue to enjoy protections in the United Kingdom in respect of those international registrations (Article 52).

Unregistered Rights

The provisions of the Agreement are not limited to officially registered EU intellectual property rights. Holders of rights in unregistered Community designs that arose before the end of the transition period will become the owners of corresponding rights in the UK, with the protections being equal to those offered by the corresponding unregistered Community design (Article 53).

Database rights are also protected by the Agreement. The holder of a UK database right which arose under the European Union Database Directive before the end of the transition period will hold a similar right under UK law (Article 54). This provision ensures that the UK can not change the provisions of the Copyright, Design and Patents Act 1988 that deal with database rights, until all existing database rights have expired.

Applications

European Union trade mark applications that have been filed before the end of the transition period and that are still pending at its end, will have an ad hoc right of priority in the UK (Article 55(1)). That right will last for six months from the end of the transition period and will be instrumental for establishing the precedence of rights over the trade marks in question.

Applications for supplementary protection certificates for plant protection products or medicinal products are also covered by the Agreement. Applications for such certificates that were pending at the end of the transition period will continue to be governed by the relevant EU laws (Article 56(1)).

Genuine Use and Priority Periods

Any EU trade mark that has not been put into genuine use in any five-year period is liable to revocation. Article 50(5)(b) of the Agreement states that an EU trade mark that was converted to a UK trade mark will not be liable to revocation on the ground that it had not been put into genuine use in the UK. Genuine use in any other Member state will be sufficient to protect such a UK trade mark from revocation until the end of the transition period. As a result, the owners of converted UK trade marks must be able to prove genuine use in the UK by the end of 2020 in order to avoid the risk of revocation. Interestingly, the Agreement does not discuss whether the genuine use of an EUTM in the UK would be sufficient to prevent its revocation during the transition period. It might be assumed that such genuine use in the UK within the transition period would protect an EUTM from revocation, but this is subject to confirmation by the EU and UK authorities.

Priority periods allow applicants that have filed an application for a trade mark or registered design to file subsequent applications effective as of the date of filing the initial application. This right is valid only within 6 months of filing the initial application. The Agreement preserves the priority periods by stating that any converted UK trade mark and registered design will enjoy the date of filing or the date of priority of the corresponding EU trade mark and registered design (Article 50(5) and (6)).

Conclusion

The proposal by the European Commission for the withdrawal of the UK from the EU provides clarity on a number of issues related to the enforceability of European Union trade marks in the UK. However, all EUTM owners need to keep a watchful eye on the intra-EU consultations and subsequent withdrawal negotiations in order to stay informed of any key changes.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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