Tim Lince

The United Kingdom government officially triggered Article 50 at lunchtime today, beginning the two-year process of negotiations that will lead to the UK leaving the European Union. While uncertainty still reigns, the impact on trademarks and designs could be significant – and with Brexit now a certainty, brand owners should ensure they know exactly what rights could be affected once ‘leaving day’ arrives.

It was 279 days ago when the UK electorate voted in a non-binding referendum to leave the European Union, by a margin of 52% to 48%. The intervening months have seen a fierce war of words erupt between both British and European political figures, all staking out their positions before negotiations officially begin. With the letter triggering article 50 delivered to Brussels today, the UK has reached what Prime Minister Theresa May terms the point of “no turning back”. For the UK population generally, the likely impact still remains unclear, although early signs are beginning to emerge; while the UK economy grew by more than expected in the final three months of 2016, there had been a slowdown in business investment and the value of the GBP(£) has fallen dramatically.

For rights holders, both domestically and internationally, it also remains a time of uncertainty. As we wrote the day after the referendum results were announced (and summarised in an infographic), the protection offered by EU trademark and registered designs remain in place but in theory protection would no longer extend to the UK once it formally leaves the EU. Again, the UK’s enforcement framework currently remains unchanged, and partnerships with Europol on counterfeiting operations continue – for now. To calm the nerves of British rights holders, the UK Intellectual Property Office has hosted a series of meetings on the possible IP impact of Brexit and – positively - the office’s deputy director of the international policy directorate, Adam Williams, recently claimed that IP is “firmly in the mix” of Brexit negotiations.

But despite rights holders being told to ‘keep calm and carry on’, changed strategies are already being witnessed. The UK IPO confirmed that there was a 33% increase in UK trademark filings in August 2016 compared to August 2015, with a rise in the foreign applicant percentage of total applications. Thus it appears that, post-referendum, rights holders are looking to bolster their UK portfolios. On the flipside, the EU IPO released data earlier this month that revealed total EU trademark filings increased by 3.7% in 2016, with the number of UK applicants falling by 7%, representing the first year-on-year decline since 2009. “This change in filing behaviour does not appear to have filtered through to applicants from other EU Member States, with only French and Polish applicants registering slight declines of 0.5% and 1.1% respectively for 2016,” observed Marks & Clerk associates Sonia Hill and Giles Pinnington. “The drop in EU filings by UK applicants may suggest that UK businesses are starting to reconsider their export markets following the Brexit referendum.”

Overall though it appears that brand owners are taking a cautious approach to change.  Kate O’Rourke, president of the UK’s Chartered Institute of Trademark Attorneys (CITMA), states that rights holders should be optimistic that no protection will be lost. “There is likely to be legislation which enables existing EU trademarks to continue to be protected in the UK – CITMA has outlined a number of possible options for how this could be handled and ensure that protection is maintained,” she explained. “The UKIPO has reiterated that no option is off the table, including what we have called ‘UK Plus’, where existing EU rights would extend to the UK.”

While some are changing their filing strategies to guarantee that UK protection is maintained in the long-term, those choosing not to act now should at least assess the scope of current registrations so that, once the picture does become clear, a decision can be made on whether changes are necessary. This analysis should also extend to other IP dealings. “The Article 50 notice brings into sharp focus an analysis of what shape Brexit will take,” states Sally Shorthose, partner at Bird & Bird. “If audits have not yet been carried out, it would be timely to identify what rights are likely to be affected and to see whether IP agreements, such as licences, are fit for purpose moving forward.”

If UK trademark and design protection is crucial for you or your client’s business, getting your ducks in a row should be a priority. The next two years will shape the future of both the UK and Europe for many decades ahead – and for rights holders, the key to a successful transition is ensuring no nasty surprises can happen should EU trademark protection no longer extend to the UK.

The next edition of World Trademark Review will present a detailed exploration of the possible scenarios for trademarks in Europe post-Brexit. 

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