Brexit: seeing red and feeling blue

EU brand owners are feeling blue and seeing red, and that’s before we even talk about Brexit.

Following the General Court’s Red Bull ruling and an opinion in the Louboutin case, it seems increasingly difficult to register non-traditional EU trademarks (EUTMs) such as shapes and colours.

As we wait for further developments in those cases, the UK’s scheduled departure from the EU has caused much confusion and concern.

Despite the fact that the controversial vote to leave occurred nearly two years ago, our understanding of what will happen to EUTMs, ie, whether they will continue to apply automatically in the UK, is only now becoming clearer.

The latest update, announced in the newest draft of the Brexit Withdrawal Agreement on March 19, is that owners of EUTMs and Community designs will have their rights protected in the UK after the Brexit transition period—which is scheduled to start on March 29, 2019, and end on December 31, 2020—without any re-examination.

Currently the unitary right of EUTMs provides protection in every member state of the EU. It has been one of the core successes of the union for commerce, allowing businesses to gain pan-EUTM protection without the time and expense of filing to acquire trademarks in all 28 member states.

Comparable rights

Joel Smith, head of IP in the UK at Herbert Smith Freehills, says the latest draft of the agreement suggests that “there will be an automatic transition for EUTMs granted before the end of the transition period into equivalent additional UK rights” and EUTMs will maintain their existing renewal and priority dates.

He welcomes the news that EUTM owners will be recognised as “having a UK right comparable to the right provided by EU law, post-Brexit”, as the conversion of EUTMs into equivalent UK trademarks will ensure their “continuing and consistent protection” in the UK.

However, any “mechanism for achieving this is still a matter of detailed negotiation and final agreement”, Smith adds. Roland Mallinson, partner in Taylor Wessing’s IP and media group, agrees that these “complexities have yet to be addressed”.

Although confirmation that rights will be protected is a step in the right direction, the mechanisms for orchestrating this protection are not yet in place; whether there will be a cost to businesses and brand owners has not been clarified.

Mallinson says the uncertainty in this area has resulted in brand owners “seeking overlapping protection” with the European Union Intellectual Property Office (EUIPO) and the UK Intellectual Property Office, placing a “burden” on the industry which “it could do without”.

Also, negotiations for other forms of IP, such as geographical indications (GIs) and pending applications for supplementary protection certificates (SPCs) are still ongoing. Birgit Clark, professional support lawyer at Baker McKenzie, says this is particularly concerning as “there are currently no equivalent UK national rights” to those of GIs and SPCs.