Enforcing unregistered rights post-Brexit
Much has been written about the potential effect of Brexit on UK trademark law, and the focus has so far been on ensuring the continuity of EU trademark rights in the UK. However, this is only the tip of the iceberg, and there are a number of other additional ramifications. In particular, Brexit may have an unexpected impact on the ability of famous brands to enforce unregistered rights in the UK.
When filing a UK trademark application, applicants are required to declare a bona fide intention to use the mark in the UK. Applications for EU trademarks do not require this, although EU filings can be considered dishonest if it becomes apparent that the owner's sole objective was to prevent a third party from entering the market.
The absence of the intention to use declaration in connection with EU filings means brand owners have been able to use defensive filing strategies, ie, by re-filing variations of EU trademarks at intervals to limit the risk to challenge on grounds of non-use. While the UK has been part of the EU, this provided a defensive filing strategy effective in the UK, even when the owner did not actually intend to use the mark in the UK. Brexit may close this particular route to protection in the UK, which will likely have a particular impact on famous marks which are not used in the UK.
Following Brexit, the only way for brand owners to obtain registered trademark protection in the UK will be to file a UK trademark application—either on a national basis, or as a designation under an international registration—so brand owners will have to consider carefully whether they can actually declare a legitimate intention to use their marks in the UK. In some circumstances, brand owners may be prevented from filing a UK mark, or be open to challenge if they file their marks in the UK because of the use requirement. To bridge this gap, brand owners may therefore increasingly decide to base their trademark enforcement strategies in the UK on unregistered rights.
Famous names
Imagine a situation where you have a brand owner who owns an unregistered famous mark which is not actively used by the brand owner in the UK. This scenario could, for example, arise with internationally renowned celebrities. While their famous names may be widely recognised in the UK and internationally, their names may not necessarily be used in a trademark sense in the UK.
Or you may have a famous historic brand, no longer actively marketed in the UK, but which has a significant reputation. As a result, they could be prevented from registering their names as UK trademarks, or those marks could be subject to challenge on the grounds of non-use.
Brand owners with unregistered trademark rights in the UK can file UK oppositions based on the following grounds: (1) passing off; (2) reputation of an unregistered mark; (3) article 6bis of the Paris Convention, which affords additional protection to well-known unregistered marks; and (4) bad faith.
However, how would that brand owner prevent use of a third party mark based on an unregistered mark? There would, in theory, be only two options available when it comes to preventing use: (1) the brand owner could register its mark in the UK and take action based on its registered mark; or (2) it could file a passing off action in the UK courts. Nevertheless, there could be scenarios where these avenues are both blocked: the first by Brexit, and the second by UK case law concerning the goodwill requirement under passing off.
Attorneys generally recommend that brand owners register their trademarks if they are considering enforcing them. This is because registration opens up a wider variety of options, and infringement is almost always easier prove than passing off. However, as discussed above, obtaining a trademark registration that is effective in the UK may no longer be a viable option in every circumstance. If it is not, the only avenue to prevent use in the UK for those who cannot register their marks in the UK will be a passing off action in the UK courts.
Section 56 of the UK Trade Marks Act 1994, which implements article 6bis, provides that if an entity is able to show that its mark is “well-known” in the UK, it is protected in the UK irrespective of whether the proprietor carries on business or has goodwill under the mark in the UK.
Passing off
Recent UK case law shows, however, that in order to succeed in a passing off action, showing evidence of some business in the UK is essential when it comes to proving goodwill (Starbucks (HK) v British Sky Broadcasting Group, 2015). The jurisprudence provides that it does not matter how many people know of the unregistered mark: if there is no business in the UK, one simply cannot hope to succeed in a passing off action as goodwill is not proved.
If the Starbucks (HK) case had removed the requirement for actual use in the UK, then passing off would provide the appropriate protection for well-known marks under the Paris Convention. However, as the Starbucks (HK) case makes clear, there must be UK consumers (and other commentators believe this is apparently contrary to the position in most other common law jurisdictions), so it is arguable that the UK does not fully comply with its obligations under article 6bis of the Paris Convention to protect well-known marks: there is a clear distinction between what can form a basis of an opposition (ie, a well-known mark under article 6bis of the Paris Convention) and what can form the basis of an action to object to third-party use.
