Brexit driving design applications surge: report
E-commerce platform loses TM challenge over Brexit dates
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Non-UK based rights holders should consider appointing a UK address for service before January next year to avoid potential pitfalls, says Lauren Somers of HGF.
From January 1, 2021, an address for service (AFS) in the UK, Gibraltar or Channel Islands has been required to file trademark and design applications at the UK Intellectual Property Office (UKIPO). Prior to this date, an address in the European Economic Area (EEA) was also acceptable for filing such applications, but the end of the Brexit transitional period on December 31, 2020, brought about a change in practice.
For cloned rights that were created from European Union Trade Mark Registrations (EUTMRs), an AFS outside of the UK was not immediately required. At present, under the Withdrawal Agreement, EEA based representatives on the record for clone rights can remain on the UK register and even continue to represent the applicant in contentious proceedings.
However, this is set to change on January 1, 2024, three years from the end of the Brexit transitional period. From this fast-approaching date, the UKIPO will require a UK, Gibraltar or Channel Islands AFS (UK AFS) where new contentious proceedings are initiated. While many non-UK based UK trademark holders or their attorneys have appointed a UK AFS for their UK trademark rights already, there remains a significant number without.
UK designations of International Registrations
Many of these rights are UK designations of International Registrations (IRs). Recent data from analytics firm Clarivate shows that there are over 150,000 UK designations of IRs on the UK register owned by non-UK holders that do not have a UK AFS. Of these there are over 25,000 owned by US registrants, over 20,000 owned by German registrants and over 10,000 each owned by Chinese, French and Swiss registrants.
Even after the 2024 date mentioned above, should such UK designations make it through examination and publication at the UKIPO without issue, there will be no mandatory requirement to have a UK AFS. However, there has been a recent change in UKIPO practice which may encourage the holders of such rights and their attorneys to appoint a UK agent and obtain a UK AFS as soon as possible.
On January 25 this year, the UKIPO issued a Tribunal Practice Notice (TPN) which followed the decision of the Appointed Person in the “Marco Polo” case, Tradeix v New Holland Ventures (BL O/681/22). In this case, the Appointed Person held that sending documents to non-UK addresses may not constitute valid service of those documents.
"Whilst the holder need not appoint a UK AFS before filing its defence, if it does opt to defend the action, a UK AFS will be required."To summarise the details, Australian company New Holland owned a granted UK designation of an IR. Tradeix applied to invalidate the designation and notice of the invalidity action was sent to New Holland in Australia. New Holland’s World Intellectual Property Office (WIPO) representative, an Australian attorney firm, was not notified of the application. Given COVID-19 restrictions in Australia, New Holland did not receive the notice and failed to file a defence within the prescribed two-month period. The UKIPO subsequently cancelled the UK designation by default and notified WIPO. When New Holland’s WIPO representatives were then alerted to the removal of the UK right, it appointed a UK AFS and instructed an appeal of the invalidity action claiming the IR holder didn’t have an opportunity to file its defence.
In the appeal decision, the Appointed Person sided with New Holland and held that the invalidity application hadn’t been properly served on the Australian trademark owner. The UKIPO’s powers only allowed it to contact the non-UK based owner and set a deadline for appointing a UK AFS. It could not serve documents outside jurisdiction, so posting the application for invalidity to the Australian address did not begin the statutory two-month window for filing a defence. Therefore the decision to cancel the UK designation was set aside and the invalidity action was remitted to the UKIPO for further processing.
UKIPO new practice
In reaction to this decision, for approximately five months the UKIPO suspended a number of opposition and cancellation actions that could potentially have been affected until its revision of its practices under the TPN in January. Now, the UKIPO will seek to obtain a UK AFS before any formal serving of documents in invalidation, revocation and rectification actions brought against a UK trademark or design without a UK AFS.
Under the new approach, when a UK right without a UK AFS is challenged, the UKIPO will contact the holder or its non-UK based attorneys via post. Where representative details are available, they will be used in preference to the right holder’s address. The letter will set a one-month deadline to appoint a UK AFS and for the holder to declare its intention (or not) to defend its registration. If a response isn’t received appointing a UK AFS, the UKIPO will issue a further letter, which in this case would be posted and, where possible, emailed to the holder or non-UK AFS on file, advising that the UKIPO intends to treat the application to remove the right as undefended and will declare the right as invalid or revoked. If no response to this second letter is received within 14 days, the right will be declared as cancelled. If this is a UK designation of an IR, WIPO will be notified.
The practice for UK applications without a UK AFS that are opposed, typically UK designations of IRs, will continue in accordance with the Madrid Agreement. When such designations are opposed, the UKIPO will issue a “notice of provisional refusal based on an opposition” to WIPO, who will then transmit the notice to the holder of the IR, via its WIPO representatives if available. WIPO’s transmission to the holder in this situation constitutes effective service of the opposition.
Whilst the holder need not appoint a UK AFS before filing its defence, if it does opt to defend the action, a UK AFS will be required. In a situation where a defence to the opposition is filed within the prescribed two-month period but a UK AFS is not appointed, the UKIPO will issue directions as per the above in cancellation actions, namely it will send a letter via post and email, if available, to the holder or its WIPO agents requiring that a UK AFS be provided within one month. If no such contact is provided during that time, the application will be treated as withdrawn.
Given the reliance on delivery of these letters in some circumstances by post and the short time frames for response, many non-UK right holders and their attorneys have appointed a UK AFS for any UK designations of IRs in their care. Doing so removes the risk that any UKIPO correspondence is missed and the unintentional loss of rights.
Retained EU Law (Revocation and Reform) Bill
Further changes in UKIPO practice could be on the horizon. The Retained EU Law (Revocation and Reform) Bill is currently being considered by the UK House of Lords which aims to make it easier to amend, repeal or replace EU law. Until December 31, 2023 EU law has special status in the UK. “Retained EU Law” was a concept created by the European Union (Withdrawal) Act 2018 which applied all current EU law as of December 31, 2020 to the UK as domestic law. The Bill will remove this special status and reinstate domestic law as the highest form of law in the UK. Any EU precedent case law, if retained, may well have to be codified into UK statute to remain applicable.
In terms of its impact on IP within the UK, the UK’s Chartered Institute of Trade Mark Attorneys (CITMA) has identified 82 pieces of legislation that potentially fall within the scope of the provisions of the Bill. This list includes the core statutes on IP rights in the UK, namely the Trade Marks Act 1994, the Registered Designs Act 1949 and the Copyright, Designs and Patents Act 1988.
Areas of divergence
Whilst much of the law is expected to remain unchanged, there are particular areas where divergence from EU law and practice is anticipated. For example, there has been comment on the need to reform the complex system for protection of designs in the UK. This can be particularly difficult to navigate for design right holders at present.
On Brexit two new types of UK unregistered design rights were created—UK continuing unregistered designs (CUDs) intended to continue protection for unregistered Community designs (UCDs) in the UK for the remainder of the three-year period, and UK supplementary unregistered designs (SUDs) intended to fill the gap left by UCDs for designs disclosed from January 1, 2021. The current UKIPO consultation on designs has however been put on hold while the UKIPO considers the Retained EU Law (Revocation and Reform) Bill.
An area in which the UK has already changed its practice to differ from the EU is its exhaustion regime. The UK’s departure from the EU and EEA means that EU right holders’ rights aren’t exhausted if a product is first sold in the UK. Should that product make its way back to the EU or EEA, the EU holder can object to the re-entry of the goods into the EU/EEA. Its rights are no longer exhausted.
However, the converse doesn’t apply. The UK has adopted a UK + EEA exhaustion regime so if a UK right holder has already benefited from the first sale of its product in the EEA, it cannot then object to the re-entry of the goods into the UK. This is of course subject to there being legitimate reasons for the right holder to object, such as where the condition of the product has been altered or impaired, but there has been discussion around the adoption of a wider international, narrower national or even a mixed exhaustion regime with a different approach taken to different goods. A consultation was undertaken in 2021 on this subject but no decision on a change in regime was reached.
"An area in which the UK has already changed its practice to differ from the EU is its exhaustion regime."
This subject is particularly tricky given the surrounding politics. The Northern Ireland Protocol, even with the newly proposed Windsor Agreement providing “green lane” and “red lane” trade routes between the UK and Northern Ireland and on to the Republic of Ireland, means that the adoption of a national exhaustion regime by the UK seems unlikely. This Protocol guarantees the free movement of goods on the island of Ireland, a position that would be compromised by a national exhaustion regime, a point conceded by the UKIPO in its 2021 consultation report.
Business as usual
Whilst more significant changes to UK IP law and practice may be on the horizon, for the time being trademark holders can expect business as usual. The UK government is keen to convey the message that the UK is “open for business” so any future changes seem likely to be driven by a desire to attract traders to the UK market and to encourage innovation—good news for IP right holders and creators.
Although, the cautionary tale of the Marco Polo case suggests that non-UK holders should seriously consider appointing a UK AFS to ensure their rights are in safe hands during the upcoming period of potential change; if not immediately, certainly from January 1, 2024 when the current practice allowing a non-UK, Channel Islands and Gibraltar based AFS for UK rights will come to an end for the vast majority of dealings with the UKIPO.
Lauren Somers is a trademark director and chartered UK trademark attorney at HGF. She can be contacted at: email@example.com
HGF, Brexit, mail, rights holders, EEA, trademarks, designs, IRs, UKIPO, WIPO, invalidity application, CITMA