Brexit and your EU trade marks – time for an IP audit

The UK government triggered Article 50 on 29 March 2017. However, there is still little clarity on the repercussions of Brexit for European Union trade marks (EUTMs), including the issue of non-use. 

One practical issue that is likely to arise is the unexpected risk of possible revocation claims. EUTMs are vulnerable to revocation if they are not used to a sufficient extent within a 5 year period from registration. 

Extent of use 

Until recently, the position had been widely understood to be that use in one Member State was enough, so long as it satisfied the criteria for genuine use. However, a 2015 decision in the UK Intellectual Property Enterprise Court1 cast doubt on this, the Court holding that in general, use in more than one Member State was required. However, this has not been the approach taken by the EU IPO, or indeed the UK IPO or English High Court2, which have preferred the multifactorial analysis approach taken in the 2012 CJEU decision of Leno3 where the CJEU stated that “territorial borders of the Member States should be disregarded in the assessment of whether a trade mark has been put to ‘genuine use in the Community’…taking account of all the relevant facts and circumstances, including the characteristics of the market concerned, the nature of the goods or services protected by the trade mark and the territorial extent and the scale of the use as well as its frequency and regularity”. Taking this approach means that use of a trade mark in one Member State can be sufficient for genuine use if the particular facts and circumstances show the use is genuine. 

Given the recent decisions of the English High Court and the UK IPO, it seems that the multifactorial approach taken in the Leno decision represents the position on genuine use. 

Post-Brexit use

The issue post-Brexit is whether use in the UK will count at all. At the moment, a brand owner may only be making genuine use of their EUTM in the UK which is likely to be sufficient to maintain their trade mark (depending on the circumstances of the use). However, once the UK leaves the EU, it is not known whether or not use in the UK would be taken into account. If a very strict approach is taken and UK use is not taken into account at all, the EUTM owner would not be able to demonstrate genuine use and the trade mark would be liable to revocation. It is anticipated that use in the UK during the period in which the UK was a member of the EU would count but use after the date of Brexit would not. This gives a 5 year window from the date of Brexit for use of the trade mark to be made elsewhere in the EU. 

Similarly, an EUTM holder can currently maintain protection covering the UK even if it is only using the trade mark in, say, Portugal and Spain. Post-Brexit this may not be the case as any continued rights in the UK (assuming EU rights are somehow converted or maintained in the UK as is expected) may be vulnerable to revocation if there is no use in the UK. 

This could pose a problem sooner rather than later depending on if and how EUTMs are converted into UK rights. Several methods of conversion have been suggested including:

1. EUTMs simply being declared as valid and continuing in the UK; 
2. Existing EUTM registrations being automatically entered onto the UK trade mark register (with the same registration date and, where applicable, priority and seniority); 
3. Existing EUTM registrations being entered onto the UK trade mark register (with the same registration date and, where applicable, priority and seniority) by way of a simple application by the owner. 
4. Existing EUTM holders having the option to create a corresponding UK trade mark for a certain period; 
5. Conversion of an EUTM into a national UK trade mark involving re-examination by the UK IPO. This would differ from the existing conversion mechanism in that the EUTM registration would continue to exist. 

Although it is widely expected that some method of conversion will be negotiated, it is possible that EUTM holders may have to make fresh UKTM applications. If so, EUTM holders will have to make a declaration either that the mark is in use in the UK or that the applicant has a bona fide intention to use the mark applied for in the UK, which is not the case for an EUTM application. Applications for conversion are treated by the UK IPO as a new application, so even conversion applicants are required to make this declaration. For EUTMs which have never been put to use in the UK, this could be problematic, particularly if the grace period of 5 years to commence use has expired. 

Points to note 

Non-use periods in both the EU and UK are 5 years but businesses need to already be considering the possibility of making new filings to maintain registered protection in what is likely to be two jurisdictions and two markets rather than one. Conducting an IP audit to establish where the business’ registered rights are and the scope of their usage would be helpful.