Brexit update on EU-wide IP rights: Draft Withdrawal Agreement

On March 20th 2018 the UK and the EU Commission published the revised draft Withdrawal Agreement detailing the current status of negotiations concerning the UK’s departure from the EU. Most of the provisions relating to intellectual property rights, including EU Trade Marks (EUTMs) and Registered Community Designs (RCDs), are detailed in Articles 50 to 57 and are coded green, meaning that they have been substantively agreed at negotiators’ level, and will only be subject to technical legal revisions in the coming months.

The transition period: Maintaining the status quo

The draft confirms that following Brexit, the status quo will be preserved during a transition and implementation period which will be in existence until December 31st 2020. During this period EUTMs and registered and unregistered designs will continue to apply in the UK and such rights will continue to be enforced on an EU-wide basis by the UK courts.

Equivalent UK rights post-Brexit

There has been much speculation as to the ultimate fate of existing EU IP rights. The draft Agreement provides welcome certainty that following the expiry of the transition period, holders of all EU rights (including EUTMs, RCDs and Community plant variety rights) that were registered or granted before the end of the transition period will obtain an equivalent right in the UK. The precise details of how this will be implemented remain to be clarified but it has been agreed that re-examination will not be required. Although EU negotiators have proposed that the equivalent UK right be registered at no cost to the rights holder, this is subject to the ongoing negotiations.

The draft provisions state that rights holders will not be required to make an application or undertake any particular administrative procedure (Article 51). Instead, the EUIPO and the Commission shall provide the UK authorities with the information necessary for the corresponding registration or grant in the UK. Following transfer and entry onto the UK registers, the first renewal will be renewal date of the right registered under EU law.

Pending EU applications will also be safeguarded. Article 55 provides a 9 month period following the end of the transition period for applicants to file corresponding UK applications, and in doing so preserve the EU filing date and any claimed priority date. The draft Agreement also states that EU designations made before the end of the transition period under either the Madrid System for the international registration of trade marks or the Hague system for the international registration of designs, will be afforded protection in the UK (Article 52).

The draft Agreement also confirms that any existing rights which were exhausted in both the EU and the UK before the end of the transition period, will remain exhausted in both the EU and UK (Article 57). However, the draft Agreement does not address the exhaustion of new rights created after the transition period: while the EU will continue with regional exhaustion, it is presumed that national exhaustion will apply to new UK rights unless other principles are specifically agreed with the EU.

What’s next?

The provisions are still subject to amendment as negotiations continue. Depending upon progress, it is anticipated that the European Council will announce a finalised Withdrawal Agreement in October 2018.

It is expected that industry organisations, IP associations and representative bodies will now meet with government and the UKIPO to discuss the ongoing negotiations. Furthermore, a number of organisations, including INTA and CITMA, have signed a joint statement to the Commission which sets out their recommendations in light of the draft Agreement and following an earlier meeting with the Commission in June 2017. The signatories urge for all existing EUTM registrations to be automatically entered onto the UK register as UK registrations with the same scope of protection, registration date and, where applicable, priority and seniority.  The same approach is suggested for RCDs. The group also recommends that the UK expands the scope of its unregistered design protection and creates a new UK right that is comparable to the Unregistered Community Design (UCD) right. The group’s joint statement can be viewed here.

Conclusion

Although significant progress has been achieved in outlining the general principles for maintaining EU IP rights that exist prior to withdrawal, further details on implementation are awaited. Brand owners should keep a watchful eye on the ongoing negotiations to ensure that they are adequately prepared for any future procedural requirements. It is also worth remembering that although it seems unlikely that negotiations will break down completely, it may well be prudent for rights holders to continue to plan for all eventualities.

The draft Withdrawal Agreement can be viewed here.