Florian Traub of Pinsent Masons, the law firm behind Out-Law.com, said businesses face uncertainty over how new EU trade marks or Community registered designs will be recognised if they are registered after 29 March 2019 - the date on which the UK is set to formally exit the EU.
Traub was commenting after negotiators for the UK and EU27 countries reached a draft agreement on the terms of the UK's withdrawal from the EU. The draft agreement was published on Wednesday evening. It outlines transitional arrangements to smooth the UK's exit from the EU, which would apply from the point of Brexit on 29 March 2019 until the end of 2020, unless this period is extended.
Traub said the publication of the draft withdrawal agreement (585-page / 1.44MB PDF) offered welcome clarification on how IP rights would be recognised during a Brexit transition period. However, he said a finalised withdrawal agreement is still in the balance given political uncertainty in the UK, and that businesses should not stop their preparations for a potential 'no deal' scenario.
"The uncertainty around the fate of IP rights following Brexit raises the question what, if anything, IP rights holders should do at this stage to mitigate the impacts," Traub said. "We recommend businesses consider accelerating any pending EU application with the aim of obtaining an EU trade mark or Community design registration before Brexit. We also recommend businesses accelerate any plans they have to oppose, invalidate or revoke EU-wide IP rights, or, depending on perspective, deploy delaying tactics."
Traub also said that prospective new rights holders should "duplicate" any applications they make for new EU trade marks or Community registered designs with applications for UK trade marks or registered designs.
"Whilst we currently do not recommend filing additional applications for already registered EU trade marks or Community designs in the UK, we generally recommend considering dual-filings for new applications until a clearer picture emerges," Traub said.
He also urged businesses to review infringement actions that are pending or contemplated, particularly if they are seeking pan-EU relief.
Under the draft withdrawal agreement, EU trade marks, registered Community designs or Community plant variety rights obtained before the end of the Brexit transition period will continue to apply in both the EU27 countries and the UK, as is the position currently.
However, at the end of the Brexit transition period, those pan-EU rights would cease to apply in the UK. The draft withdrawal agreement makes provision for the conversion of the pan-EU rights into UK national rights, as far as the UK part of those existing rights are concerned, "so that right holders do not have any loss of rights or gap in protection in the UK", the UK government said in an 'explainer' paper it has published alongside the draft agreement.
"UK trade marks, registered design and plant variety rights will be registered automatically, and for free, and this re-registration will not place any administrative burden on right holders," the government said. "To allow this, the EU will share data concerning existing EU-administered unitary rights. In addition, all existing unregistered Community design rights will continue to be enforceable in the UK as separate UK rights offering the same level of protection as the EU unregistered right."
According to the draft withdrawal agreement, businesses that have their EU IP rights revoked through court or administrative proceedings that were ongoing during the Brexit transition period will also see "the corresponding right" in the UK revoked too unless the grounds for revocation "do not apply" in the UK.
Under the draft deal, applications for pan-EU IP rights that are still pending when the Brexit transition period ends will not automatically have the UK portion of those rights converted into a corresponding UK right. Businesses will still be free to apply to register an identical UK right, however.
The draft withdrawal agreement also confirmed that businesses will continue to "enjoy protection" in the UK for EU trade marks or registered Community designs they have registered through the Madrid system for the international registration of trade marks, or the Hague system for the international deposit of industrial designs, respectively.
Holders of existing EU database rights could see the scope of their protections diminish during the Brexit transition period, according to the draft withdrawal agreement.
To benefit from continued protection of databases in the UK, pan-EU database rights holders would need to be either UK nationals, individuals residing in the UK, or a business with undertakings established in the UK, "provided that where such an undertaking has only its registered office in the United Kingdom, its operations are genuinely linked on an ongoing basis with the economy of the United Kingdom or of a member state".
The draft withdrawal agreement does, however, provide for mutual recognition of existing EU and UK geographical indications designated during the Brexit transition period until such time as a future EU-UK trade agreement is reached.
Pharmaceutical companies will also be able to ensure their supplementary protection certificates continue to apply in the UK beyond the end of the Brexit transition period if they make a UK application for the extension of their rights prior to the end of that transition period.
The withdrawal agreement also confirms that the UK will be considered a member of the new Unified Patent Court regime during the Brexit transition period.