What would a ‘Brexit’ look like for the UK trade mark attorney profession?
Since the introduction of the EU Trade Marks Directive and the Community Trade Mark Regulation, the UK trade mark attorney profession has been closely involved with the development of the wider European trade mark system and its law.
Here we discuss the potential impact for trade marks and designs, and the UK trade mark attorney profession of the UK exiting the EU.
It is widely regarded that the EU trade mark system provides value for money and a territorial breadth of rights that has been of benefit to businesses and to the profession. The UK profession has embraced the system and its representatives are the second-largest source of filings with the European Union trade mark office.
The exact picture and transitional arrangements would emerge over time following lengthy negotiations – meaning that we cannot be certain of any outcome. However, given our knowledge and experience, we can be fairly sure that leaving the EU would have the following effects on trade mark law and practice:
- The UK would no longer be covered by the EU trade mark and EU design systems
- The UK court system would no longer have EU trade mark Courts
- Brand owners seeking to protect new trade marks in the UK would need to obtain a UK-specific trade mark registration (either a national registration, or via the Madrid Protocol)
- There would be transitional provisions of some kind, probably allowing the ‘re-registration’ of EU Trade Mark and EU Design registrations in the UK
- UK-based trade mark practitioners would be unlikely to file EU Trade Marks/EU designs because they would be unable to represent clients before the EU Intellectual Property Office, unless the UK was to join the European Economic Area.
- Over time UK trade mark and design law would diverge from EU law
What happens to trade mark attorneys’ work if the UK leaves the EU?
A substantial proportion of the work of the UK trade mark attorney profession can be accounted for in the filings and related prosecution and contentious matters for EU trade marks.
It is reasonable to suggest that a big percentage of the EU Trade Mark and Registered Community Design work currently undertaken by the UK profession, including a large volume instructed from overseas, would move to attorneys within the rest of the EU. For those involved in litigation, the lack of an EU trade mark court in the UK may also lead to a reduction in work.
In Switzerland, which is not part of the EU or European Economic Area (EEA), many firms have arrangements with EU based firms to handle EU trade mark work as they are not authorised representatives.
What if the UK joins the European Economic Area (EEA)?
Although unclear, there is a possibility of the UK joining the EEA if it were to leave the EU – and while the new European trade mark directive gives provisions for EEA members to file, and it may well be the case that in the EEA UK attorneys could represent before the EU IPO, there is a risk that foreign agents would be likely to send work to representatives of full EU member states rather than EEA members. However the UK profession has built up a reputation for quality and trust, which would be unlikely to diminish upon leaving as this has been built up over a substantial period of time.
Would UK filings increase?
Many global businesses that have a market in the UK would still require protection in the UK – so many IP owners would continue to file independently in the UK. There would almost certainly be an increase in UK based trade mark and design registrations, but there is a question over whether an uplift in UK filings would make up for a potential loss in EU related work. There is a possibility that many applications would proceed via the Madrid Protocol arrangements – and possibly filed on the back of EU Trade Mark filings by EU representatives, which would result in less work being available for UK- based attorneys.
It is likely for there to be a substantial transition period during which clients file both UK and EU trade marks to guarantee protection. We also anticipate there would be a robust process through which EU trade marks would become UK trade marks, or a conversion process which would require attorney involvement. Both would result in a short-term uplift in work for UK-based attorneys.
There are huge numbers of rights that would need to be registered in the UK, and it is possible that the transitional provisions put in place in the event of ‘Brexit’ would result in a short-term increase in work for UK attorneys, relating to the ‘re-registration’ of EU Trade Marks and Designs in the UK. However, if the process is purely formalistic, a significant proportion of this work may go to dedicated renewal/recordal firms rather than attorneys.
The likelihood is that there would be some method for an EU Trade Mark or Registered Community Design to continue as a UK right. Conversion for EUTMs would be one option, but the existing model requires re-examination as a national application and leads to a fresh non-use grace period. The former might place significant strains on UK’s IPO, and the UK profession, if volumes are high. This has the potential to lead to short-term ‘cluttering’ as otherwise vulnerable rights get a fresh lease of life.
Impact on UK based business
For trade mark and designs rights owners there would inevitably be an increased cost and complexity in protection and enforcement - the EU currently provides a cost effective and simple system.
Existing owners of EU Trade Marks and EU Designs would lose protection in the UK, unless they obtain a separate UK registration. It is likely that there would be costs involved in any re-registration process and there would almost certainly be additional costs at renewal. There would also be an uncertainty over what will happen to seniority claims and whether registrations based on a European Union Trade Mark but based in a UK establishment would retain seniority.
The UK Courts would no longer be available as a venue for resolving EU Trade Mark disputes and the divergence of UK and EU trade mark and design law would result in additional complexity and resultant cost.
Changes in law and practice
We can expect a significant period of uncertainty for trade mark law and practice after a vote to leave the EU. Over a number of years the law has been harmonised across the EU, but with different systems there would almost certainly be a divergence over time in the law between the UK and EU trade mark systems. This could be simply down to case law, or through actual changes, but changes would likely be gradual.
If the UK was to vote to leave the EU there would be a great deal of uncertainty, the outcomes for the UK trade mark attorney profession would be largely dependent on the negotiations following the vote.
There is certainly a cause for concern that the UK leaving the EU would have a negative impact on the profession and on trade mark and designs rights holders in the long-run. The uncertainty over how the system and traditional arrangements would work remain and would create an added complexity to the way trade marks work in the EU and UK.
However the reputation and trust the UK profession has built up over time and the potential increase in UK based filings could help make up loss in business, at least in the short-term.
ITMA, March 2016