Trade marks - Tuvalu and Montenegro scenarios

EU-flagWorking document - as at 19th January 2017

This document expands upon the ‘Montenegro’ and ‘Tuvalu’ scenarios we outlined in CITMA’s ‘EU registered rights - trade mark’ document.

We provide additional detail on how issues such as pending applications and non-use cancellation could be addressed under each scenario, together with brief comments.

Click here for a table summarising the various options considered

The Montenegro model
All existing EUTM registrations would be automatically entered onto the UK trade mark register as UK trade mark registrations with the same scope of protection, registration date and, where applicable, priority and seniority.

The Tuvalu model
Existing EUTM registrations would be entered onto the UK trade mark register, as for the Montenegro model, but only if the owner makes a positive decision to extend them to the UK - probably by filing a form within a set period.

Intent to use

In contrast to UK national applications (and UK designations of International registrations) EU trade mark applications do not require a bona fide intention to use the trade mark. There is concern that entering EU trade mark registrations onto the UK register without provisions on intent to use would undermine the state of the UK register.

Montenegro: All newly created UK ‘child’ registrations should have a (rebuttable) presumption of intention to use. The owner of such registrations would be required to confirm use/intent to use at the time of renewal, or upon enforcement, amendment of the registration or other interaction with the UKIPO, if prior to renewal. The presumption of intention to use could be challenged in cancellation proceedings.

Tuvalu: The form/system for opting in to entry onto the UK register should include a declaration of actual use/intent to use.

For the Tuvalu scenario, introducing a declaration at opt-in is very straightforward. For the Montenegro scenario, requiring a declaration of intention to use at Brexit or shortly afterwards effectively creates an opt-in mechanism, turning Montenegro into Tuvalu. Providing an option to make such a declaration early could have a similar effect. The presumption of an intention to use could be challenged through a cancellation action, just as the presumption of validity can be challenged.

Non-use cancellation

Both scenarios raise issues for non-use cancellation of EU trade mark registrations entered onto the UK register, both in terms of vulnerability to cancellation and the requirements of genuine use.

Montenegro & Tuvalu: All newly created UK ‘child’ registrations would become vulnerable to non-use cancellation five years after the registration date of the parent EUTM registration. If the owner is required to prove use of the mark prior to the date of Brexit, use of the mark anywhere in the EU would be acceptable to prove use. After the date of Brexit only use in the UK would be valid.

This approach seeks to avoid a situation where the UK child registration of a mark which has been used in the EU, but not in the UK, becomes vulnerable to non-use cancellation the moment it is created (if it’s more than five years old) but without providing a new period of invulnerability for marks which have not been used at all. If this proposal is adopted, it is anticipated that a substantial number of the UK child registrations created will be vulnerable to at least partial revocation for non-use. We consider this acceptable.

Example: Two years after Brexit, a non-use cancellation action is filed against a UK ‘child’ registration. The UK registration’s parent EUTM registration was registered more than five years earlier, meaning the UK registration is potentially vulnerable to cancellation for non-use. In order to prove use of the UK ‘child’ registration, the owner could file proof of use of the mark anywhere in the EU during the three years before Brexit. For the two year period between Brexit and the commencement of cancellation proceedings, only use in the UK would be acceptable.

Seniority

A substantial number of existing EUTM registrations have UK seniority claims, where the earlier UK trade mark registration has been allowed to lapse. Without specific provision, these earlier rights would be lost.

Montenegro & Tuvalu: All lapsed UK trade mark registrations for which there is a valid seniority claim should revive (with no back-dated renewal fees). This would create 2 or more UK trade mark registrations; the UK ‘child’ registration and the revived UK national registration(s).

This is felt to be the most straightforward approach, avoiding the need for owners to communicate with the UKIPO, or the introduction of a new legal concept to UK trade mark law. Whilst this may introduce unwelcome duplication in some trade mark portfolios, it is considered preferable to the alternatives.

Pending applications

Under the Montenegro and Tuvalu scenarios, EUTM registrations are brought on to the UK register. Some provision for pending EUTM applications is required (even if only to explicitly exclude pending applications from transfer).

Montenegro & Tuvalu: introduce a cut-off date prior to Brexit (e.g. six months prior to Brexit). No EUTM applications filed after this date (and which are still pending upon Brexit) are transferred to the UK register. Of the EUTM applications which are transferred, those which have been published by the EUIPO would be republished in the UK Trade Mark Journal. Those which have not been published would give rise to a corresponding UK trade mark application and be re-examined by the UKIPO, upon request by the applicant (and payment of a fee).

Introducing a cut-off date prior to Brexit would greatly reduce the number of pending EUTM applications which would need to be considered. Given that the date of Brexit will be known some time in advance, it would seem just that EUTM applications filed after the cut-off date are not transferred – there would be no expectation that such applications would give rise to UK rights. Publication by the EUIPO provides a simple means of establishing a subset of EUTM applications which have been examined and accepted by the EUIPO, and which should not require re-examination. N.B. some published EUTM applications will be under opposition – see ‘Ongoing Proceedings’ below.

Language

Some EUTM registrations contain errors in the English-language version of the specification of goods and services, owing to faulty machine translation from the original language.

Montenegro & Tuvalu: Issue a practice amendment to indicate that any such errors should be dealt with under existing provisions on the correction of obvious errors.

Address for service

Many EUTM registrations have an address for service outside the UK (but within the EEA). Currently, this would not present a problem as UK trade mark registrations may have an address for service in any EEA country. However, it is anticipated that this may change prior to Brexit, meaning that a mechanism for appointing a UK address for service would be required.

Montenegro: Enter existing EEA address for service onto the UK register and require the owner to appoint a UK address for service at renewal, enforcement or other interaction with the UKIPO.

Tuvalu: Nominate UK address for service at opt-in.

Again, the approach for the Tuvalu scenario is straightforward – nominate a UK address for service at opt-in. For the Montenegro scenario, a requirement to nominate a UK address for service at Brexit, or shortly afterwards, effectively creates an opt-in mechanism for a substantial proportion of EUTM registrations, turning Montenegro into Tuvalu. Importing the existing EEA address for service initially is considered preferable to the UKIPO corresponding directly with the owner (owing to the greatly increase chances of missed deadlines and the opportunity for fraudulent activity by third parties).

Ongoing proceedings

At the date of Brexit there will undoubtedly be ongoing proceedings before the EUIPO, boards of appeal and higher courts concerning EUTM applications and registrations. Many, but not all, of these disputes may be relevant to the UK.

Montenegro & Tuvalu: Proceedings do not transfer to the UK, but corresponding proceedings may be commenced in the UK claiming a ‘priority right’ from the EU proceedings, i.e. the UK proceedings would be deemed to have commenced on the same date as the EU proceedings.

Attempting to transfer EU proceedings to the UK, or tying the fate of UK child registrations to on-going EU proceedings creates a myriad of potential difficulties. Whilst the proposal above is not without disadvantages (in particular the potential duplication of proceedings and corresponding increases in cost), we feel that it provides a simple, fair approach and a clean break with the EU system.

Examples:
i) at the date of Brexit, invalidity proceedings are on-going against a EUTM registration. This registration would be transferred to the UK register (notwithstanding the on-going proceedings). The applicant for cancellation could choose to commence invalidity proceedings against the UK child registration, with the option to claim the ‘priority date’ of the EU proceedings (i.e. this would be used as the date of assessment in the UK proceedings);

ii) at the date of Brexit, opposition proceedings are on-going against a EUTM application. Under the proposals on pending marks, this application would be republished in the UK Trade Mark Journal (notwithstanding the opposition). The opponent could choose to oppose the UK child application, with the option to claim the ‘priority date’ of the EU proceedings (i.e. the publication date of the EUTM application).