Brexit and its impact on UK and EU trade mark rights

Last month the UK voted to leave the European Union, leaving many questions unanswered about how this will affect existing EU trade mark rights and their enforceability in the UK.

While it will likely be at least two years before the UK officially leaves the EU, brand owners with commercial interests in Europe and/or the UK should be mindful of the potential consequences that Brexit could have on their trade mark rights.

EU trade marks are not a bundle of national trade mark rights for each EU member state but rather a unitary right which is enforceable across all 28 member states. Theoretically EU trade mark registrations could lose their protection in the UK entirely once the UK officially leaves the EU. However, it is more than likely that transitional measures will be introduced to help ensure that rights holders are given the opportunity to adjust to any new regime, though what these measures would entail remains to be seen. The content and nature of these measures will depend on the outcome of withdrawal negotiations between the UK and the EU to begin once the UK formally notifies the European Council of its intention to leave in accordance with Article 50 of the Lisbon Treaty.

In the meantime, EU laws will continue to apply as they have been and EU trade marks will continue to be enforceable in the UK. However, once the UK officially leaves the EU, brand owners will most likely be required to file for separate UK national trade mark rights. It is also possible that existing EU trade marks may be able to be converted to UK national trade marks, however it is unclear whether this would take place automatically or upon application.

A further potential implication of Brexit on EU trade mark rights is how it may affect the ability of rights holders to establish “genuine use”. Under EU law, the rights of an EU trade mark holder can be revoked if, within a continuous period of 5 years, the trade mark has not been put to genuine use in the EU in connection with the registered goods or services (in Australia this period is 3 years). Where an existing EU trade mark has only ever been used in the UK, it may be vulnerable to an application for revocation for non-use once Brexit officially occurs. Similarly, EU trade marks which have never been used in the UK may also be vulnerable to non-use under a national UK regime. However, it is possible that even in the absence of any legislative intervention that UK and EU courts will take into account the use of the mark prior to Brexit. In relation to the enforcement of EU trade mark rights through the courts, details which will need to be clarified include how cross-border enforcement will operate, whether the UK court will adopt and continue to follow the judgements of the European Court of Justice and whether injunctions previously imposed by the EU Court will continue to have effect in the UK once it leaves the EU.

While the true impact of Brexit on EU trade mark rights remains to be seen, it is important that EU trade mark owners and licensees review their agreements and monitor any changes that occur to ensure that they place themselves in the best position to protect their valuable IP rights.