Brexit’s Effect on Trademarks in the European Union
While watching late-night television hosts comment on the political circus that is Brexit, it’s easy to consider it just a respite from our own political dramas here in the United States. However, Brexit will have real consequences on businesses operating in Europe in many ways. The effect of Brexit will be felt, even by US businesses and consumers, but this article describes particularly the effect of Brexit on trademarks in the European Union.
Many US businesses take advantage of the unified trademark filing system in the European Union. The system permits a trademark holder doing business anywhere in the EU to file a single trademark application to cover all of the EU member states, as opposed to filing trademark applications in each country in Europe in which the business is operating. The unified EU trademark system not only substantially reduces costs for trademark holders, but provides assurance that trademark rights extend throughout the EU rather than on a country by country basis.
The United Kingdom has already notified the EU of its intent to leave the EU following the 2016 referendum approved by voters in the UK. The approval of the Brexit referendum resulted in the resignation of a UK Prime Minister, and two subsequent Prime Ministers have attempted, without success, to negotiate and ratify a withdrawal agreement with the EU, the agreement between the UK and the EU setting the terms of withdrawal of the UK from the EU covering such matters as currency, citizens’ rights, border arrangements, and dispute resolution. The UK and the EU have extended the “exit date,” the date that Brexit is to be effective, several times, with the current exit date being January 31, 2020. The exit date has been extended in order to give the UK and the EU a chance to negotiate and ratify the withdrawal agreement, although it’s possible that the UK could leave the EU without any agreement at all (a “no-deal” Brexit).
Current drafts of the withdrawal agreement provide for a transition period from the exit date until some point in the future. December 31, 2020 has been the date proposed thus far, although it is always possible that the date gets extended further. During the transition period, owners of EU trademark registrations granted before the end of the transition period will automatically become the holder of a comparable registered trademark in the UK. So, as long as a trademark registration issues before the end of the transition period, trademark holders won’t have to do anything. Based upon the EU trademark office’s current speed of registration, the majority of applications filed by the exit date should be registered and automatically convert into UK registrations. For applications pending with the EU as of the end of the transition period, the applicant will be entitled to file a corresponding trademark application in the UK within nine months of the end of the transition period (i.e. September 30, 2021). The new UK application will retain the filing date and priority date of the European application.
But what happens to trademarks if there is no agreement between the UK and the EU? Most obviously, there will be no transition period and no agreement to automatically register in the UK trademarks that have already been registered in the EU. The UK government has said that it will provide a new equivalent trademark registration system which will come into force upon the UK’s exit from the EU and that the new UK right will be provided with “minimal administrative burden.” It is not clear whether trademark holders will have to file a new application in the UK or whether they will have to pay a fee, although they probably will have to at least indicate whether they want their trademark rights to be registered in the UK. The expectation is that trademark holders will receive notification from the UK regarding their trademark registration. For applications in the EU that have not yet matured into registration, the UK intends to provide nine months from the date of exit to refile an application in the UK using the normal application process. However, there will be no notification to trademark applicants of the need to file an application in the UK. The applicant will have to file a new trademark registration and pay the standard filing fees to obtain a UK trademark registration.
Of course, we continue to monitor the Brexit situation and are coordinating with European counsel to make sure that all of our clients’ trademarks in the EU will continue to enjoy the protection desired by the trademark holder. However, if you have any questions about registering your trademark outside the US or the effect of Brexit on any registered or unregistered trademark rights in the EU, please feel free to contact Pat Shriver at firstname.lastname@example.org.