As we all know, the United Kingdom left the European Union on 31st December 2020.
On 1st January 2021 all the granted EUTMs were automatically cloned in comparable UK trademarks retaining the EU application or priority date. Owners of pending EUTMs on this date have been granted a transitional period of 9 months, expiring on 30th September 2021, to re-file them in the UK retaining the EU filing or priority date.
However, does BREXIT have other implications for EUTMs? The answer is YES and we will refer to the main ones.
In case an EUTM registration was subject to an ongoing cancellation action on 31st December 2020, the outcome shall also be applied to its UK clone. The only exception is where the grounds for cancelling the EUTM do not apply in the UK, for instance, absolute grounds because of its meaning in a language other than English.
UK trademark registrations are vulnerable to non-use cancellations after a non-interrupted period of 5 years of non-use. However, a big part of EUTM registrations was never used in the UK before BREXIT. This means that applying the same non-use rule to their UK clones may lead to mass cancellations. To avoid this, if the 5-year period includes time before 1st January 2021, any use of an EUTM registration will count as use of its UK clone (whether inside or outside the UK).
Licenses recorded against EUTMs before EUIPO will continue to have effects in the UK. However, since the UK law does not require them to be registered to have effects, the license will not be recorded in the UK clone automatically. The owners of the UK clones have been granted a transitional period of 12 months from 1st January 2021 to register a license which is already registered with EUIPO.
Before 1st January 2021, exhaustion of IP rights occurred in the EU, including the UK, when a genuine product was placed on the market anywhere in the European Economic Area (EEA) by the IP-right holder or with its consent. Exhaustion of IP-rights in the EU means that their owners cannot prevent parallel trade, that is, further distribution or resale of genuine goods within the EEA.
At the moment and from 1st January 2021, genuine products placed on the UK market by their owner or with their consent will no longer be considered exhausted in the EEA. However, genuine products placed on the EEA market by their owner or with their consent will indeed be considered as exhausted in the UK.
This may be a temporary solution since the UK government plans to publish a formal consultation during 2021 about exhaustion and parallel trade to decide their position in the future.
Article by Menchu Pérez.