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The Consequences of Brexit for IP Law since January 1, 2021

The final withdrawal of the UK from the EU on January 01, 2021 has drastic consequences in the field of intellectual property. This applies in particular to EU trademarks and Community designs, which grant trademark and design rights for all EU member states. After Brexit, particularities have to be considered for the continuation of these rights as well as for some other intellectual property law issues.

1. Trademarks and Designs

a) Protection of rights that already existed on December 31, 2020

Of fundamental importance for the continued existence of EU trademarks and Community designs is the status of these rights on December 31, 2020:

Registered EU trademarks and Community designs have lost their validity in the UK on January 1, 2021. However, they have been "cloned" and will now continue as "national" trademarks and designs in the UK. Neither an application nor the payment of a fee is required for this. The same applies to IR trademarks and IR designs with protection in the EU. These too were automatically converted into national rights by the UK IPO free of charge. The priorities of the EU trademarks and Community designs as well as seniorities in the UK - as far as they have been claimed - remain valid for the new national rights. The term of protection of the new national rights end on the same day as that of the corresponding EU trademarks or Community designs as well as the IR trademarks and IR designs which are the basis for the cloned national property right in the UK. For the use of the new national trademarks that preserves the rights, all acts of use that took place within the EU until December 31, 2020 are also considered use of the UK trademark. Conversely, the owner of an EU trademark can rely on the use of the trademark in the UK until the date of withdrawal. Unlike in the case of registered IP rights, the owners of pending EU trademark applications and Community designs that were not yet registered at the time of withdrawal must take action if the applications are to be further pursued in the UK. An automatic conversion does not take place here. Rather, for the conversion into a UK trademark application or the application of a UK design, a corresponding request must be filed with the UK IPO. If this application is filed by September 30, 2021, the national application will be granted the filing date as well as the priority or any seniorities of the application at the Union level. This also applies to IR trademarks and IR designs where the EU has been designated.

b) Options for action to protect new trademarks and designs in the UK

In the future, there will be two possibilities to have trademarks and designs protected in the UK: Either national applications are filed with the UK IPO or the UK is designated when filing an IR trademark or design with WIPO. This option is generally less expensive than national applications. The European Union Intellectual Property Office (EUIPO) has already ruled on the consequences of Brexit on ongoing opposition proceedings in a first case. The opposition filed in 2018 was based exclusively on national UK trademark rights. As the UK was no longer a member of the EU at the time of the decision (Feb. 12, 2021), the opposition against the EU trademark application was rejected on the ground that it was not based on rights valid in the EU.

2. Patents

European patents granted by the European Patent Office (EPO) based on the European Patent Convention (EPC) are not affected by the UK's withdrawal from the EU. Unlike EU trademarks or Community designs, the European patent does not constitute Union law. The EPC is an international treaty and the European patent is a bundle of national patents. Only the application and the procedure for grant are centralized at the EPO. The UK remains involved, so European patents granted for the UK are treated as national patents. The UK was particularly keen on the introduction of a European unitary patent, which, like the EU trademark and the Community design, is intended to grant uniform EU right. After the UK left the Union, however, the European unitary patent, which is expected to be launched at the beginning of 2022, will no longer play a role there.

3. Interpretation of License Agreements and Delimitation Agreements

In the case of existing license agreements and coexistence agreements concluded for the entire EU prior to Brexit, the question arises as to whether the EU named as the contractual territory refers to the respective current member states or to the members of the EU at the time the agreement was concluded.

As a general rule, it can be assumed that in the case of a license agreement concluded for the EU prior to the UK's exit, the territory of the UK should also be included after December 31, 2020. In this case, however, the licensor must ensure that the IP right also continues to exist for the territory of the UK and that there is a valid national protection right in the UK, e.g. for EU trademarks and Community designs. To be on the safe side and even more in case of doubts, it is urgently necessary to conclude supplementary agreements in which the territorial scope is defined beyond doubt.

Even in the case of prior rights and coexistence agreements, which are particularly common in trademark conflicts, it must be determined by interpretation whether these will continue to be valid for the UK after Brexit if they were concluded for the EU before the withdrawal. The decisive factor here is, above all, where the brands stood in relation to each other at the time the agreement was concluded. In most cases, the validity and continued existence of the agreement in the UK is likely to be intented. However, clarifying supplementary agreements are also strongly recommended - at least in cases of doubt.

4. Exhaustion, parallel imports and border seizure

For trademarks, designs and other intellectual property rights, the principle of Union-wide exhaustion of the distribution right applies. This means that for example a product put on the market in the EEA with the consent of the trademark owner can be resold there without infringing the owner's rights. After Brexit, exhaustion of trademark rights in the EEA will no longer occur in the event of first-time marketing in the UK. Therefore, companies importing corresponding goods in the EEA require the consent of the owner of the IP rights. Otherwise, these are infringed. For the reverse case, where the goods are placed on the market in the EEA for the first time and then imported into the UK, the exhaustion regime remains in place. Thus, owners of IP rights in the UK will no longer be able to prevent parallel imports from the EEA, but owners of IP rights in the EEA will be able to prevent parallel imports from the UK. However, these are only temporary circumstances. The UK government has already announced that it will decide on this in the first half of 2021. In addition, since January 1, 2021, border seizure applications for the EU, which can prevent the import and export of IP infringing goods at the external borders of the EU, no longer apply to the territory of the UK. Instead, new applications must be submitted to the national customs authorities for the UK territory.

Conclusion

The impact of Brexit on IP law is manifold: trademarks and designs will have to be protected in the EU as well as in the UK in the future. EU trademark and Community designs no longer provide rights in the UK.  Patents granted by the EPO on the basis of the EPC, on the other hand, will continue to be valid in the UK. Whether the distribution right is exhausted depends on where the IP right was first brought to market. It is therefore necessary to examine in each individual case whether and how an IP right can be comprehensively protected in the UK.

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