Brexit and Branding The impact of the Brexit on trademarks and designs Speakers and moderator Speakers Mladen Vukmir VUKMIR & ASSOCIATES, Croatia Niamh Hall FRKELLY, Ireland Zorita Pop RB, United Kingdom Moderator Geert Glas ALLEN & OVERY, Belgium 2 July 11, 2016 1
Content 1. Withdrawal and alternatives to EU membership 2. Implications for existing EUTMs and pending applications for EUTMs 3. Recent European experiences with territorial morphing and jurisdictional reshaping 4. Possible effects on enforcement of IP-rights 5. Implications for Community Designs 6. Strategies 7. Questions & Answers 3 Withdrawal and alternatives to EU membership 4 July 11, 2016 2
Referendum Should the United Kingdom remain a member of the European Union or leave the European Union? Remain a member of the European Union: 48% Leave the European Union: 52% 5 Withdrawal from EU Art. 50 TEU: UK only exits EU after a two year negotiation period on a withdrawal agreement. Notification: two year period starts after UK has given a formal notice to the Commission on its intention to leave the EU. Extension: extension of the two year period seems unlikely as it needs to be approved by all the Member States Negotiation with EU: obligation of EU to try and negotiate arrangements of withdrawal and framework for their future relationship with UK. Negotiation with third parties: to ensure market access Exit: after withdrawal agreement enters into force OR when no agreement is reached, after a two year period. 6 July 11, 2016 3
What happens next? Option 1: European Free Trade Association (EFTA) With EEA-agreement ( Norway model ) Access to EU internal market + freedom of movement of people, capital, goods and services Bound by majority of EU legislation + rulings of CJEU No influence on EU legislation process Contribution to EU budget: (reduced) Unlikely Without EEA-agreement ( Swiss model ) Still benefit of EFTA: combined forces to negotiate trade agreements market access to larger market But has its own bilateral agreements with EU concerning market access In theory not automatically bound by EU legislation; in practice necessary to ensure reciprocal market access Contribution to EU budget (reduced) Unlikely (very complex) 7 What happens next? Option 2: World Trade Organisation (WTO) Without Free Trade Agreement (FTA) Only concerns trade Loss of access to EU internal market + no longer freedom of movement Free to set own policy concerning trade, immigration, financial services etc. Likely With Free Trade Agreement Same as without FTA But agreements with EU to reduce or remove some barriers Likely but hard to predict content 8 July 11, 2016 4
Implications for registered and pending EUTMs 9 Before Brexit 2 parallel systems of protection National registration in UK EU registration covering all 28 EU member states 10 July 11, 2016 5
After Brexit If no transitional arrangements National registrations in UK unchanged EU applications and registrations no longer cover UK but still cover remaining 27 EU member states 11 Possible Options Automatic extension of EUTMs to UK Jersey example, unlikely Revalidation / reregistration process Irish example, likely Fee, procedure, deadline Pending applications option Choose to proceed in UK or as EUTM Czechoslovakia example 12 July 11, 2016 6
Likely Practical Outcome Like EUTM Conversion (converts to national application, possibility of examination and opposition) - OR - Like most Transformations of International Registrations (Madrid Protocol) (transforms to national registration, by-passes examination and opposition stages) Retains same filing date / effective date for UK 13 Irish Example Ireland separated from the UK in 1921 Irish IP registers set up in 1927 Trade marks: Option to re-register UK registrations in Ireland, 19 month period Kept same date, no examination / opposition Reg fee, certified extract of UK registration Patents: automatically deemed protected until next renewal fee due, then re-registration needed with reg fee and documents 16,000 TMs / 8,300 patents re-registered 14 July 11, 2016 7
Practical Implications Pending proceedings Effect on Agreements Increased costs Enforcement / exhaustion / non-use issues 15 Recent European experiences with territorial morphing and jurisdictional reshaping 16 July 11, 2016 8
Ex Yugoslavia 17 Former Yugoslavia Date: Yugoslavia started gradually dissolving on June 25 - October 8, September 1991, April 1992 until 2006 or 2008. 3/4/5/6/7 jurisdictions: Slovenia, Croatia, Macedonia, Bosnia and Herzegovina, Serbia, Montenegro, Kosovo Rather different cultural and historical backgrounds. Simple IP system in place. Different timing lead to somewhat different solutions in the IP transition field. Slovenia and Croatia are today EU countries, Serbia, Montenegro and Macedonia candidates and BiH and Kosovo, which is not UN recognised, are potential candidates. 18 July 11, 2016 9
Rule 38 Rights acquired in former Yugoslavia by the international registration of marks (International Bureau of WIPO, Geneve) The Assembly of the Madrid Union on 29 September, 1992 adopted the new Rule No. 38, which apart from the Republic of Croatia applies to Slovenia and Ukraine, of the Regulations under the Madrid Arrangement, according to which the internationally registered marks with the territorial sign YU with the dates earlier 1 December, 1992 can be effective in the Republic of Croatia, provided that: request is submitted to the International Bureau of WIPO, Geneve on the basis of the written notification of the International Bureau of WIPO; fee in the amount of 62 Swiss francs for each internationally registered mark is paid to the International Bureau. The International Bureau will by the end of 1992 notify in written form each of the owners of the internationally registered mark with the sign YU, with the appeal to utilize the possibility provided by the Rule No. 38 prior to March 1, 1994. The Industrial property rights applied for by submitting the application at the former Federal Patent Office before 8 October, 1991, which were not granted or declined, can be effected in the Republic of Croatia by submitting the same applications to the State Patent Office until 4 November, 1993. This period was prolonged by a Regulation of the Government of the Republic of Croatia of 14 April, 1993. 19 Ex USSR 20 July 11, 2016 10
Former USSR Date: The Soviet Union was dissolved on December 26, 1991. The USSR was a conglomerate of many different republics with very different cultural and historical backgrounds. No modern IP system in place. 15 jurisdictions: Russian Federation, Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan 21 Former USSR Collapse of the Soviet Union stopped the efforts of reforming Soviet intellectual property law. Lack of coördination in the intellectual property sphere between the newly independent republics. None of the former republics possessed their own laws on the protection of industrial property, nor did they have their own institutions for the protection of industrial property. Trend among the various republics has been to establish their own IP laws and offices (national patent offices have been created first in Russia, Belarus and Ukraine). Experts thought that best solution would be an interstate IP system and interstate patent office. Russian Federation in 1992 passed a series of laws regulating intellectual property matters. Any prior Soviet or Russian registration that were already issued before October 17th 1992, did not had to be revalidated to be effective in the territory of the Russian Federation. 22 July 11, 2016 11
Ex Czechoslovakia 23 Former Czechoslovakia Date: Czechoslovakia was dissolved on January 1, 1993. 2 jurisdictions: Czech Republic & Slovakia. Rather similar cultural and historical backgrounds. Basic IP system and institutions in place in both. Applications for industrial property rights filed with the Federal Office for Inventions of Czechoslovakia and industrial property rights granted by that Office maintain their legal effect in both the Czech Republic and the Slovak Republic Future fees which are to be paid in both the Czech Republic and the Slovak Republic to the respective IP Offices. Rule 38 also applied for international marks. 24 July 11, 2016 12
Former Czechoslovakia Effects in the Czech Republic of International Registrations under the Madrid Agreement Concerning the International Registration of Mark (a) Pursuant to the deposit of the declaration of continuation referred to in paragraph (3), above, and pursuant to Rule 38 of the Regulations under the Madrid Agreement, any international registration with a territorial extension to Czechoslovakia effective from a date prior to Jan. 1, 1993, may have effect in the Czech Republic subject to the following conditions: (i) the filing with the International Bureau of the World Intellectual Property Organization (WIPO) of a request; (ii) the payment to the International Bureau of WIPO of a fee, the amount of which is 62 Swiss francs per international registration. 25 Former Czechoslovakia Effects in the Czech Republic of International Registrations under the Madrid Agreement Concerning the International Registration of Marks (b) The owner of each and every international registration concerned, or his representative (if the owner has a representative whose name appears in the International Register), will receive a written notice from the International Bureau of WIPO calling his attention to the fact that he can, by filing a written request, obtain a continuation of the effect of the international registration in the Czech Republic. The notice will contain a request form (in French) and specify the modes of payment of the fee. The request must contain the identification of the international registration concerned by its international registration number. The request must be made in English or French, and may be sent by telefax or telex. The request and the corresponding payment must reach the International Bureau of WIPO before the expiration of six months from the date of the notice sent by the International Bureau of WIPO; if either the request or the fee is received later, the request will be refused. Requests and payments may be made without waiting for the notice of the International Bureau of WIPO. (c) If the conditions described above are fulfilled, the international registration concerned will, with respect to the Czech Republic, have effect as from the effective date of territorial extension to Czechoslovakia and benefit from any priority validly claimed in regard to such extension. (d) For each international registration which has no territorial extension to Czechoslovakia or whose international registration date is later than Dec. 31, 1992, protection in the Czech Republic can only be obtained by filing, through the intermediary of the national Office of the country of the owner, a request for territorial extension under Rule 20 of the Regulations under the Madrid Agreement. It is to be noted that requests for territorial extension to the Czech Republic are possible at present. 26 July 11, 2016 13
Any lessons? Similarities: Only general similarities, nevertheless stimulating. Intention to do business simplifies transition. Are we prepared to say that different cultural and historical backgrounds persist in the EU or do we rely on the acquis communautaire and shared European history to say that the level is similar all over the EU? Long history of the European border morphing. All jurisdictions covered lasted roughly 70 years. 27 Any lessons? Differences: In Europe it is always easier to find differences. Transition to the market economies and to democratic societies in the EX jurisdictions unlike the EEA/EU market. Only Madrid system involved for the international marks in the EX jurisdictions, number of rights smaller. Can comparison be drawn between EUTM in Brexit and the position of the the EX jurisdictions national marks? No EU legal framework existed, and we can not compare the EX jurisdictions legal framework to the EU as they were tossed out altogether. 28 July 11, 2016 14
Any lessons? Conclusions: Although not directly comparable, some lessons can be learnt from every morph and reshape. The process needs not to be painful, systemic errors not to be expected. IP profession gains, businesses loose? Smaller businesses faced with more struggle. IP systems adjust to accommodate the business needs and legal security requirements relatively quickly. Morphing and reshaping of the European borders likely to continue and speed up. 29 Possible effects on enforcement of IP-rights 30 July 11, 2016 15
EU legislation and case law European Communities Act 1972 is repealed Secondary legislation would need to be reconsidered by UK Directive to approximate the laws of the Member States relating to trade marks European Union Trade Mark Regulation Directive on the Enforcement of Intellectual Property Rights EU Customs IP Enforcement Regulation CJEU Decisions no longer binding Referrals no longer possible 31 Enforceable rights No change for the UK trademark and designs rights ; Uncertainty: EUTM registrations and applications Vulnerabilities for non-use EUTMs used only in UK EUTMs used outside UK 32 July 11, 2016 16
Exhaustion of rights Exhaustion" rules would no longer apply to goods placed on the market in the UK => EUTMs may be used to prevent imports into the EU from the UK UK rights would not be exhausted by sales elsewhere in Europe and could be used to prevent parallel imports into the UK from the EU. Uncertainty: Parallel imports Goods in transit 33 Pan European injunction Loss of the UK courts' ability to grant pan-eu injunctive relief for infringement of Community rights Uncertainty: applicability in the UK of already granted pan- European injunctions that is granted by a Member State Applicability in the EU of already granted pan- European injunctions that is granted by UK Future: file two different court proceedings (in one EU member state for pan EU injunction and one in UK) 34 July 11, 2016 17
IP agreements & court decisions IP Agreements (e.g. license and coexistence agreements) - to review : Governing law Choice of jurisdiction for dispute resolution Definition of territory Court decisions - uncertainty: Decisions already granted covering EU Ongoing court litigation concerning EU IP matters 35 Uncertainty: Institutional cooperation Relation between UK and remaining EU member states customs authorities Relation between UK and the other law enforcement agencies Participation in joint enforcement efforts 36 July 11, 2016 18
Implications for EU design rights 37 Comparison with EUTMs Before Brexit, 2 parallel systems of protection National registration in UK EU (Community) design registration covering all 28 EU member states After Brexit, if no transitional arrangements National registrations in UK unchanged Community registrations no longer cover UK but still cover remaining 27 EU member states 38 July 11, 2016 19
Possible Options & Outcomes Automatic extension of protection Revalidation / reregistration Little difference if it results in UK application or registration No opposition procedure Rapid registration process Retaining date particularly important for novelty 39 Differences for Designs No current conversion mechanism No non-use issues However, many more similarities Exhaustion of rights - parallel imports Pending proceedings Increased costs Enforcement issues 40 July 11, 2016 20
Unregistered Design Rights Unregistered EU design right protection 3 years from first making available in EU General view: only applies if first disclosure of design is in EU After Brexit, first disclosure in UK will preclude unregistered EU design right? Legislation needed EEA status will not make a difference 41 Unregistered Design Rights UK unregistered design right Separate concept to EU protection 10 / 15 years EU designers plus selected other countries (HK, NZ) Will this apply to designers from the remaining 27 EU Member States after Brexit? 42 July 11, 2016 21
Unregistered Design Rights Different UK protection No protection for surface decoration No novelty requirement (criterion is original, i.e. not copied, and not commonplace) No exclusion for functional designs. Uneven playing field UK EU 43 Strategies 44 July 11, 2016 22
Strategies Wait and see? - OR Is there already room for pro-active initiatives? 45 Questions? 46 July 11, 2016 23
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