It is wise to use trademarks to protect your firm’s intellectual property (IP), to gain a competitive edge in your chosen industry. Trademarks are governed by British and European regulations, so what happens when the UK leaves the EU? Turner Little asks: how could Brexit change trademark protection?
Brexit benefits
In June 2016, the UK voted in favour of leaving the EU. After the referendum, the value of the Pound against the US Dollar fell to its lowest point since the 1980s. Recently, Prime Minister Theresa May said the UK will pursue a ‘hard’ Brexit policy, to make the UK “a fully independent, sovereign country.”
Brexit could potentially bring key benefits for small businesses. The falling value of the Pound could make it easier for foreigners to buy UK goods, potentially creating new revenue streams for British exporters. Also the UK government will no longer be bound to adhere to EU regulation, so Whitehall may be able to create a more beneficial regulatory environment for small businesses in areas such as trademark laws.
Effect on trademarks
There is a lot of uncertainty on how Brexit will effect IP laws. Many firms are interested in safeguarding their EU trademarks, which also currently apply in the UK. The problem lies with the legislation which created EU trademarks in 1993 (EU Council Regulation 40/94). Specifically, this regulation does not state what the consequences are for these trademarks when a country leaves the EU.
The EU trademark system is a single registration process, so the owner has exclusive rights to the relevant IP in all member territories. The owner of an EU trademark can prevent third parties from using the same/similar marks for identical/related goods and services. EU trademarks are unitary, meaning that their protection is extended to all member states, not just some nations and here lies the problem.
EU trademarks apply in the UK, as they are unitary. But once Brexit has occurred, these trademarks will no longer apply in the UK, so in theory, the owner of an EU trademark could lose their IP rights in the island nation. This potentially means that UK trademark protection would require a national proceeding, although it is unclear how this will play out after Brexit comes into effect. Many experts assume that Whitehall will provide EU trademark holders with the means to register these as UK trademarks.
It is vital that your company takes Brexit into consideration, when determining future license and IP agreements, as the above listed provisions will only be transitional. Many agreements include territorial provisions, with the scope typically defined as the ‘European Union.’ It is not yet clear how this will be interpreted, once Brexit has come into force. It is therefore advisable for your firm to change any existing IP agreements, redefining the scope to include the ‘United Kingdom,’ before Brexit becomes a reality.
Registering trademarks
We will not know how Brexit changes UK trademark regulation until the removal process is completed. Therefore, it is key that you take the potential ramifications of Brexit into account when registering new trademarks. It is advisable to enlist expert aid here, due to this uncertainty. Turner Little can supply you with the trademark registration advice your firm requires.
Turner Little
Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.
