Trade Marks & Brexit – A Further Update

The UK’s departure from the EU has now been delayed until 31st October 2019, subject to us holding elections to the European Parliament, with an option to leave earlier if the UK ratifies the Withdrawal Agreement. This six month reprieve is very welcome, given that:

  1. The Withdrawal Agreement agreed between the British Prime Minister and the EU has been overwhelmingly rejected by Parliament, and
  2. There is still no consensus in Parliament as to which form Brexit should take, and if it should happen at all. Parliament is only clear that it does not want to see a “no-deal Brexit”.

As matters stand, the following scenarios are all possible:

  • The UK reaches an agreement with the EU by 31st October, beginning the transition period for implementing the Withdrawal Agreement until 31st December 2020, with this date marking the UK’s actual exit from the EU.
  • A further extension to the 31st October 2019 deadline will be sought, possibly to allow for a second referendum or general election to take place.
  • The UK crashes out of the EU on 31st October 2019 without a deal;
  • Article 50 is revoked and the UK remains in the EU.

We are following developments closely, and will continue to advise as matters develop.

Despite the political uncertainty, we do have more clarity around the fate of existing EU trade marks (EUTMs) when the UK leaves. Separate ‘cloned’ UK trade mark registrations will be created in the UK. These will mirror their corresponding EU registrations (or granted EU designations under the International Registration (IR) system), and there will be no official fee for this cloning process. The UKIPO recently clarified how the cloned UK registrations will be numbered – this will be by adding the prefix UK009 to the last 8 digits of the corresponding EUTM registration (follow this link).

In terms of timing, this will happen as soon as is reasonably practicable after 31st October (or later if this deadline is extended), or at the end of the transitional period if the UK leaves with a deal. In practical terms, therefore, the deal or no deal scenarios only affect the timing of this cloning process and not its substance.

Cleveland Scott York will take these cloned UK registrations onto our records without charge. Where we are currently responsible for existing EU registrations, we will automatically add the cloned UK mark to our records and let you know when we have done so. We are also happy to add UK registrations cloned from EUTMs managed by different Attorneys to our records.

The cloning process only applies to EUTM registrations existing on exit day, whether 31st October 2019 or 31st December 2020 (or any other day). In the case of EUTMs pending on exit day, applicants will have nine months within which to apply for cloned UK applications to be created from their pending EUTMs. There will be an official fee for this, which we understand will be the same as filing a new UK application.

Given the current state of play, there are circumstances in which brand owners should consider filing separate UK applications notwithstanding the cloning process. Our advice here is as follows:

  • Although the UK IPO has confidently claimed that cloned UK registrations will automatically be created from all existing EUTM registrations on exit day, we have no information about how it proposes to do this, and how long the process might take. In addition, it is not merely the creation of these cloned registrations which is relevant but the related administration which follows. Given that millions of cloned registrations will have to be added to the UK Register, we are concerned that there could be some delay while the process is completed and the Register may be in a state of flux for some time, particularly if the UK ‘crashes’ out of the EU on 31st October without a deal. A brand owner wishing to bypass the uncertainty caused by this can consider refiling a UK application now. This may be advisable if the UK is a particularly important market, or if the brand owner has a specific reason for wanting to secure an enforceable registration as quickly as possible, even in a no deal situation.
  • An EUTM filed now is unlikely to proceed to registration before 31 October 31st October, so an applicant may want to file simultaneous UK and EUTM applications to increase certainty and avoid having to apply for the pending EUTM to be cloned into a separate UK application within the 9 month window. Post-Brexit, separate UK and EU applications will of course be necessary in any event to secure protection in both jurisdictions.

We are also currently advising our clients to designate the UK as well as the EU within existing and future International Registrations. This is because the present provisions mean that an EU designation within an IR cannot give rise to a UK designation via the cloning process, but only to a UK national application/registration. Longer term, there are cost savings and administrative benefits to having the UK under the umbrella of an IR in this situation, rather than having a separate cloned UK registration.

If you would like any further advice regarding the implications of Brexit on your existing trade mark portfolio, whether your focus is before or after exit day, please do not hesitate to contact us.

In the meantime, we are continuing to monitor the situation and will keep you informed of developments.

By Jonathan CleggLorna Hobbs and Peter Houlihan

Updated 17 April 2019

New member joins patent team

We recently welcomed Khushbu Solanki, a Technical Assistant, to the team.

Khushbu will be working closely with Adrian Bradley, preparing a filing patent applications and working on prosecution between the UK Intellectual Property Office and the European Patent Office. She has a strong background in Biochemistry, which means she is well suited to dealing with a range of pharmaceutical and biotechnological subject matters.

Khushbu graduated from Queen Mary, University of London with a first class degree in Biochemistry and, during her studies, undertook research into neurodegenerative diseases. As part of this research, she studied metal binding to protein structures using a range of different technologies such as Visible Circular Dichroism Spectroscopy and Electron Paramagnetic Resonance Spectroscopy. This led to the publication of a research paper in the Journal of Biochemistry.[:]

Nike’s JUMPMAN jumping for joy

The question of how much, and how widespread, use of a trade mark must be in order to maintain a European Union Trade Mark has been the subject of controversy in the past few years. A recent decision of Daniel Alexander QC, sitting as the “Appointed Person” (the appeal tribunal from the UK Intellectual Property Office), has helpfully provided a comprehensive review of EU and UK case law on this question.

Background

Intermar Simanto Nahmias, a Turkish company specialising in footwear, opposed a UK trade mark application by Nike for the word JUMPMAN in respect of clothing and footwear goods. Intermar opposed on the basis of its earlier European Trade Mark (EUTM) registration for the word JUMP, covering footwear and socks. Its registration was over 5 years’ old at the time of the publication of Nike’s application, and it was therefore asked by Nike to provide proof of use of its JUMP trade mark in the European Union between March 2008 and March 2013.

Intermar’s use of its JUMP trade mark

Intermar submitted evidence which showed that in the last 16 months of the 2008-2013 period, it sold around 55,000 pairs of trainers and other types of casual shoes under the JUMP mark (amounting to approx. USD476,000 in value). The sales were made to a company in Bulgaria, which in turn sold the footwear via its shop in Varna, Bulgaria. The Bulgarian company also sold 120 pairs of footwear on to a Romanian company, but it was not established whether the Romanian company sold the footwear to end-users.

No sales were made in the EU between 2005 and 2012, but it was noted that some sales took place before the relevant period, specifically about 53,000 pairs of footwear were sold to four businesses in Germany, Finland, Spain and Greece in 2005, and 802 pairs to a single business in Bulgaria in 2007, and that sales to the Bulgarian company continued after the relevant period.
On the basis of the above evidence, the Hearing Officer at first instance found that Intermar had failed to prove “genuine use” of its trade mark. Whilst the Hearing Officer noted that the use did not appear to be token or sham, it was still insufficient to show genuine use within the meaning of the provisions of the EUTM Regulation, following the CJEU’s decision in Reber Holdings GmbH & Co KG v OHIM, C-141/13P (a case in which sales of handmade chocolates from one shop in Germany were deemed insufficient to maintain an EUTM).

According to the Hearing Officer, the use shown by Intermar in the context of the EU footwear market did not constitute real commercial exploitation of the mark in the EU, and was not significant enough to justify maintenance of the registration. As a result, the opposition was dismissed.

The appeal

Intermar appealed, claiming that the Hearing Officer failed to apply the correct principles of law, incorrectly evaluated the extent of use, and made that evaluation using incorrect standards.
The Appointed Person in his decision provided a thorough review of recent UK case law and confirmed that, whilst the geographical scope of use was one factor to be assessed when adjudicating on genuine use of a mark, there was no pre-set rule as to the geographical extent of use required. He did, however, state that the EU Courts, in his view, had highlighted “the importance of viewing the question of whether there had been use or non-use of a CTM [EUTM] in particular from an EU perspective”. In other words, “the Community” was the reference point for all consideration of whether an EUTM has been put to genuine use.

Given the use made of the JUMP mark by Intermar, and bearing in mind the scale of the market for footwear in the EU, the Appointed Person concurred with the Hearing Officer’s finding that that there had not been sufficient use by Intermar “in the Community” as required by the provisions of the EUTM Regulation. The appeal was accordingly dismissed and Nike’s JUMP mark permitted to proceed to registration.

The outcome of this case may seem harsh, especially to small and medium-sized businesses with presence in only part of the EU. However the decision, in the words of the Appointed Person, “reflects the recognition of a need for some degree of proportionality between the territorial and substantive scope of rights in question [i.e. EU Trade Marks] and the activities a right owner has done to justify them, given 5 years in which to support its retention of rights.”
That is a rational and admirable aim. The current approach to “genuine use”, as established by the EU Courts and as highlighted in this case, adopting as it does a multi-factorial assessment, makes it very hard to judge when a proprietor will be able to maintain an EUTM and when it will not.

It is no longer sufficient for a proprietor to make good faith use of its mark – it must achieve a level of use which amounts to real commercial exploitation, viewed from an EU perspective. Given the lack of certainty that this test provides, we expect to see further cases on this question before the highest courts in Europe.[:]

Deborah Lowther joins Cleveland IP

Cleveland IP, the firm of Intellectual Property specialists with offices in the City of London and Reading, has welcomed Chartered UK and European Patent Attorney Deborah Lowther to its team.

Deborah joins Cleveland IP with more than 25 years’ experience in private practice and in industry. Her CV includes spells with a London-based firm representing both UK and overseas clients and in-house roles with QinetiQ (formerly DERA) and Isentropic Limited, a start-up energy storage company.

These roles have equipped Deborah with particular expertise in patent portfolio management, invention harvesting, freedom to operate searches and competitor monitoring activities. Deborah also has expertise in due diligence, IP audits and IP sales activities.

Deborah said of her appointment to Cleveland IP: “I’m excited to be joining the team at Cleveland IP. I look forward to working with the team to safeguard and protect our clients’ Intellectual Property.”

Jonathan Clegg, Partner at Cleveland IP, added: “We’re delighted to welcome Deborah to the team. Our clients are sure to value the wealth of experience she brings with her.”[:]