The effect of a "no-deal" departure from the EU

Yesterday's vote in the House of Commons, a record-breaking defeat for a government, leaves us with no clearer idea of what might happen at the end of March. By default, according to the law as it stands, we leave the EU on 29 March, and as there is no withdrawal agreement we will leave with nothing to govern our relationship with the EU. The chances of that changing are fairly good, given that Parliament (which is trying to wrest control of the process from the government - ironic, given that "taking back control" was supposedly at the heart of the whole idea of leaving the EU) has put in place provisions that make it pretty well impossible to crash out without a deal.

The most likely alternatives at present seem to be an extension beyond 29 March of the notice period given under Article 50 TFEU, or withdrawal of that notice (which the Court of Justice has kindly indicated can be done unilaterally, although only if it is in good faith - that is, not simply to delay matters). Neither of those requires consideration at present, because the status quo would be preserved.

The government has published guidance on what will happen in a variety of areas if there is no deal. One of its briefings concerns trade marks and designs. Originally these documents said that a "no-deal" withdrawal was unlikely: more recent editions seem to lack that reassurance. Ho hum. Although it does say: "We expect to negotiate a successful deal with the EU."

Of particular interest to trade mark and registered design owners is what will be the effect of their EU trade marks if no deal is reached. After all, for years they have been encouraged to believe that all they needed was protection at the EU level and many allowed their UK national rights to fall away, to save renewal fees. The answer is:

The government will ensure that the property rights in all existing registered EU trade marks and registered Community designs will continue to be protected and to be enforceable in the UK by providing an equivalent trade mark or design registered in the UK.

Note that this says nothing about charges. Under the draft withdrawal agreement, there would have been no charge for this: will the government be able to resist an opportunity to raise some revenue, especially when so much would come from foreign companies? Perhaps the financial arrangements of the Patent Office (or Intellectual Property Office as it prefers to be called) remove any attraction to this course of action - it might not benefit the Treasury.

Right holders with an existing EU trade mark or registered Community design will have a new UK equivalent right granted that will come into force at the point of the UK’s exit from the EU. The new UK right will be provided with minimal administrative burden. The trade mark or design will then be treated as if it had been applied for and registered under UK law.

And if a new corresponding trade mark has not been used in the UK in the past five years - will it immediately be liable to revocation? Will the proprietor be able to rely on the reputation acquired by the trade mark in other EU countries, when suing an infringer in the UK? The rejected withdrawal agreement dealt with these points, but the guidance says nothing. Logically, leaving the EU should mean that the new trade mark's past counts for nothing - the five year non-use period should start from scratch, and any reputation acquired elsewhere in the EU should be irrelevant.

This means that these trade marks and designs:

• will be subject to renewal in the UK
• can form the basis for proceedings before the UK Courts and the Intellectual Property Office’s Tribunal
• can be assigned and licensed independently from the EU right

No surprise there.

After exit, business, organisations and individuals with EU trade mark and Community design applications which are ongoing at the date of exit will be able to refile with the Intellectual Property Office under the same terms for a UK equivalent right, using the normal application process for registered trade marks and registered designs in the UK.

Was that even worth saying?

This means that for a period of 9 months from exit, the government will recognise filing dates and claims to earlier priority and UK seniority recorded on the corresponding EU application. Right holders taking this step will need to meet the cost of refiling the application in accordance with the UK application fee structure.

 Does this actually follow? I would have thought that if the normal application process were followed there would be a 12-month priority period, although seniority (being a pecularily EU thing) is a different matter. Anyway, this "special priority period" could be useful for applications for EU rights outstanding on the key date (29 March 2019 or such other date as might emerge) because it could enable an applicant whose EU application is opposed to salvage UK protection while retaining the priority date.

These same provisions will apply to international registrations designating the EU filed with the World Intellectual Property Organisation. This ensures that there is continued protection in the UK from March 2019 onwards for trade marks and registered designs (filed through the Madrid and Hague Systems, and designating the EU as the area where they apply).

That seems reasonable, if "reasonable" is a word that can be used in connection with any of this.

Two other points are worth mentioning: first, without an agreement to govern withdrawal the rights of UK lawyers to represent clients before the EUIPO will be in the gift of the European Union rather than based on a sound legal right; and second, EU TM owners might need to find themselves an address for service in the "residual" EU after the UK leaves. More headaches for small businesses.

You might find it useful to listen to this presentation which I published a while ago on the IPso Jure YouTube channel, although it is now to be treated with care!