Last year, there were some major developments in Europe and Cuba that are causing massive changes in businesses of those countries. So, what exactly does Brexit mean for U.S. rights holders? What should companies be doing to protect their brands in Europe? And, how should U.S. trademark holders protect their marks in the changing Cuban economy?
These are all questions Inside Counsel asked Sally Shorthose, partner at Bird & Bird in the UK, in a recent interview. Shorthose frequently advises clients on regulatory and ‘freedom to operate’ matters, and manages due diligence matters. As a transactional IP lawyer, she provides advice in relation to the protection and exploitation of a range of IP rights, in standalone transactions and as part of an acquisition, divestment or investment activity.
Shorthouse does not think Brexit will affect a company wishing to expand into Cuba, whether from a trade mark viewpoint or otherwise. “It is very much a European issue,” she said.
“The result of the referendum where the UK voted to leave the EU was both unexpected and unprepared for.” She explained. “There were no contingency plans at all, so in two years the UK and the EU have developed the terms of the divorce and new trading relationships – the remaining EU Member States say that the former must take place before the latter, leaving the time to negotiate such seismic issues extremely tight.”
So, the UK must replicate the thousands of pieces of legislation from its membership of the EU. Their plan is to do this with the "Great Repeal Bill" where all EU derived legislation will be replicated verbatim into UK legislation, pending revision or revocation. “This is a very blunt instrument to deal with a huge and complicated body of jurisprudence, and some doubt the legitimacy of this approach,” said Shorthose.
“Companies are concerned about the uncertainty for the future, about the status of their EU but non-UK employees, that no trade deal will be completed and the UK will revert to WTO rules, and the lack of clarity regarding the future of certain regulated industries, such as life sciences, telecoms, aviation and so on,” she explained.
For trademark holders, they should seek UK trade mark registrations as their EUTMs will not necessarily be valid in the UK post-Brexit, although see below for another view. It looks as though the UK will become a member of the UPC, so patent holders will not be affected more in UK than elsewhere.
So, what should companies be doing now to protect their brands in Europe?
“Our advice is to seek UK trade mark protection,” Shorthose explained. “Until the UK leaves the EU, existing EUTMs will remain fully effective and enforceable, but once Brexit occurs, existing EUTMs will no longer provide coverage in the UK. In the meantime, EUTMs will continue to cover the UK.”
Even though the position is unclear right now, one view is that legislation will be introduced to ensure that such rights continue to have effect in the UK, for example, by converting existing EUTM rights to UK national rights, having the same priority or filing dates.
Shorthose added,” It should be noted, however, that where use of an EUTM takes place only, or mostly, in the UK, such use is unlikely to support a EUTM against potential revocation in the longer term. Strategic further registrations may be advisable to provide protection.”
In terms of filing new trade marks, she recommends filing both a EUTM application along with a separate UK national application to secure more certainty in relation to long-term protection in the UK, and may also avoid the need to convert EUTMs in due course.