Brexit: the three potential scenarios

On October 31, 2019, Brexit was expected to reach its final conclusion. However, at the last minute, the United Kingdom and the European Union, because of a lack of agreement, decided to extend the negotiation period to  January 31, 2020. If negotiations are once again postponed, the scenarios remain unchanged for the Brexit and its consequences on trademark law.   For the moment, three scenarios are to be considered

 

 

  1. The statu quo scenario

This is the case where no agreement is reached and yet another extension is approved between the United Kingdom and the European Union.

During this new period of negotiations, the United Kingdom would still be a member of the European Union and would participate in the EUIPO system, without any direct impact on trademark rights.   On the United Kingdom side, further early parliamentary elections will be held on December 12, 2019. The election result will obviously have an influence on the follow-up to the negotiations and the political approach that the United Kingdom will take.

 

 

  1. Divorce with consent scenario

In the eventuality that the United Kingdom and the European Union finally find an agreement, a transition period will be initiated.

The European Union and the United Kingdom have agreed in principle that there should be a transitional regime until the end of 2020, during which the Union law will continue to apply to the United Kingdom.

Depending on the circumstances, it is not certain that the transitional regime will enter into force. It shall depend on the terms of the agreement.

The European Union trademark will continue to be effective in the United Kingdom. during this time-period. Subsequently, the two systems will move from “cohabitation” to two separate systems.

 

  1. The Hard-Brexit scenario

Such a scenario concerns the case where, despite the negotiations, no agreement is reached before January 2020 and no extension is granted.    This hypothesis is the least likely, indeed, the United Kingdom would leave the EUIPO system almost immediately without a transition period. However, the UKIPO (the UK Intellectual Property Office) has provided a guidebook of how EUTMs will be treated even in the event of a No Deal exit. It states that on exit day a comparable United Kingdom trade mark right will be created for each existing European Union trademark registration existing on exit day, without additional fees.

The owner of the European Union trademark will therefore have two rights, one European Union trademark and a comparable United Kingdom trade mark right.

Pending European Union trademark applications would benefit from an opt-in system whereby, for a period of 9 months, their owners would have the possibility to file a national trademark application in the United Kingdom corresponding to the EU pending trademark concerned.

These applications must relate to the same trade mark that was the subject of the EUTM application, and seek protection in respect of goods and services that are identical to, or contained within, the corresponding European Union application. They will take the filing date of the corresponding European Union application and rely on any valid claim to priority or seniority of a United Kingdom registration enjoyed by the European Union application. United Kingdom applications which seek to extend the scope of protection of the original European Union trademark will be given the actual date of filing, not the date of the prior European Union trademark.

Whichever scenario is adopted, it seems almost certain that the current European Union trademark rights will be transferred to the United Kingdom through a corresponding British trademark.

 

The right reflex:

Anticipation is the key on this issue, which is why Dreyfus maintains a daily watch on the subject and can propose strategies adapted to your commercial needs.

It is also important to carry out a portfolio audit of existing rights and to identify which rights will automatically be converted into equivalent Union Kingdom national rights and which rights will require re-filing with the UKIPO.

Depending on the current context, we advise a simultaneous registration of a national trademark in the United Kingdom for any new European Union trademark application or an international trademark application designating the European Union.

 

Dreyfus can assist you in the management of your trademarks portfolios in all countries of the world. Do not hesitate to contact us.