While the European authorities have finalized the revision of the Trademark system and while there have been significant developments in the implementation of the so-called “EU Patent Package”, the United Kingdom is considering a possible British exit from the European Union by scheduling a referendum in June 2016.
If the Brexit would have no effect at all on the European patent system, which owes its name only to the patent office (the European Patent Office is not an institution of the EU), there would be serious consequences for owners of Community trademarks and designs.
The Community trademarks and designs have a unitary character and effect throughout the whole EU. Since the adoption of the Community trademark in April 1996, the European Union has expanded from 13 to 28 Member States.
If there are some provisions (1) in the Regulations on Community trademark and Community design relating to the enlargement of the Community to new Member States (2), nothing has been set in case of withdrawal of one or more Member States, neither in the current law, nor in the upcoming Regulation on European Union trade mark (3).
If the UK were to leave the EU, one can hope that a conversion mechanism would be established between the OHIM and the British Office (IPO), allowing either automatically or at the request of IP right owners, maybe even against payment of a fee, to convert Community trademarks/designs into UK National trademarks/designs, while benefiting from the date of the initial Community protection.
The IP rights could be preserved in this way, but their protection would be very different from the one originally sought:
- In terms of requirements of use for the maintenance of registered trademarks: National trademark owners should prove the genuine use of their trademarks in the relevant country while, given its unitary nature, the territorial borders of the Member States should be disregarded in the assessment of whether a Community trade mark has been put to “genuine use in the Community” (4);
- In terms of defence: the owners of Community trademarks/designs could apply to, before a Community trademark/design court, and obtain orders prohibiting defendants from continuing to infringe or potentially infringing Community trademarks/designs, as well as provisional and protective measures.
If the outcome of the referendum is unpredictable, there is no doubt that the Brexit would significantly increase the costs of protection, management and protection of IP rights holders.
(1) Article 165 of Regulation No. 207/2009 of 26 February 2009 On the Community trade mark and article 110 bis of Regulation No. 6/2002 of 12 December 2001 on Community design.
(2) See our previous article concerning the Enlargement of the European Union to Croatia.
(3) See our article about the Revision of the European Trade Mark system.
(4) ECJ, 19 December 2012, case C‑149/11, ONEL, Leno Merken BV v/ Hagelkruis Beheer BV. The Court ruled that: “A Community trade mark is put to ‘genuine use’ within the meaning of Article 15(1) of Regulation No 207/2009 when it is used in accordance with its essential function and for the purpose of maintaining or creating market share within the European Community for the goods or services covered by it. It is for the referring court to assess whether the conditions are met in the main proceedings, taking account of all the relevant facts and circumstances, including the characteristics of the market concerned, the nature of the goods or services protected by the trade mark and the territorial extent and the scale of the use as well as its frequency and regularity.”