All change! No extension means major changes for IP rights holders from 1 January 2021

Under Article 132 of the Withdrawal Agreement, 30 June 2020 was the last day that the UK could have requested an extension to the Brexit transition period. The COVID-19 outbreak prompted many to speculate that a request would be made but the deadline passed, without event.

The effect of this is that from 1 January 2021, EU Trade Marks, registered and unregistered Community designs and international registrations designating the EU will cease to provide protection in the UK. There will likewise be implications for EU copyright law. 

In the past two weeks, the European Commission has issued two "Notices to Stakeholders" (i.e. rights owners) – one on 18 June 2020 and another on 23 June 2020. The Notices summarise the impending changes to various EU intellectual property rights, in light of Brexit. Whilst we have known about most of the changes for some time, others are new and with the transition period now definitively set to expire on 31 December 2020, an overview of the forthcoming changes seems timely.

EU Trade Marks (EUTMs) and Registered Community Designs (RCDs)

• Conversion of registrations: On 1 January 2021, the UK Intellectual Property Office (UKIPO) will automatically convert EUTM and RCD registrations into equivalent, but entirely independent, UK "re-registered" rights, without examination. Conversion will also take place for international registrations that designate the EU. 
• Conversion and renewal fees: No costs will be payable to the UKIPO for the conversion of existing registrations. However, once converted, UK and EU registrations will need to be renewed individually, with separate renewal fees payable to each of the UKIPO and EUIPO. At present, both UK trade marks and EUTMs must be renewed every 10 years. 
• Dates: "Re-registered" design rights will retain their RCD registration, application and renewal dates and will inherit any priority dates. "Re-registered" trade marks will likewise retain their EUTM filing and priority dates.
• Pending applications: There will be no automatic conversion of EUTM applications that remain pending on 1 January 2021. If protection is required in the UK, Applicants will need to file a separate application for an equivalent UK right. Applicants will have 9 months to do so (i.e. until 30 September 2021) and an additional filing fee will be payable to the UKIPO.
• Registrations approaching expiration: An equivalent UK right will be noted on the UK register for RCDs and EUTMs that are due to expire between 1 July 2020 and 31 December 2020. These rights will be assigned an "expired" status by the UKIPO and their continuation will be dependent on the late renewal of the corresponding RCD or EUTM, within 6 months. No costs will be payable in connection with the re-registration of "expired" rights but if no action is taken, they will be removed from the UK register.  
• Cancellation proceedings: Where an EUTM or RCD is subsequently declared invalid, revoked or cancelled as a result of proceedings that were ongoing on 31 December 2020, the corresponding "re-registered" right will also be declared invalid, revoked or cancelled, by the UKIPO.

EUTMs only

• Use: After the transition period, the use of a "re-registered" trade mark, in the UK, will no longer constitute genuine use in the EU. This could be problematic for EUTMs that are predominately (but not exclusively) used in the UK and will leave any such EUTMs, which have been registered for more than 5 years, vulnerable to revocation for non-use.  
• Non-use: "Re-registered" trade marks will not be liable to revocation on grounds that the corresponding EUTM was not used in the UK before the end of the transition period. As "Re-registered" rights will assume the filing dates of the EUTMs that they will derive from, this should allay concerns about UK marks that will technically be more than 5 years old, when they are created.
• Seniority: Once the transition period has expired, all existing seniority claims in EUTMs that are based on UK national trade marks will cease to have effect in the EU.
• Ownership: A slightly unusual change, which was announced in the 18 June "Notice to Stakeholders" is that after the transition period, the ownership of EUTMs (as objects of property) by UK based entities and individuals will be regulated by Spanish law, unless the proprietor has a "real and effective establishment in an EU Member State". If they do, the law of the member state where the proprietor is established will apply. Brand owners should consider the Spanish and/or local law implications of this, before the transition period expires.  

Unregistered Community Designs (UCDs)

• Continuance: UCDs which arise before the end of the transition period will continue to be protected in the UK, for the remainder of their three-year terms. 

Copyright and database rights 

Both the UK and the EU are contracting parties to various multilateral international copyright agreements and the UK's exit from the EU will have no bearing on this. It will mean however that certain protections, which are specifically afforded to member states, under EU law, will no longer apply to the UK. This impacts:

• Sui generis database rights (SGDRs) – UK based owners of databases created on or after 1 January 2021, will no longer be entitled to receive a SGDR for EU databases. A reciprocal principle will apply to EU based owners of UK databases. Under the Withdrawal Agreement, databases that are already in existence, when the transition period expires, will maintain protection in the UK or EU (as applicable) for the rest of their duration. 
• Broadcasting: After the transition period expires, the protections afforded by the Satellite and Cable Directive will no longer apply to UK broadcasters. At present, the Directive localises copyright clearance so that it need only be obtained in the member state where the signal is introduced. From 1 January 2021, UK broadcasters will have to obtain clearance in all member states where the signal is received, making the process significantly more onerous.
• Digital content subscriptions: The Portability Regulation will no longer apply, meaning that UK residents will cease to benefit from their digital content subscriptions when they are in the EU. Where UK providers of online content wish to offer their services to subscribers in the EU, they will need to comply with local laws, including clearing all relevant rights.
• Orphan Works: The UK and EU will no longer practice mutual recognition of orphan works. This could mean that infringement arises regarding works that were previously lawfully available online and could present particular problems, for cultural institutions.

Action points

At present, intellectual property law is (largely) harmonised across the EU. After Brexit, it seems inevitable that the two regimes will diverge, perhaps significantly. Between now and 1 January 2021, it is therefore crucial that brand owners identify how their IP portfolios will be affected by the changes and determine whether preparatory action is required, to maintain maximum protection. This may include: 

1.Ensuring any RCD and/or EUTM applications that could still be pending on 1 January 2021 have been identified – the UKIPO will only convert existing registrations and action will be required to secure UK protection for pending applications;

2.Evaluating the pros and cons of applying for EUTMs and RCDs before 1 January 2021, noting that an additional fee will be payable, if the mark has not proceeded to registration by 31 December 2020; and  

3.Determining the extent to which EUTMs are currently used in member states other than the UK. Any EUTMs, which are predominately used in the UK, will be vulnerable to revocation, if or once they have been registered for more than five years. Action can be taken during the next 6 months, to protect against this.