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The unprecedented challenges posted by the COVID-19 pandemic forced many companies and their in-house legal teams to temporarily shelve their Brexit preparations in order to deal with the immediate threats posed by the pandemic. While COVID-19 remains an ongoing and serious concern for US operations, companies that also do business in the UK also need to put Brexit planning for their trademark portfolio back on the agenda. Having declined to request a further extension, the UK is set to exit the European Union on Dec. 31. Businesses need to prepare now in order to protect their trademarks in an uncertain global market.

US Businesses Say They Aren’t Ready for Brexit

  • 82 percent of ACC in-house counsel surveyed say they know Brexit will create trademark protection changes, but they haven’t implemented a response plan.
  • COVID-19 upheaval cited as key reason for Brexit preparation delay.
  • Potential loss of UK trademark rights seen as primary concern.

UK Offering Assurances of Trademark Protection Post-Brexit

  • The UK has announced it will unilaterally provide for continued protection in the UK of local rights previously protected under an EU trademark. 
  • This will be done by granting – automatically and free of charge – a new comparable UK trademark right after the end of the transitional period. 
  • EU trademark registration will continue to protect their mark in the remaining 27 member states.

Can Trademark “Squatters” Swipe IP Rights in Brexit Transition?

  • EU trademark rights applicants (where the right has not achieved registration by the end of the Brexit transition) will have a nine-month priority period to file in the UK. 
  • This gives legitimate right-holders a longer period than usual to prevent squatters from registering conflicting rights in the UK.
  • However, there is the additional cost of applying for a separate UK trademark.

How will Brexit Impact International Exhaustion? 

  • The issue of exhaustion is still on the negotiating table. 
  • Only agreed point is that rights which are exhausted as at the end of the transitional period – i.e. rights protecting goods already in circulation in the European Economic Area (EEA) as at that date – will remain exhausted. 
  • Still undecided: Exhaustion of rights protecting goods that enter into UK or EU circulation after the end of the transitional period.
  • UK may adopt a more open, pro-trade position versus the regional exhaustion (i.e. free movement of goods legitimately placed on the market in the EEA only) in which the EU currently operates.

Brexit and Beyond: Poll Results

At the ACC Greater Philadelphia 12th Annual In-House Counsel Conference, attendees of Womble Bond Dickinson’s panel presentation provided the following responses to polling questions posed throughout the discussion.

How well-informed do you feel about Brexit and trademarks?
I have read all the guidance and know it all 0%
I have seen some guidance, and made some plans 6%
I am aware of changes, but not made plans 82%
Brexit will make no difference 6%
What is Brexit? 6%

What is your biggest Brexit concern for trademarks?
Losing registered protection in the UK 50%
Increased expense 10%
More administration and management of portfolios 15%
‘Squatters’ registering in the UK 20%
Loss of rights due to non-use 0%
Enforcement in the UK 0%
Controlling parallel imports 5%

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