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A Brand New You in the EU

Tue 05, 01 2021

Jeremy Morton Photo

Jeremy Morton 

Partner

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How to secure, protect and defend your brand in Europe, and what’s changing in 2021

Among the new opportunities and challenges coming up in 2021, the UK will emerge from the Brexit transition period ending on 31 December 2020, resulting in a raft of legal changes. There will be many action points that businesses around the world will already be focused on. Have you included a review of your brand protection?

This article will explain the different ways to protect brands in Europe as part of your international brand strategy, including what you need to do in light of Brexit and why.

Why Register Trade Marks?

The advantages of registered brand protection include:

  • Easier enforcement against infringers;
  • Block competitors from registering your brand; and
  • Create a valuable, easily transferable asset.

A registration gives you protection even before you have used the brand. This is essential when launching a start-up or new product. Whilst it is true that ‘unfair competition’ laws also protect unregistered brands against copycats, this usually only applies if you can prove substantial use of your brand over an extensive period. Even if you can, the legal costs involved in proving it through evidence to the required standard will often be high – usually far more than the cost of securing and maintaining a more easily enforceable trade mark registration.

With physical goods, registered rights can also be notified to Customs authorities, to block counterfeits at the border cost-effectively. Unregistered brands cannot be relied upon for Customs detentions.

Investment in trade mark protection is not just for multinationals. According to the EU Intellectual Property Office ‘SME Scoreboard’ Report 2019, commissioned from KPMG, 54% of SME owners of registered IP “claimed a positive impact. The main impacts identified were an increase in reputation (52 %), turnover (39 %) and ability to access new markets (37 %)”. SMEs rated trade marks as by far the most important right, the report noting that “the main reasons that IPR-owning SMEs gave for registering IPRs were to prevent copying (59 %), to increase legal certainty (58 %) and to improve the image and value of the company (36 %)”.

Whatever the size of your business, best practice involves integrating IP policy into research, product development and marketing. This includes your trade marks, beginning with brand clearance, through to registration and enforcement. Bear in mind that trade marks can include not only names and logos, but also shapes, colours, sounds and more.

Trade Mark Basics in Europe

A mark must be capable of distinguishing one trader’s products from another, so a purely descriptive term is unlikely to be accepted, unless there is a distinctive design element. For example, ‘FASTLINK’ for computer software and telecommunication services is likely to be rejected.

Your application must list your chosen goods or services, divided into different ‘classes’ according to an international convention. Drafting the list involves careful judgment. A broad list will be more powerful against infringers. But if you don’t use it for a period of five years, the registration risks invalidity. Recent litigation involving Sky Plc has also determined that overly broad lists of goods or services could be attacked on grounds of ‘bad faith’.

In a recent major European dispute, which is currently under appeal, Sky sued over the defendant’s use of the mark ‘SkyKick’ for cloud migration services. In response, the defendant challenged Sky’s registration for broad terms such as ‘computer software’ and ‘telecommunications’, on grounds of bad faith. The English Court of Appeal agreed that Sky had pursued “a deliberate strategy of seeking very broad protection of the Trade Marks regardless of whether it was commercially justified. Sky thus applied for the Trade Marks with the intention of obtaining an exclusive right for purposes other than those falling within the functions of a trade mark, namely purely as a legal weapon against third parties…”. It was found that Sky did not genuinely intend to use the mark for every type of ‘computer software’ in general, and the court limited the scope of registration to specific kinds of software for specific purposes.

Once you have identified an appropriate brand and the goods or services that you want the registration to cover, it may be sensible to carry out some preliminary clearance searches. These can identify obvious barrier marks already on the register. More extensive searches can also identify unregistered trade marks that could be an obstacle based on use.

Routes to Protection

Trade marks are registered territory-by-territory, and the costs, timescales and procedures differ accordingly. For example, the USPTO is notoriously picky about the description of goods and services, and the Canadian registry is terribly slow. Usually a business will apply first in its home country, followed by international filings in key markets. China is also often included so as to reduce the risk of brand appropriation there. If international applications are filed within six months, they can claim the earlier filing date of the ‘home’ application, giving them priority over applications filed in the interim. Where appropriate, a single international application process can be used so as to reduce initial costs, compared to filing in each country separately.

The UK procedure is among the quickest and lowest cost routes to registration. Current registry fees are just £170 to register in one class of goods, plus the attorney’s fees to draft, file and manage the application. The registration must be renewed every 10 years.

Whilst it is also possible to file nationally in any European country, most international businesses opt for the single, EU-wide registration, which until the end of 2020 includes the UK. From January 2021 onwards, however, EU registrations will no longer cover the UK.

Brand New in 2021

The consequences of Brexit for European trade marks are set out in the Withdrawal Agreement, and take effect from January 2021. Briefly:

  • EU trade marks will no longer provide any protection in the UK or provide a basis for objecting to a UK trade mark application, and UK marks will no longer provide a basis for objection to an EU trade mark application;
  •  However, the UK registry will automatically issue a UK equivalent registration in respect of any currently registered EU trade mark;
  • Even if that mark has never been used in the UK, it cannot be attacked on grounds of non-use for five years, as long as it has been used in the EU;
  • Owners of currently pending applications for EU trade marks will have nine months to file a new UK application, which will benefit from the same filing date.

In addition, professional representatives for EU marks must now be based in the EU, and similarly the UK registry is likely to require owners to give a UK address for service.

If you currently own trade marks in Europe, these changes mean that you may need to take action. That action includes considering whether you have EU-based attorneys for your EU marks and UK-based representatives for your UK marks, where necessary.

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