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Franchising, Brexit and Trade Marks – what now?

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United Kingdom

With effect from 31 January 2020, the UK has left the EU under the terms of the now ratified UK-EU Withdrawal Agreement.

The UK Intellectual Property Office (IPO) has published a short and reassuring update about what happens to intellectual property (IP) rights during the transition period.

The transition period will end on 31 December 2020. During this period the IPO has assured us it will be "business as usual" with the IP system in the UK continuing as it is without disruption or changes. The IPO will convert almost 1.4 million EU trade marks (EUTMs) to UK trade marks (UKTMs) at the end of the transition period. These will come into effect on 1 January 2021.
 
Below are some key points to note for franchisors:
  1. For franchisors who operate in the UK but who have a registered EUTM but no UKTM, the good news is that there is nothing to do during the transition period. They will automatically receive a UK trade mark on 1 January 2021, and the EUTM will continue to be valid. 
  2. For franchisors who operate in the UK but who have a pending application for a EUTM in process on 31 December 2020, they will have nine months to apply for the same protection in the UK. There will be no automatic conversion of that EUTM, once registered, into a UKTM. Action will be required. 
  3. For franchisors whose only operation is in the UK, but who have a EUTM, after 1 January 2021 the EUTM will become susceptible a challenge for non-use if the franchisor does not sell or market its products and services in the European Union. A good reason to look at expansion plans. 
  4. For franchisors whose IP rights have been exhausted (i.e. when an IP-protected good is placed on the market anywhere in the EEA, by or with the franchisor's permission, so that the franchisor may not prevent the movement of those goods within the EEA) in the EU and the UK before the end of the transition period shall remain exhausted in both areas. 
  5. Finally, an important point on managing your trade mark portfolio. From 1 January 2021, it will be necessary to have a EU-registered representative to manage your EUTMs.
If a franchisor with UKTMs and EUTMs currently uses a UK-only representative, from 1 January 2021 that representative's account with the EUIPO will be frozen and they will not be able to represent the franchisor in respect of the EUTM. One solution is to have different representatives, or have your principal representative appoint a sub-representative in the relevant market. However, by far the most practical solution is to have a representative which has a direct presence in both the UK and the EU as it stands on 1 January 2021.
 
The good news here is that Fieldfisher already represents clients in this way!
 
Comment
 
Whilst this blog is only referencing trade marks, the IPO's note also looks at registered designs and considers the position of all other IP rights including unregistered designs, patents, Supplementary Protection Certificates and copyright.

This latest publication from the IPO does not change what we previously understood to be the situation if the UK departed from the EU with a deal, but is helpful nevertheless as confirmation of the position and the timetable ahead.