High Court provides clarity for brand owners on interpreting Brexit-related legislation

The High Court's decision in Easygroup Ltd v Beauty Perfectionists Ltd & Ors clears up one of the ambiguous areas of Brexit – whether the UK courts would be able to grant pan-EU injunctions after Brexit in EU trade mark (EUTM) infringement proceedings that commenced before the end the Brexit transition period.

While this decision only affects a small number of cases that are still live and were pending before 11pm on 31 December 2020, it gives important findings concerning the interpretation of Brexit trade mark statutory instrument and its accompanying Explanatory Memorandum, the Withdrawal Agreement and its implementing statutes, and guidance given by the UK Intellectual Property Office (UKIPO).

Pre-Exit Day action 

Prior to the end of the transition period, Easygroup sued Beauty Perfectionists and others in the UK High Court (acting as an EUTM court) for its use of "easyCOSMETICS" and sought a pan-EU injunction with respect to alleged infringement of its EUTMs.

The relevant question for the court was whether it is only capable of granting relief within the UK, even where proceedings were commenced when the court had jurisdiction to grant pan-EU injunctions.  Under consideration was the relevant Brexit statutory instrument, the Trade Marks Amendment etc (EU Exit) Regulations 2019 (the 2019 Regulations).

The parties' positions

The defendants argued that the effect of the 2019 Regulations was that, as of Exit Day on 31 December 2020, the English courts were no longer an EUTM court and the EU Trade Mark Regulation was not part of retained EU law under the EU (Withdrawal) Act 2018.

The thrust of the defendants' argument hinged on the interpretation of the 2019 Regulations, which deals with existing EUTMs and pending proceedings. The defendants maintained that the 2019 Regulations were drafted at a time when it was anticipated that the UK would leave the EU on a "no deal" basis and, as such, it would have made no sense for it to provide for extra-territorial jurisdiction in those circumstances, even for pending proceedings.

Among other things, the claimant argued that although the 2019 Regulations were made in 2019, they did not come into effect until the end of the transition period on 31 December 2020. As such, they should be construed by reference to the Withdrawal Agreement, which came into force on 31 January 2020.
Additionally, it said that the fact that the UKIPO website has been updated to reflect the correct construction of the 2019 Regulations gave weight to its submissions.

Statutory interpretation

The judge emphasised that the Withdrawal Agreement preserved the provisions of the EUTM Regulation relating to jurisdiction for pending proceedings and those provisions were given domestic legal effect by the UK's 2018 and 2020 EU Withdrawal Acts. As such, those provisions are recognised and available in UK domestic law and enforced and allowed accordingly.

Jurisdiction finding

On the basis that the High Court remains an EUTM court for the purposes of pending proceedings, the judge held that the clear intention of the Withdrawal Agreement was that the High Court retains the same jurisdiction under the EUTM Regulation, including the jurisdiction to grant a pan-EU injunction, as it had before the end of the transition period.

The judge conceded that the relevant part of the 2019 Regulations was "not a model of clear drafting" but the court's retained jurisdiction in pending proceedings is not limited by any Brexit related rule or law.

As for the defendants' reliance on the Explanatory Memorandum accompanying the 2019 Regulations, the judge noted the existing legal position that Explanatory Notes or Memorandum can be used as an aid to construction so far as they "cast light on the objective setting or contextual scene of the statute, and the mischief it was aimed at".

In light of this, the judge held that the Explanatory Memorandum was written at a time when a no-deal Brexit was a real possibility, whereas the 2019 Regulations did not come into force until the end of the transition period, by which time the Withdrawal Agreement and its implementing statutes were in force.

The Explanatory Memorandum failed to take account of this changed context. To the extent that the Explanatory Memorandum stated that the jurisdiction of the court is limited, the judge concluded that "it is simply wrong and should be disregarded" and should be "approached with caution".

The judge ultimately confirmed that the court retains its jurisdiction to grant a pan-EU injunction in these proceedings, which were pending prior to the end of the transition period. 

Osborne Clarke comment

Although this judgment will only have a practical impact for a small number of trade mark cases, it nonetheless clears up an area of ambiguity that remained in the wake of Brexit and will undoubtedly be welcome news for those with ongoing proceedings that were pending prior to the end of the transition period.

Of broader relevance, the decision usefully gave guidance on the interpretation of the Brexit-related legislation, namely:

• the judge found that the Withdrawal Agreement was implemented into domestic law by virtue of the EU (Withdrawal) Act 2018 and the EU (Withdrawal Agreement) Act 2020, meaning that it has direct legislative effect;
• confirming the role Explanatory Memorandum can play in construing the related statute and  emphasising that taking into account the context surrounding the implementation of the statute in question is essential. This context can include consideration of conflicting government guidance, here the UKIPO's guidance. Indeed, in this case such conflict was found to cause the Explanatory Memorandum to be at least treated cautiously.

While the decision positively clarifies one area of Brexit uncertainty, it should also be noted that the defendants were granted permission to appeal and, therefore, it remains to be seen whether the judge's findings will be upheld on appeal.