IP basics: what to think about when entering the UK and EU markets (trade marks, copyright, designs)

If you are planning to enter the UK market, formulating a strong and well thought out intellectual property (IP) strategy should be key to your planning process. It is important to consider the range of IP rights that might be available to you and how this protection will sit alongside your IP rights in other territories. It is also essential to understand the impact of the UK leaving the EU (Brexit) and how this will affect what protection is available to you and how you go about securing it.

The main IP rights in the UK are: trade marks, copyright, designs, patents, trade secrets and database rights. In this first article in our series on IP basics, we look at trade marks, copyright, and designs. Our second article will consider patents, trade secrets, and database rights.

The table below provides an overview of the rights considered in this article, what they protect, their duration, and whether registration is required to secure protection.

This article will take each right in turn and highlight some key considerations. Finally, some broader issues to be assessed before entering the UK or EU markets will also be flagged.

Trade marks – registered

Brexit

Brexit has resulted in a number of changes to the registered trade mark system in the UK and the EU. After the end of the Brexit transition period, from 1 January 2021, the UK ceased to be part of the EU-wide registered trade mark regime. As such, EU trade marks (EUTMs) no longer provide trade mark protection in the UK.

However, on 1 January 2021, the UK Intellectual Property Office (UKIPO) created a comparable UK trade mark (UKTM) for each pre-existing registered EUTM. These comparable UKTMs, therefore, provide registered trade mark protection in the UK for pre-existing registered EUTMs that previously provided that protection.

These changes to the registered trade mark system across the UK and the EU now mean that if registered trade mark protection is sought in both the UK and the EU, then two separate applications will need to be made – one to the UKIPO for a UKTM and one to the EU Intellectual Property Office (EUIPO) for an EUTM (or an international application designating both the UK and the EU).

These are now entirely separate application processes and attract different fees and costs. This should be borne in mind when determining the extent of protection needed before entering either the UK or EU markets.

Clearance searches

It is usually advisable to undertake some form of clearance searches before applying to register a trade mark, regardless of how well-established a brand is in another market or jurisdiction. This is to determine whether there are any earlier trade mark holders who might object to your registration or if there are existing trade marks that you might be infringing by using the brand you are seeking to register.

The application

Typically trade marks are words, logos or a combination of the two. However, they can also cover 3D shapes, colours, sounds, or actions. Trade marks must cover select goods or services and these must be identified in the application. Both the UKIPO and the EUIPO accept broader and less specific terms than, for example, the US Patent and Trademark Office (USPTO) In addition, unlike in the US, in the UK and the EU it is not necessary to show use of the trade mark being applied for to obtain a registration.  This means it will often be possible to obtain broader protection for your trade mark in the UK and the EU than in the US.

Not all marks can be registered – in both the UK and the EU trade marks must be distinctive for the goods and services applied for. The mark cannot be descriptive or customary for the goods or services applied for, offensive, misleading, nor look too similar to state symbols (such as flags or hallmarks).

The examiner of the application will provide an examination report, which will set out if any objections have been raised. In contrast to the USPTO, the UKIPO and the EUIPO do not consider prior registrations when examining a trade mark application. Instead, once the application has been published in the trade marks journal there is a two month window in which anyone can oppose the mark. If there are no oppositions or once any oppositions are suitably resolved, the mark will be registered.

Note that the ® symbol can only be used in the UK when a valid registered trade mark is obtained. It would be an offence to use the ® symbol on a trade mark that is not registered. The ™ symbol can be used before an application is filed or while it is pending. Registering your company's name at Companies House or owning the domain name does not give you the right to stop others using your trade mark.

Genuine use

If a registered UKTM or EUTM is not genuinely used (as opposed to token use) within five years of being entered on the trade mark registers or for a subsequent five year period, then the mark is open to a non-use cancellation action.

For UKTMs that use must be in the UK. For EUTMs that use must be in the EU, although use in only one Member State could be sufficient depending on the circumstances. With respect to cloned UKTMs post-Brexit, where the five year use period includes time before 1 January 2021, use in the EU will be considered to be genuine use. Likewise, with respect to EUTMs, use in the UK before the end of the Brexit transition period will qualify as use in the EU.

Renewals

In order to maintain trade mark protection, renewals must be made every ten years in both the UK and the EU and can be made indefinitely. Given the impact of Brexit, such renewals will now need to be made separately to the UKIPO with respect to UKTMs and to the EUIPO with respect to EUTMs.

Trade marks – unregistered

In the UK, it is possible to rely on unregistered trade mark protection to prevent someone using a similar trade mark on their goods and services (this is known as "passing off"). However, unregistered trade mark protection is not as strong as registered trade mark protection. To make out a claim for passing off, the rightsholder would have to prove that the mark in question was theirs, that they have built up goodwill associated with the mark, and that they have been harmed by someone else's use of the mark. Advice should be sought before trying to rely on unregistered trade marks. Given that unregistered trade marks are often harder to enforce, registration of trade marks is generally advised.

Unregistered trade marks are also protected within the EU but under the local laws of each member state. These vary across the EU, although many member states have unfair competition laws which play a large part in the protection of unregistered trade marks.

Copyright

Copyright protects original works by protecting against the actual copying of that work. Copyright arises automatically and does not need to be registered in the UK or the EU. Copyright subsists in a number of different forms of expression, for example – art, music, literary works, films, broadcasts, sound recordings, photographs, software, and databases.

Copyright lasts for a set period of time, the duration of which depends on the work in question. For example, for literary, dramatic, musical or artistic works, the length of protection is usually the author's life time plus a further 70 years. But, for broadcasts and sound recordings – where there is no author as such – the right will usually last for 70 years.

International conventions

There are a number of international conventions dealing with copyright. These generally provide that copyright material falling within their scope that is created by nationals or residents of one convention signatory country will automatically be protected in all signatory countries according to the national law of those countries. For example, the US similarly participates in a range of these conventions therefore copyright material falling within their scope will automatically be protected in the UK in accordance with UK law and in the EU in accordance with EU law.

However, to continue this example, there are notable differences between US, and UK and EU copyright law. For example, different approaches are taken to copyright exceptions – the concept of "fair use" is used in the US and the notion of "fair dealing" is used in the UK and EU. Advice should be sought on the difference before seeking to rely on the exception in the UK or EU.

Brexit

As yet Brexit has had a limited effect on copyright protection in the UK and the EU due to the UK's continued participation in the international copyright treaties. As such, most UK copyright will still be protected in the UK and the EU post-Brexit. Likewise, EU copyright works continue to be protected in the UK.

However, certain cross-border arrangements no longer apply to the UK post-Brexit. For example, cross-border portability of online content services, copyright clearance for satellite broadcasts, and the orphan works exception (where a work in which copyright exists but the copyright owner is unknown or cannot be located) are no longer reciprocated in the UK. Legal advice should be sought if any of these arrangements are relevant to your business.

It is worth noting that in setting its Priorities for 2022-2023, the UKIPO has stated that it wants to begin developing a new copyright strategy to keep pace with societal changes, technology, the environment, culture and the economy given the UK's ability to shape policy more directly since leaving the EU. Divergence between the UK and the EU on copyright law may be on the horizon and this is something that should be borne in mind in longer-term planning exercises.

Designs – registered

Design rights protect the overall appearance of a new product to stop others from copying it. The design must have individual character and therefore give a different overall impression to previous designs. Registered designs protect the visual appearance of a design, including the texture, colour, shape or material. They can protect 2D or 3D designs. A registered design is protected across all sectors and is not limited to the product to which it was originally applied. UK and EU registered designs can last for up to 25 years, provided that renewals are made every five years.

Brexit

Brexit resulted in a number of changes to registered design rights in the UK and the EU. As at the end of the Brexit transition period on 1 January 2021, registered Community designs (RCDs) are no longer valid in the UK. Existing RCDs were immediately and automatically replaced with UK registered design rights. These re-registered design rights keep their original RCD filing and priority dates, and are fully independent UK registered design rights that can be challenged, assigned, licensed or renewed separately from the original RCD.

If registered design right protection is now needed in the UK and the EU then separate applications will need to be made for an RCD in the EU and a UK registered design right in the UK. Alternatively, an international registration that designates either or both of the UK and the EU could be filed under the Hague Agreement.

Earlier in 2022, and in light of Brexit, the UKIPO held a consultation calling for views on design right protection in the UK. This consultation particularly sought views on whether the system is too complex, whether it is adaptable to new technologies, how the user-experience can be improved, and how the value of design rights can be increased and accessibility to design protection can be broadened. The review of the design law system and the production of potential draft legislation is also set out as a Priority for the UKIPO in 2022-2023. Divergence between UK and EU law on design rights might occur in the future and this should be monitored and assessed in any future planning activities.

Designs – unregistered

Unregistered design rights arise automatically and do not require registration. Brexit has brought about a number of changes to unregistered design rights (UDRs) in the UK and the EU. In the UK, the following forms of UDRs are available: i) UK unregistered design rights (UDRs); ii) UK continuing unregistered design rights (CUDs); and iii) UK supplementary unregistered design rights (SUDs). Whereas in the EU, unregistered Community designs (UCDs) are available.

UK unregistered design rights

In the UK, UDRs automatically protect the shape and configuration of 3D objects for either 10 years after it was first sold or 15 years after it was first created, whichever is earlier. UDRs protect new designs of the whole or part of an object, provided that it is not commonplace in the relevant technical field. However, there are some exceptions to UDR protection, for example, surface decoration or features that connect to or match another object are not entitled to protection. UDRs prevent unauthorised copying and, as such, are not monopoly rights. UDRs are only available to "qualifying persons", that being a resident of, or a corporate body formed and having a place of business at which substantial business activity is carried out, in the UK or a qualifying country.

UK continuing unregistered design rights

Designs that were protected as UCDs before the end of the Brexit transition period are now protected in the UK as CUDs. CUDs continue to be protected for the remainder of the three year term of protection that attached to the underlying UCD. CUDs prevent unauthorised copying and, as such, are not monopoly rights.

UK supplementary unregistered design rights

In the UK, the appearance of a product is also automatically protected for a period of three years from the date the design is made public – this is known as a SUD. SUDs can protect the 2D or 3D appearance of the whole or part of a product, which includes shape, colours, texture, materials, and ornamentation. SUDs prevent unauthorised copying and, as such, are not monopoly rights. Note that the first disclosure of a design in the EU will not establish a SUD – it could, in fact, be novelty-destroying if one seeks to establish UDR protection with respect to that design.

EU unregistered Community designs

In the EU, UCDs protect designs that are novel and possess individual character. The protected design might be the appearance of the whole or part of the product and may arise from the colours, shape, texture, material, ornamentation, lines or contours of the product. UCDs can even protect graphical symbols, for example computer icons or typeface. UCDs are protected for three years from the date on which the design was first made available to the public in the EU. Again, it is a right to prevent unauthorised copying. UCDs come into existence automatically and no registration is required.

Other issues – parallel trade and exhaustion

The European Economic Area (EEA) – which includes the EU and a few other countries but no longer the UK – only treats IP rights as being exhausted when goods are put on the market in the EEA with the consent of the rightsholder. This means that the parallel trade of third party goods into the EEA without the consent of the relevant rightsholder will often infringe IP rights. Rightsholders will typically rely on trade marks to challenge such parallel trade but the principle applies to most IP rights.

At the moment, the UK is continuing to operate a system of EEA-wide exhaustion, so rightsholders can only object to parallel trade from the EEA to the UK in limited circumstances (but can still object to parallel trade into the UK from outside the EEA. In contrast, IP rights in goods placed on the UK market by, or with the consent of, the rightsholder will no longer be considered exhausted in the EEA and rightsholders will often be able to object to parallel trade from the UK to the EEA.

Managing your IP on entering the UK or EU market(s)

Audit

It is advisable to carry out regular IP audits to understand your IP position and how it aligns with your overall strategy. Audits can help to identify any areas that could be bolstered by additional IP protection and potential opportunities to commercialise your IP.

Commercialisation and transfer

IP rights are valuable assets. They can be used to attract investment, they can be sold if they are no longer needed, or they can be licensed to provide an active revenue stream. Certain legal formalities are required with respect to some of these activities for some IP rights. Legal advice should be obtained on how best to commercialise and/or transfer of your IP assets, ensuring that you comply with the necessary formalities.

You might also want to enter into joint ventures or collaboration agreements. If so, the IP implications of these agreements should be considered in advance.

Enforcement

Should the need arise, you might wish to enforce your IP against others. Again, a well-conceived enforcement strategy should be devised before embarking on enforcement action.

Please reach out to your usual Osborne Clarke contacts or one of our contacts below to discuss how we might be able to assist you.