Post-Brexit independence of UK courts from European Union jurisdiction comes at a time when coronavirus still looms large. The pandemic has led to a surge in counterfeits as ecommerce has boomed. All these factors mean brands must rethink their intellectual property (IP) strategy.
“Certain EU rights no longer apply in the UK. Right now, businesses have to be proactive and strategic, particularly when it comes to pending trademark and design registrations. This is a golden opportunity for brands to review their protection. Action on intangible assets should be prioritised,” says Tania Clark, partner for the trademarks group at Withers & Rogers, one of Europe’s largest IP attorney firms.
On January 1, British authorities granted automatic protection in the UK for all businesses with existing EU trademark and design registrations. Those pending however have until September 30 to reapply. Failing to act could result in lapsed protection. For technological innovations protected by European patents, the picture is more straightforward, as protection will remain largely unaffected.
“Going forward, it’s possible UK courts could reach different conclusions to their European counterparts. Therefore, it may become necessary to ensure patent coverage across both territories. Regional settlements could include separate litigation in the UK and one or more EU jurisdictions. For this reason, protecting your patents in both territories could become the new norm,” says Clark, whose firm has offices across the UK, as well as in Paris and Munich.
Divergence in IP and the challenges this brings comes as brands face other pressures. The pandemic has led to a spike in online shopping. At the height of the first lockdown, ecommerce accounted for more than 32 per cent of retail sales, while pre-COVID it was below 20 per cent, according to the Office for National Statistics.
This was accompanied by a surge in fake goods in 2020, as consumers shopped more online. IP crime is believed to cost the UK economy more than £9 billion in lost revenue every year, equating to £4 billion in unpaid taxes. It also leads to the loss of around 60,000 jobs, according to the Organisation for Economic Co-operation and Development.
“Businesses in the UK need to be vigilant and agile to ensure goodwill associated with their brand isn’t eroded and revenue streams are protected. They can’t rely on EU customs to flag issues concerning counterfeit products under the EU customs notice system as it no longer applies to goods coming into the UK. Companies need to know exactly what their UK IP rights are and take out a UK application for action,” says Clark.
“Knowing what IP rights you own, and where, is fundamental to protecting brand value, particularly during times of legislative and structural change. Managing IP rights on a jurisdictional basis is crucial if you’re going to get ecommerce sites to take down products that infringe trademarks or registered designs before they damage your business. The potential for counterfeits globally, or competition via the web, has never been greater. Getting as much IP protection, in as many territories as possible, is therefore vital.”
The potential for counterfeits globally, or competition via the web, has never been greater
Brands need a more strategic and 360-degree view of IP issues, how these work for portfolios globally and in each territory, whether it be Japan, the United States, EU, UK or other jurisdictions. The protection of IP is nuanced in different languages and markets. Businesses need guidance on local IP matters and conflicts that may occur, but also advice on opportunities.
For instance, the Japan-UK trade deal is leading to a flourish of new IP rights surrounding protected geographical indications, or PGIs, for iconic British food and drink products. Think Melton Mowbray pork pies or Scottish whisky. The number of UK PGIs is increasing from seven under the outgoing EU-Japan deal to roughly seventy under the new UK-Japan agreement. A similar proliferation of PGIs could occur with other international trade agreements.
“The deal signed with Japan highlights how important PGIs could be for Britain’s food and drink industry. There could be a significant commercial benefit for UK producers that own protected food names. However, brands will need to maintain their IP assets if they’re to capitalise on the commercial opportunities unlocked by these trade deals in the future,” says Clark.
The UK now has distinct registers for PGIs and protected designations of origin (PDOs). All existing PGIs and PDOs have been automatically transferred to the new UK equivalent registers. However, brand owners must now apply to the EU registers to maintain protection in the EU, similar to the situation with trademarks.
“Any new UK PGIs will also have to be registered with the EU from this January. There will be nothing automatic about the process when seeking this type of IP protection,” says Clark, who is the immediate past-president of the Chartered Institute of Trade Mark Attorneys.
Certainly, the changes in 2021 are seismic, representing a rare opportunity for businesses to review IP strategies more widely. Trademark and design portfolios will increase in size. Many licences with Europe will need to be renewed and distribution agreements reviewed.
“Businesses will need to appreciate where they are going in the future. They will need a holistic and global approach. At the same time, they will have to understand how all these specific changes will affect them,” Clark concludes.
“Brands will need to redouble their efforts if they want to continue to trade at home in the UK and in Europe. There is also potential in new markets. The commercial value of IP cannot be overstressed and should be a real driver of business decisions. Getting the best advice and finding the right IP partner with a foothold in multiple markets is crucial.”
For advice about issues affecting IP in 2021, please go to www.withersrogers.com
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