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How can tech startups protect their IP post Brexit?

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Mark Blunden, partner at Boyes Turner, explores how tech firms can secure their IP once the UK exits the EU.

The countdown that began when parliament triggered Article 50 has ushered in a period of uncertainty for UK tech firms that are blithely relying on EU trade marks (EUTMs) to protect their brand.

The protection offered by EUTMs remains in place for now, but in theory this could come to an end once the UK leaves the EU – and nobody is quite sure how the new trade mark regime will work. A “wait and see” approach to the outcome of the Brexit negotiations may not be enough – firms need to pay attention now to the risk that their valuable IP may end up unprotected.

UK chancellor wants to guarantee firms’ access to funding post-Brexit

For its part, the Chartered Institute of Trade Mark Attorneys (CITMA) is optimistic that no protection will be lost for UK firms, because it believes that legislation will be put in place to enable existing EU trade marks to continue protecting British tech companies.

One scenario put forward by CITMA and others is a “UK Plus” model, where the EUTM system is no longer confined to the EU, but instead grows to cover the UK and possibly other European countries such as Norway, Switzerland and EU candidate countries.

Another scenario would see the UK allowing owners of EUTMs to convert their EU registrations into national UK registrations. Due to the uncertainty revolving around this point, many companies have already been doubling up and filing their entire EU trade mark portfolio at the UK IPO, while others have done so but just for core brands.

Steps towards certainty

Although it is currently unclear exactly what trade mark landscape will emerge as a result of the Brexit negotiations, UK tech firms can take steps now to ensure long-term brand protection.

For instance, firms should consider expanding a brand’s use beyond the UK to demonstrate clear usage elsewhere in the EU.

This will be needed because, following Brexit, the use of an EU trade mark solely in the UK may no longer be sufficient to demonstrate “genuine use“. Under the current regime, the rights of an EU trade mark holder can be revoked if a trade mark has not been put to genuine use in the EU in connection with its registered goods and/or services in the five years following its registration. The issue was highlighted by a controversial case in 2015 – Sofa Workshop Limited v Sofaworks Limited – which cast some doubt on whether use in only one EU member state is sufficient to show genuine use of an EUTM.

Tech firms should also act now over licensing arrangements covering EU-wide IP rights, if the UK is a territory of interest. Whether existing brand licences, whose territory is defined as “European Union”, will continue to cover the UK is uncertain. It would be advisable to give consideration to amending any licences where this applies, in order to clarify the position.

To summarise, we are advising our clients to file in the UK at a national level for key brands where the UK is a vital market, so that reliance is not placed on uncertain transitional arrangements for EU trade mark registrations and brand owners will not have to worry about conversion methods. This will provide more certainty in relation to long-term protection and investment can be made in a brand with greater confidence.

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