BREXIT BY DESIGN: A FASHION INDUSTRY CHECKLIST TO PREPARE FOR AN EU EXIT Francine Cunningham, Senior Public Affairs Manager, Bird & Bird (Brussels)
British fashion not only makes a vital contribution to the UK economy, but is such a strong part of the country's appeal as a world-leading hub of innovation and creativity. Joseph Nye of Harvard University, who famously coined the phrase "soft power", noted that the best propaganda is not propaganda. Well, just maybe, the best propaganda is a one-off handbag and a killer pair of heels...
So what should the British fashion business be doing to ensure that the industry retains both its economic clout and "soft power" in the wake of Brexit? Firstly, if you haven't started preparing for Brexit, this issue needs to move to the top of your agenda right now.
As everyone in this industry also knows, there is a fast turnaround between resort, cruise or pre-Spring period and the moment that we hit Spring/Summer 2019. It is clear that there is a short window left to prepare for 29th March 2019, the date when the UK is due to leave the EU. Whether you represent a luxury international brand, or work as a freelance creative, you will have to consider carefully the impact of Brexit on brands and designs.
So let's briefly run through the possible scenarios.
In the event of a "No Deal" Brexit, for each EU Trademark and Community Registered Design there will be an automatic creation of a UK "equivalent" Trade Mark or Design. This 'national right' would have the same priority and filing date as the original.
The UK Government's technical notes from 24 September 2018 outlined that for each EU Trade Mark or Community Registered Design application pending at the date of Brexit, there will be a nine-month grace period to file a UK "equivalent" trade mark or design application, claiming the same filing date as the original application. Don’t forget, however, that you will need to pay a UK filing fee to do this.
And what will Brexit mean for the exhaustion of intellectual property (IP) rights? The UK Government's guidance from September states that "the UK will continue to recognise the EEA regional exhaustion regime from exit day, to provide continuity in the immediate term for businesses and consumers."
Furthermore, the guidance underlines: "While there will be no change for the importation of goods into the UK, there may however be restrictions on the parallel import of goods from the UK to the EEA". So businesses may need to check with EU right holders to see if permission is needed.
If there is "no deal", in other words no Withdrawal Agreement can be finalised before 29 March 2018 the changes will happen overnight, so you need to be prepared.
However if a draft Withdrawal Agreement is agreed both by the UK Government and the EU (and approved by the UK Parliament and EU members States), there will be a potential transitional period from 29 March 2019 until 31 December 2020. Depending on the outcome of political discussions, it could be significantly longer.
Under the Withdrawal Agreement, EU law would remain applicable to the UK during this transitional period. The UK would also remain in the Single Market and Customs Union during this time.
After the end of the transitional period - 31 December 2020 - as with a no deal - there would be an automatic "equivalent" UK Trade Market or Design Right, granted for existing registered EU Trade Marks and Community Registered Designs. Plus for existing EU trade Marks and Community Registered Designs applications there would be a nine-month period to apply for UK "equivalent" national registration.
It is important to note that under the Withdrawal Agreement the new 'equivalent' UK Trade Marks could not immediately be revoked for 5 years of non-use because of lack of use in the UK. Use in the European Union pre-Brexit will count as use of the 'equivalent' UK Trade Mark. EU pending cancellation actions would also affect 'equivalent' UK Trade Mark or Design registrations post-Transitional period, unless the grounds for invalidity or revocations do not apply in the UK.
With regard to registered rights, you cannot follow the same route as with trade marks and file a UK registered design now based on your Community registered design (CRD), to double up on your protection in advance of Brexit. (That is of course because the UK design would lack novelty).
The Regulation creates both a registered and unregistered right, both of which will fall away in the UK on Brexit. However, the UK has said that both will be converted into UK national rights.
Post-Brexit, although you can still get a registered right in the UK, you will no longer qualify for the unregistered right. This is important to the fashion industry which often relies upon this short-lived right. However, the UK still has its own unregistered design right (which is slightly different in scope) and has said that it will plug the gaps with new legislation.
To sum up, here is a quick Brexit checklist of things you need to think about now:
• Decide on your filing strategy – for new Trade Mark filings consider whether to file both UK and EU trademarks
• For proceedings in front of the EU Intellectual Property Office – review EU Trade Mark oppositions and invalidity actions based on UK rights
• When it comes to licensing – pay attention to existing Trade Mark licenses where the territory licensed is the 'European Union'
• For EU Customs Notices – review whether your Customs Notices were filed through the UK
• With respect to .eu Domain Names, note that there is a requirement for an EU address
Photographer Bill Cunningham said that "Fashion is the armour to survive the reality of everyday life." We hope that this checklist will be part of your toolkit as you face the future of British Fashion in a post-Brexit global marketplace.