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Brexit and Brand Protection in Europe: What Next?

This is from long time reader, Jonathan Thurgood

Twenty-two years’ ago, the EU’s single brand registration system took off. Since then, companies and individuals around the world – from Facebook and Coca-Cola, to Mrs Miggins’ Pie Shop – have between them sought registration of a couple of million brands via the system. Beginning in 1996, for the first time in history you could own a single trade mark right that stretched from the Atlantic west coast of Ireland, to Finland’s border with Russia. As the EU expanded to take in 13 further countries between then and Croatia hopping on board in 2013, this unitary trade mark right grew to take in a market of almost 500m consumers.

These days, what a lawyer advising Europe’s highest court recommends about protecting Louboutin’s red sole trade mark makes headlines around the world.  The shoe maker even called out articles, such as one in the New York Times (amongst other more informed publications) for their “fake news” in misreporting the case.

Despite many rules of the system being drawn from continental ways of doing things, Britain and we British legal practitioners have played a big role in it. The benefits have been clear: government fees to obtain a legal monopoly across this market (which is what a trade mark registration amounts to) were reduced by 80%, give or take. Only one set of lawyers need handle the process, rather than engaging someone different in each country. Brand protection – if all went smoothly – became incredibly cheap.

This was a key aim – to give businesses large and small the certainty that, as they grew their markets from their own little corner of the continent, to the continent as a whole, they would be protected as their trade expanded.

This EU-wide system did not abolish national protection systems though: the two still sit alongside each other, and interact with each other at various points.

In many ways, the EU system has been good, at least to judge from the high level stats churned out by the Office running the show. However, delve deeper, and you might not call it exactly great.

First, what many businesses do not understand is that getting EU-wide brand protection does not necessarily mean you can just roll out your business from Wexford to Warsaw without legal problems. Getting an EU brand registration is not a “get out of jail free” card if you run up against someone with earlier rights that you are accused of infringing. Also, all EU countries have continued to operate their own laws on unfair competition (which involve unregistered rights) without the EU harmonising them. You might therefore find yourself accused of passing off your goods as those of someone else, and forced to pay costs to the other side and rebrand, even if you had first equipped yourself with an EU trade mark before starting your business.

Further, the English language which we Brits have taken to the four corners of the globe, has been a double-edged sword on the continent. Whilst we British lawyers have been popular with businesses worldwide in representing them in the registration process, and in any ensuing disputes, many of the officials who work at the (air conditioned) coalface in the EU’s office on the Spanish coast have proved less adept at understanding whether a name made up of one or more English words is sufficiently “distinctive” to be registered under the EU system. For all their cleverness, there is nothing like being brought up speaking a language from birth to understand its subtleties and nuances. It is this deep understanding of language that enables us to know whether a name is really how we would fairly describe something, or whether our chosen brand is just unusual or inventive enough to distinguish our products or services from anyone else’s.

Then there has been the EU’s Court of Justice, which is staffed mostly by non-experts in this field, and which for many years has churned out decisions that do not always make a lot of sense, or even answer the question at all.

The system is also accused of being anticompetitive. A Greek olive grower selling only to his home market, or to just over the border as well, can obtain rights indefinitely that could be used against the unwitting trader in Aberdeen or Aarhus who happens upon something similar for their own local specialities. On top of this, whereas British law has always required businesses to declare an honest intention of using the monopoly right they are claiming, the EU asks no such questions.

What happens when we Brexit?

In this small sinew of commercial law, as in the wider body, Britain has been stitched slowly but surely to the European body over the past 45 years. Cut the links too quickly, and the English Patient (ok, the British one) risks just bleeding out. So what is the surgeon going to do?

No one quite knows, but time is running out to make some important business decisions. Will EU trade marks get converted into U.K. ones? We all expect so, but Parliament must get a shimmy on if it is going to authorise that, and set out the rules for the process. Will Britain be free to tweak its laws, to provide some more sensible answers to questions where the EU may have got it wrong? Hopefully – but politicians and the courts may not want to rock the boat in the early years after the split. Will lawsuits about EU trade marks, started in the U.K. courts, have to be restarted on the continent? That’s anyone’s guess. Will European lawyers, taking advantage of EU laws on the freedom to provide legal services in the U.K. (at the expense of British practitioners) be allowed to keep doing so? And will Brits operating before the EU’s Office be allowed to continue?

These are questions that will happily pass most people by. As will questions about how all of the other parts of the body will be detached from the European one. We at this site tend to think that overall Brexit is a good move for Britain – and probably the world. However, it’s far from plain sailing: there will be plenty of choppy water over the next 12 months on both sides of the Channel.

Jonathan Thurgood

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6 years ago

As always, we have precedent for this: Southern Ireland leaving the British Union. What happened to court cases that started before IreExit? What happened to lawyer’s qualifications? Could a pre-IreExit KC who trained in Belfast and practised in Dublin continue working in Dublin? etc.

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