Just as no one knows what will happen if the UK votes to leave the European Union, so no one knows what the implications would be for the owners of European trade marks.
When the European trade mark came into existence in the 1990s, the law implementing it set out clearly what would happen as new countries joined the EU. It was, however, apparently inconceivable that anyone might want to leave the club, and so no provision for this was made. While a Brexit-initiated trip into the unknown potentially offers a blank sheet of paper for what comes next, the inconvenience caused by European trade mark applications and registrations ceasing to have effect in the UK may also be unavoidable.
In the event of Brexit the UK is expected to renegotiate its position with the EU. This may influence the fate of existing European trade marks, but a Brexit will not inevitably lead to the UK's exclusion from, or rejection of, the European trade mark system. European trade marks may continue to be valid in the UK - or they may not.
It would be simplest for rights holders if European trade marks continue to be valid in the UK as, at a practical level, little would change. One possibility is that the UK would continue to be part of the existing European trade mark regime, on the basis that there is no provision for automatic exclusion on exiting the EU. However, complications relating to single market principles, the probable creation of new trade barriers and a likely divergence of the UK and EU trade mark regimes (as both the UK Intellectual Property Office and the UK courts may no longer be bound by European trade mark decisions) may make the continuation of the status quo, if not quite unworkable, certainly complicated. Alternatively, the UK could decide unilaterally to continue to apply the European trade mark regulation, ie without having to apply it but opting to. This is something that has a precedent (albeit in different circumstances) in the Isle of Man, Jersey and Guernsey. But an obligation on both the UK IPO and UK courts to have to follow EU trade mark decisions could be unpopular in a post Brexit-environment.
Another possible outcome, where existing European trade marks would no longer cover the UK, would require action by rights owners to avoid the loss of rights and subsequent gaps in protection. Transitional provisions would need to be agreed that would enable the 'UK part' of an EU trade mark to be hived off into a national UK trade mark. European trade marks can already be converted into national marks, which keep the original filing date of the European application, so a similar process could be easily implementable. It would mean extra expense for rights owners who want to maintain UK trade mark protection, but as current conversion costs are broadly comparable with national filing fees, the cost may not be prohibitive.
While the spectre of Brexit provides plenty of reasons to review trade mark portfolios, it is in any case good practice to conduct regular audits to ensure that registrations are valid and enforceable, and that the scope of protection properly reflects the owner's activities.
Something that can catch trade mark owners unawares is the use requirement. If a registered trade mark hasn't been used commercially in the country of registration within a defined period – usually five years from the grant of registration - then that registration will be vulnerable to non-use cancellation. It is unfortunately not unusual for a trade mark owner to find itself in the position of needing to enforce a registered trade mark against a would-be infringer, only to find that, as the trade mark has not been used, it is not effectively unenforceable. European trade mark rights have an additional vulnerability due to the requirement that the mark be used in a 'significant' part of the community: one member state is not enough. A European trade mark that is only used in the UK is therefore vulnerable to cancellation, and trade mark owners should ensure that, particularly for geographically limited trade marks, national protection is also in place in the primary markets.
We recommend that all trade mark owners review their trade mark protection regularly to ensure that it reflects current use. Rather than waiting to see what happens next, take the opportunity now to scrutinise your registrations, particularly the European trade marks: was registration granted before June 2011, and if so, is the mark being used commercially? Where is it being used: is it genuinely 'European' or it is really a national trade mark?