Brexit: what happens now with EU contracts, EU trademarks and EU designs? – Part II

Read here three of Brexit’s main impacts on EU contracts and EU trademarks/designs

Photo: Rocco Dipoppa via Unsplash

An EU trademark and an EU design give the holder rights for all countries of the European Union. With such a trademark or design, one can prohibit others from using a similar trademark or design in all EU countries. Even if the holder does not use that trademark or design in a certain EU country. Existing EU trademark and design registrations automatically extend to new acceding countries. Never before have we had a situation where a country leaves the EU.

When it became clear more than 4 years ago that the United Kingdom (‘UK’) would be leaving the EU, it seemed like a very remote situation, but one with many uncertainties and ambiguities. See the previous (Dutch) blog on the impact of Brexit on EU trademarks and designs and key questions. Negotiations on a trade agreement are still ongoing, but the deadline of January 1, 2021 – the end of the transition period: until then, the British are still bound by EU rules – is rapidly approaching. Whether there will be a hard, no-deal Brexit or not, a lot will change in many areas, including EU trademark and design law.

What is the impact of Brexit on EU contracts and EU trademarks and designs? I will discuss the most important consequences below:

 

  1. EU trademark/EU design → automatic division
    EU trademarks and EU designs registered before January 1, 2021 will automatically be split into an EU trademark/design and a UK trademark/design. Thus, trademark and design owners do not have to apply for a new trademark or design registration in the UK if they want protection there. However, if the registration is not yet final, this division will not be automatic. In that case, the trademark must also be applied for in the UK separately. This can be done until September 1, 2021 (with additional costs). Are you the owner of an EU trademark or an EU design registration? Then determine (in time) whether your rights extend to the UK and take the necessary measures.

    Incidentally, licenses registered in the EU register will not be automatically converted into an EU license and a UK license. Registration for the UK will therefore have to be reapplied at the Intellectual Property Office in the UK. This also applies to other (security) rights such as rights of pledge.

  2. EU contracts → check/amend
    For many companies, it is very important that contracts with English contract partners and/or that contain EU-wide provisions and/or cover an EU trademark or design, will be checked, renegotiated and amended where necessary. For example, in the case of license contracts, where a license has been granted for the use of an EU trademark, the situation after January 1, 2021 must be checked and, if necessary, renegotiated: will that license still apply to the UK or is the UK not included?
  1. Will an EU injunction still be valid in the UK?
    EU trademark owners and EU design owners that started proceedings before an EU court and obtained a decision before January 1, 2021, will be able to execute the judgment, also in the UK. Proceedings initiated before January 1, 2021, that did not yet lead to a judgment, will no longer be enforceable in the UK. In line with this, UK courts will no longer be able to take a decision in cases where an EU trademark or EU design is involved. Decisions of UK courts taken before January 1, 2021 can still be enforced in the EU.

Important consequences for all holders of EU trademarks and EU designs and in general for all companies dealing with contracts extending to ‘the EU’: as from January 1, 2021 the scope may be different/limited (also read this information). So check those contracts carefully.

Do you have any questions about this?

Feel free to call or email us.

Brexit: it is finally there (but it is still unclear)

At 00:00 hrs on 1 February 2020, Brexit is finally a reality and the United Kingdom is no longer part of the European Union. However, now that the UK Parliament and the EU Parliament ratified the Withdrawal Agreement on 23 and 29 January 2020, there will be no hard (or no deal) Brexit, at least not for the moment.

Transition period

The Withdrawal Agreement provides for a transition period that will end on 31 December 2020. On the basis of the Withdrawal Agreement, basically all EU law will continue to apply to and in the UK during the transition period. This means that until 31 December 2020, little will change in comparison with the period prior to Brexit. One may say that, as long as no permanent deal on transition has been reached, a soft Brexit applies. During 2020 UK financial institutions will continue to have access to the EU as before. The same goes for EU financial institutions and access to the UK.

As a result, the statutory arrangements made by EU and national legislators and regulators with a view to a hard Brexit, do not need to be enacted in 2020. These arrangements may however still be necessary if no agreement is reached between the UK and the EU on their future relationship. In other words, a hard Brexit is still possible, in which case the statutory arrangements may be enacted after all. Whether this will be the case will become clear in the course of 2020 or even thereafter, should the transition period be extended.

Dutch statutory arrangements for investment firms and AIFMs

As indicated in previous Brexit updates, arrangements have already been made in the Netherlands, or are already in place, to accommodate investment firms and AIFMs from the UK when dealing with professional clients or qualified investors within the Netherlands. This is primarily done with a view to protecting Dutch institutional investors, enabling them to continue to deal with UK investment firms and AIFMs. As a result of the transition period, the new Dutch exemption for UK investment firms that was announced earlier will not be enacted for the moment due to the lack of a hard Brexit.

Action required?

Even though the existing EU regime will continue to apply to and in the UK in 2020, the most important conclusion to be drawn is that for the moment a soft Brexit is now truly a fact, but for the moment only for 2020. This means that parties that have postponed their mitigating actions must still take action to address the consequences of Brexit. While the negotiations between the UK and the EU may still result in an agreement on continued access by UK financial institutions to the EU, success should not be taken for granted. Should such negotiatons fail and in the end result in a hard Brexit, measures will have to be taken to secure continued access to (clients in) the EU.

Corporate liability for human rights: the UN Guiding Principles on Business and Human Rights

If a corporation abuses employees, is accused of labour trafficking, complicit in gross human rights abuses by local governments, complicit in human rights violations while installing pipelines through villages or complicit in pollution, it should be held responsible. The question is whether human rights laws also apply to these companies.

Some argue that international law only applies between states, or that human rights obligations apply only to states, and that the UN Principles cannot create legal obligations for companies. However, this view can no longer be credibly maintained. There is a growing acceptance that international human rights treaties create obligations – at least indirectly – on companies and that the UN Guiding Principles on Business and Human Rights can be used as a standard.

The UN Guiding Principles on Business and Human Rights are the work of John Ruggie, former UN Secretary-General’s Special Representative for Business and Human Rights. The principles are non-legally binding, but aim to establish a global standard for addressing the adverse human rights impact of corporate activity. Ruggie has built a frame-work of three pillars: ‘ Protect, Respect and Remedy’. These are:

  1. The state’s duty to protect human rights;
  2. the corporate responsibility to respect human rights;
  3. the need for greater access to remedy – both judicial and non-judicial – for victims of business-related abuse.

The UN principles were endorsed by the UN Human Rights Council in June 2011. See also unglobalcompact.org and the American Bar Association in February 2012. They have also been incorporated into the OECD Guidelines for Multinational Enterprises, the International Organisation for Standardisation (ISO) 26000 guidance on social responsibility for companies, the sustainability policy of the International Finance Corporations and the European Commission’s new corporate social responsibility strategy.     

The UN Principles are applicable to all governments and to all businesses in all situations. It sets forth basic, minimal business obligations regarding human rights. They reaffirm that states still bear the primary responsibility for promoting and protecting human rights, but recognize that transnational corporations and other businesses, as organs of society (and collections of individuals), carry responsibilities as well. It is understood that the human rights are – at a minimum – those expressed in the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work.

The responsibility to respect human rights requires that business enterprises:

  • Avoid causing or contributing to adverse human rights impact through their own activities, and address such impact when it occurs.

  • Seek to prevent or mitigate adverse human rights violations that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those violations.

  • In order to meet their responsibility to respect human rights, business enterprises should have in place policies and processes appropriate to their size and circumstances.