Time for brands to rethink their IP strategy

Post-Brex­it inde­pen­dence of UK courts from Euro­pean Union juris­dic­tion comes at a time when coro­n­avirus still looms large. The pan­dem­ic has led to a surge in coun­ter­feits as ecom­merce has boomed. All these fac­tors mean brands must rethink their intel­lec­tu­al prop­er­ty (IP) strat­e­gy. 

“Cer­tain EU rights no longer apply in the UK. Right now, busi­ness­es have to be proac­tive and strate­gic, par­tic­u­lar­ly when it comes to pend­ing trade­mark and design reg­is­tra­tions. This is a gold­en oppor­tu­ni­ty for brands to review their pro­tec­tion. Action on intan­gi­ble assets should be pri­ori­tised,” says Tania Clark, part­ner for the trade­marks group at With­ers & Rogers, one of Europe’s largest IP attor­ney firms.

On Jan­u­ary 1, British author­i­ties grant­ed auto­mat­ic pro­tec­tion in the UK for all busi­ness­es with exist­ing EU trade­mark and design reg­is­tra­tions. Those pend­ing how­ev­er have until Sep­tem­ber 30 to reap­ply. Fail­ing to act could result in lapsed pro­tec­tion. For tech­no­log­i­cal inno­va­tions pro­tect­ed by Euro­pean patents, the pic­ture is more straight­for­ward, as pro­tec­tion will remain large­ly unaf­fect­ed.  

“Going for­ward, it’s pos­si­ble UK courts could reach dif­fer­ent con­clu­sions to their Euro­pean coun­ter­parts. There­fore, it may become nec­es­sary to ensure patent cov­er­age across both ter­ri­to­ries. Region­al set­tle­ments could include sep­a­rate lit­i­ga­tion in the UK and one or more EU juris­dic­tions. For this rea­son, pro­tect­ing your patents in both ter­ri­to­ries could become the new norm,” says Clark, whose firm has offices across the UK, as well as in Paris and Munich.

Diver­gence in IP and the chal­lenges this brings comes as brands face oth­er pres­sures. The pan­dem­ic has led to a spike in online shop­ping. At the height of the first lock­down, ecom­merce account­ed for more than 32 per cent of retail sales, while pre-COVID it was below 20 per cent, accord­ing to the Office for Nation­al Sta­tis­tics. 

This was accom­pa­nied by a surge in fake goods in 2020, as con­sumers shopped more online. IP crime is believed to cost the UK econ­o­my more than £9 bil­lion in lost rev­enue every year,  equat­ing to £4 bil­lion in unpaid tax­es. It also leads to the loss of around 60,000 jobs, accord­ing to the Organ­i­sa­tion for Eco­nom­ic Co-oper­a­tion and Devel­op­ment. 

“Busi­ness­es in the UK need to be vig­i­lant and agile to ensure good­will asso­ci­at­ed with their brand isn’t erod­ed and rev­enue streams are pro­tect­ed. They can’t rely on EU cus­toms to flag issues con­cern­ing coun­ter­feit prod­ucts under the EU cus­toms notice sys­tem as it no longer applies to goods com­ing into the UK. Com­pa­nies need to know exact­ly what their UK IP rights are and take out a UK appli­ca­tion for action,” says Clark.  

“Know­ing what IP rights you own, and where, is fun­da­men­tal to pro­tect­ing brand val­ue, par­tic­u­lar­ly dur­ing times of leg­isla­tive and struc­tur­al change. Man­ag­ing IP rights on a juris­dic­tion­al basis is cru­cial if you’re going to get ecom­merce sites to take down prod­ucts that infringe trade­marks or reg­is­tered designs before they dam­age your busi­ness. The poten­tial for coun­ter­feits glob­al­ly, or com­pe­ti­tion via the web, has nev­er been greater. Get­ting as much IP pro­tec­tion, in as many ter­ri­to­ries as pos­si­ble, is there­fore vital.”    

Brands need a more strate­gic and 360-degree view of IP issues, how these work for port­fo­lios glob­al­ly and in each ter­ri­to­ry, whether it be Japan, the Unit­ed States, EU, UK or oth­er juris­dic­tions. The pro­tec­tion of IP is nuanced in dif­fer­ent lan­guages and mar­kets. Busi­ness­es need guid­ance on local IP mat­ters and con­flicts that may occur, but also advice on oppor­tu­ni­ties. 

For instance, the Japan-UK trade deal is lead­ing to a flour­ish of new IP rights sur­round­ing pro­tect­ed geo­graph­i­cal indi­ca­tions, or PGIs, for icon­ic British food and drink prod­ucts. Think Melton Mow­bray pork pies or Scot­tish whisky. The num­ber of UK PGIs is increas­ing from sev­en under the out­go­ing EU-Japan deal to rough­ly sev­en­ty under the new UK-Japan agree­ment. A sim­i­lar pro­lif­er­a­tion of PGIs could occur with oth­er inter­na­tion­al trade agree­ments. 

“The deal signed with Japan high­lights how impor­tant PGIs could be for Britain’s food and drink indus­try.  There could be a sig­nif­i­cant com­mer­cial ben­e­fit for UK pro­duc­ers that own pro­tect­ed food names. How­ev­er, brands will need to main­tain their IP assets if they’re to cap­i­talise on the com­mer­cial oppor­tu­ni­ties unlocked by these trade deals in the future,” says Clark.   

The UK now has dis­tinct reg­is­ters for PGIs and pro­tect­ed des­ig­na­tions of ori­gin (PDOs). All exist­ing PGIs and PDOs have been auto­mat­i­cal­ly trans­ferred to the new UK equiv­a­lent reg­is­ters. How­ev­er, brand own­ers must now apply to the EU reg­is­ters to main­tain pro­tec­tion in the EU, sim­i­lar to the sit­u­a­tion with trade­marks.  

“Any new UK PGIs will also have to be reg­is­tered with the EU from this Jan­u­ary. There will be noth­ing auto­mat­ic about the process when seek­ing this type of IP pro­tec­tion,” says Clark, who is the imme­di­ate past-pres­i­dent of the Char­tered Insti­tute of Trade Mark Attor­neys.

Cer­tain­ly, the changes in 2021 are seis­mic, rep­re­sent­ing a rare oppor­tu­ni­ty for busi­ness­es to review IP strate­gies more wide­ly. Trade­mark and design port­fo­lios will increase in size. Many licences with Europe will need to be renewed and dis­tri­b­u­tion agree­ments reviewed. 

“Busi­ness­es will need to appre­ci­ate where they are going in the future. They will need a holis­tic and glob­al approach. At the same time, they will have to under­stand how all these spe­cif­ic changes will affect them,” Clark con­cludes. 

“Brands will need to redou­ble their efforts if they want to con­tin­ue to trade at home in the UK and in Europe. There is also poten­tial in new mar­kets. The com­mer­cial val­ue of IP can­not be over­stressed and should be a real dri­ver of busi­ness deci­sions. Get­ting the best advice and find­ing the right IP part­ner with a foothold in mul­ti­ple mar­kets is cru­cial.”

For advice about issues affect­ing IP in 2021, please go to www.withersrogers.com

Pro­mot­ed by With­ers & Rogers