The UK will be leaving the EU, and with it the EU Trade Mark and Design system, at 11pm on 31 December 2020.
We have previously discussed how this will affect UK and EU trade marks and designs in general; now that the date is almost upon us, we wanted to highlight an important detail around licensing arrangements and recordals. Of course, since June 2016, many IP licences have been ‘Brexit-proofed’ and contain reference to the UK and EU separately. However, IP licences are less likely to contain specific reference to UK cloned rights in relation to EUTMs and/or RCDs, as these rights will not be created until 1 January 2021.
In any case, it will not be possible to record a licence that refers to the EUTM registration and/or RCD at the UK IPO until the corresponding UK cloned right(s) is/are created. Therefore, the UK IPO is extending the usual 6 month period in which a licence should be recorded to ensure it can be enforced properly to 12 months. This concerns the UK cloned right only and not all licence recordals (where the usual 6 month period will apply).
Although recordal of a licence at the UK IPO is not compulsory in order to enforce a UK trade mark, it is highly desirable to do so. If a licensing transaction is not registered within the six-month grace period, the licensee is not entitled to claim its legal costs of an enforcement action from the infringer(s); clearly, this could leave the licensee out of pocket by a five- or six-figure sum following an infringement claim. In relation to UK Registered Designs (which will be cloned from RCDs on 1 January 2021), there is an express requirement that licences to such designs be registered at the UK IPO.
Kemp Little is well placed to advise on any licensing requirements and recordals – do not hesitate to get in touch.