Should U.S. Brand Owners Be Worried About Brexit?

//Should U.S. Brand Owners Be Worried About Brexit?

Should U.S. Brand Owners Be Worried About Brexit?

By | 2018-10-22T12:53:59+00:00 September 27th, 2018|

By Stephen D. Wilson | September 25, 2018

In an increasingly global, crowded, and competitive market, savvy U.S. brand owners recognize the strategic benefits, value, and necessity of protecting their trademarks and other intellectual property (IP) beyond U.S. borders.  The United Kingdom (UK) and the European Union (EU) are important markets for many U.S. businesses.  However, Brexit is creating uncertainty for U.S. companies of all shapes and sizes across all industries.

What Is Brexit?

On June 23, 2016, the UK rocked the world with a referendum vote to exit the EU, by a narrow margin of 52% to 48%.  The withdrawal of the UK from the EU and the associated political process are referred to as “Brexit” (a merger of the words Britain and exit).  Brexit is unprecedented because no other EU Member State has ever left the EU, which presently includes 28 member countries.

When Will Brexit Occur?

The Brexit referendum was non-binding, but the UK government initiated the formal EU withdrawal process on March 29, 2017, and the UK is scheduled to leave the EU on March 29, 2019 (Brexit Day).  Although Brexit Day is rapidly approaching, the UK and EU have failed to reach an agreement on terms as of September 24, 2018, creating uncertainty for IP owners throughout the U.S. and the world.

 How Will Brexit Affect U.S. Brand Owners?

Many foreign countries have first-to-file trademark laws, so trademark owners who lose the race to file first may find themselves effectively locked out of key international markets.  It is not uncommon for trademark “squatters” to file blocking trademark applications that prevent U.S. trademark owners from using or registering their marks in foreign countries.  U.S. trademark owners who wish to secure trademark rights in the EU or the UK currently have various options available to either file national trademark applications in each country or seek trademark protection covering the entire EU (and potentially other countries) with a single application or international registration.  However, Brexit has created global uncertainty for IP owners.

Trademark owners have raised myriad questions and concerns about how Brexit will affect registration and protection of trademarks and other IP rights that are currently harmonized under EU legislation or international treaties.  While many questions remain unanswered, there are a range of options and strategies available to U.S. brand owners to protect trademarks and other IP rights in the EU and the UK as Brexit Day approaches.  However, there is no “one size fits all” solution, so brand owners should discuss strategies with their trademark counsel to protect their brands and avoid potential loss of IP rights outside the U.S.

Conclusion

Brexit is certain to affect the rights of many IP owners throughout the U.S. and the world in many ways, but the future remains uncertain.  As Brexit Day rapidly approaches, U.S. brand owners should not delay in consulting with experienced trademark counsel to assess their global brand protection strategy and minimize the risk of getting locked out of important markets beyond U.S. borders.

The Beggs & Lane Intellectual Property Group assists clients worldwide with U.S. and international protection of trademarks and other IP.