Reshaping trade mark law

On 14 January, the Trade Marks Regulations 2018 (SI 2018/825) came into force, implementing the Trade Marks Directive (EU) 2015/2436 and amending the Trade Marks Act 1994 and the Trade Mark Rules 2008. The regulations represent a sea change and bring UK law up to date with both the EU rules and digital advances.

What are the main changes?

What can be registered. Perhaps the most widely heralded change is the expansion of what can be registered as a trade mark. The need to provide a graphical representation of a trade mark has been dispensed with. The IPO will now accept applications in “the widest range of digital file format that is technically possible with [their] current systems”, aiming to update systems to accept the same formats as EUIPO currently accepts for EU trade marks, including .mp3, .mp4, and .jpg files. As a result, it is now theoretically possible to register colours, sounds, smells, tastes, motions or holograms, so long as it is possible to distinguish the goods or services of one business from others and for them to be represented “in a manner which enables the competent authorities and the public to determine the clear and precise subject matter of the protection afforded to its proprietor”.

Absolute grounds for refusal. Conversely, the list of things excluded from registration has also been extended. Previously, it was not possible to register a mark consisting exclusively of a shape, if the shape resulted from the nature of the goods or was necessary to obtain a particular result, or gave substantial value to the goods. Now it covers not just shapes, but any intrinsic characteristic of the goods. An example is the sound of a Harley Davidson: it is produced through the technical properties of the engine, so it results from the technical performance of the goods and is therefore unlikely to be registrable.

Transfer of undertaking presumption. Regulation 14 amends the 1994 Act to include the presumption that a contractual obligation to transfer a business includes an obligation to transfer any registered trade mark. This does not apply if the parties agree otherwise or it is clear from the circumstances that it should not apply. Going forward, appropriate due diligence should be carried out by purchasers to identify registered trade marks used by the business, and to enter into assignments accordingly. If any such mark is not specifically mentioned, the seller will nonetheless be required to transfer it (unless an exception applies). Consequently, when acting for the seller of a business, it is important to have an agreement in place specifying any marks not intended to be transferred.

Defence of “non-use”. There is a new defence of “non-use” to infringement proceedings. Previously, the defender would have had to start separate non-use proceedings or make a counterclaim for invalidity. This change should be welcome for litigators, as it will consolidate the process and save on unnecessary costs. 

Expired trade mark no longer an “earlier mark”. An expired trade mark no longer constitutes an “earlier mark”, meaning the owner will not be highlighted to the applicant for a new trade mark. This could be a potential issue if such applicants begin to use a mark in good faith but later have its use challenged by the proprietor of a trade mark which had expired but is then restored.

IPO search reports. This is further complicated by the fact that IPO search reports no longer take into account marks which have expired during the year leading up to the search, for the purposes of considering whether a later mark is registrable. Similar provisions to ss 28 and 28A of the Patents Act 1977 have been introduced to protect third parties who innocently use a mark which is the same as or similar to an expired mark, during the period between its expiry and restoration. Such use is immune from infringement actions during that period; however any subsequent use is unprotected. It may therefore be prudent to advise clients seeking to register a new mark of the possibility of an expired mark similar to their own being restored, and to carry out additional checks.

Counterfeit goods in transit. A final point, long anticipated, is that it will now be easier to stop counterfeit goods being transported through the UK. Previously, a trade mark owner would have to prove that the goods were at risk of being put on the market in the UK before they could be seized. Now, the onus has shifted to the person transporting the goods to prove that the trade mark owner has no right to seize them. This change is likely to be welcomed as an important step in assisting trade mark owners.

Practical implications

Although many practitioners will be familiar with these practices from their experience with EU trade mark procedures, it is crucial that the changes are appropriately reflected upon.

Changes such as those to IPO searches may result in a need to warn clients of the potential for their use of a new mark to be challenged by the holder of a similar restored one, and for additional searches to be carried out. But on the whole, the regulations seem to have been well received and applauded for reflecting the needs of modern businesses, offering protection for otherwise vulnerable intellectual property.