It is not certain that the UK will leave the EU, nor is it clear on what basis it will leave, if and when it does. There may be an exit without any terms having been negotiated and agreed between the UK and the EU (a so-called ‘no-deal Brexit’) or the UK Government may secure a withdrawal agreement with the EU which is then ratified by the UK and EU parliaments.
However, the position with respect to what will happen to EU Registered Community Designs (RCDs) as of exit day (whenever that may be) is known in part, even if the finer details and administrative procedures are not.
The UK Government has approved draft regulations, The Designs and International Trade Marks (Amendment etc.) (EU Exit) Regulations 2019, which set out what will happen to European Union Design rights on exit day. A link to the text can be found here.
The terms relating to RCDs of any revised withdrawal agreement reached between the UK Government and the EU are likely to be the same as those of the Draft Withdrawal Agreement, which was agreed between the previous UK Government and the EU but not ratified by the UK Parliament. Under the Draft Withdrawal Agreement, a transition term will be implemented up until 31 December 2020. At the end of the transition period, the holder of a published RCD (or EU Designation of an International Design Registration under the Hague Agreement) will become the holder of a Registered Design Right in the UK for the same design. The holder of an Unregistered Community Design Right at the end of the transition period will also become the holder of an equivalent right under UK law that affords the same protection as an Unregistered Community Design Right (save that it will relate to the UK only). The equivalent right will have an equal period of protection.
The EU Exit Regulations will (absent any changes) come into force on exit day, in the event of a ‘no-deal Brexit’. As they are compatible with the withdrawal agreement, they are also likely to come into force (unless they are amended or set aside) at the end of the transition period. The Regulations set out in detail how EU design rights will become UK rights under the relevant UK legislation. The main provisions are:
The same provisions are made for International Design Registrations (under the Hague Agreement) which designate the EU and where, immediately before exit day, the EU IPO has confirmed protection of the design to WIPO. They will be known as "Re-registered International Designs".
It will be possible for owners of an RCD to opt-out from the re-registration of their design in the UK by filing a notice to this effect at any time on or after exit day.
A Community Design Application which has been given a filing date by the EU IPO, but which is not granted or refused by the EU IPO immediately before exit day, will need to be refiled at the UK IPO as a UK Design Application within a period of 9 months beginning with the day after exit day. The new UK application will retain the filing date (and any applicable priority date) of the Community Design Application. Again similar provisions are made for pending International Design Registrations which designate the EU.
At this stage, the UK IPO has not provided any information on the application process for a new UK Design Application that stems from a pending Community Design Application, though it could be as simple as indicating the relevant pending Community Design Application at the time of filing.
It will also be necessary to refile in the UK where there is an existing RCD whose publication has been deferred under the EU Designs Regulation (it is possible to defer for up to 30 months from the filing date). The period in which it will be necessary to reapply will be the same nine month period as for pending applications. Similar provisions are also made for International Design Registrations which designate the EU and which are subject to deferred publication.
Again, the UK IPO has not provided any information on the application process for registered RCDs with deferred publication. Also, as UK law only provides for a period of up to 12 months to defer publication, it is not clear at this stage for how long it will be possible to defer the publication of the new UK case.
The new regulations provide that Unregistered Community Design Rights that subsist on exit day will continue to have effect in the UK as "continuing unregistered community designs". They also provide for a new "Supplementary Unregistered Design Right", which will be identical to the Unregistered Community Design Right, save that it will relate to the UK only, and will only arise in the event of first disclosure in certain qualifying countries: the UK, Hong Kong, New Zealand and UK dependent territories. This differs from an Unregistered Community Design Right, which only arises where the design is first disclosed in the European Union. Up until recently the prevailing view, including of the EU IPO, was that a first disclosure that gives rise to Unregistered Community Design Right must take place in the physical territory of the European Union. An alternative view is that a disclosure anywhere will suffice, provided that in the normal course of business the disclosure could reasonably have become known to the circles specialised in the sector concerned, operating within the European Union. Which view is correct will in due course be decided by the Court of Justice of the European Union (CJEU), following referral of the question by the English courts in Beverly Hills Teddy Bear Company vs PMS International Group plc  EWHC 2419 (IPEC). The CJEU’s answer to this question is likely to be determinative not just in relation to how Unregistered Community Design Right can arise, but also how the new UK Supplementary Unregistered Design Right can arise. If the prevailing view set out above is followed, designs that are first disclosed in the physical territory of the European Union will not qualify for the new UK Supplementary Unregistered Design Right. Conversely, designs first disclosed in the physical territory of the United Kingdom will not qualify for Unregistered Community Design Right. If the alternative view is followed, one will qualify for both rights if the event of first disclosure could, in the normal course of business, reasonably have become known to the circles specialised in the sector concerned operating in the European Union and in the United Kingdom. The geographical location of the first disclosure will not determine qualification for the rights.
The EU Exit Regulations also include a significant change to the separate UK Unregistered Design Right, which lasts for 10 years from first marketing and protects the shape of an article (but not surface decoration). Qualification for this right is by reference to the qualifying country of the designer or their employer, or the country of first marketing if done by a qualifying person. At present the qualifying countries are all EEA states, plus Hong Kong, New Zealand and UK dependent territories. Qualifying persons are designers (or their employers) who are citizens of (or incorporated in) or who are resident in (or have a substantial place of business in) these states. On exit day, the qualifying countries will narrow to the UK, Hong Kong, New Zealand and UK dependent territories; designers and their employers in the EEA will no longer qualify.
At present, given the speed of registration of an RCD at the EUIPO, clients may not feel that it is absolutely necessary to dual file design applications in the UK and EU, particularly given that there will be a 9 month period to refile in the UK after exit day. It is however advisable where immediate enforcement of design rights in the UK is required. Once the date the new regulations will come into force is known, the position may change. We will provide further advice at that stage.
Those with RCDs that are the subject of deferred publication may want to consider bringing forward publication in the Community Designs Bulletin, so as to avoid the need to refile UK design applications after exit day.
After exit day, it will, of course, become a necessity to file design applications in both the UK and EU, if protection is required in both jurisdictions. J A Kemp will be able to file in both given that we have offices in the UK and in Paris.
Clients with RCDs on our records can rest assured that J A Kemp will add the new Re-registered Designs (and Re-registered International Designs) to our records at no charge. We will notify clients of this in due course. We will seek instructions in the unlikely event that clients wish to opt-out from re-registration in the UK. We will also notify clients who have pending Community Design Applications and RCDs with deferred publications on our records on exit day and seek instructions as to whether they wish to refile in the UK within the 9 month period to do so. Clients who use other EU counsel for their EU Designs at present may wish to use J A Kemp for UK Designs in the run-up to Brexit and in the period following Brexit. We currently offer a 50% reduction in our UK service charge for filing when a corresponding UK case is parallel filed with an EU application, whether or not J A Kemp filed the EU case.
Clients should err on the side of caution and assume that the CJEU will follow prevailing opinion and answer the question referred to it by the English courts by concluding that a physical disclosure in the territory of the European Union is required to give rise to Unregistered Community Design Right. If the CJEU does decide this way, designers or their employers in the EEA will be unlikely to qualify for any form of Unregistered Design Right in the United Kingdom post-Brexit, assuming first disclosure of their design in the European Union. The converse will apply to designers and their employers in the United Kingdom, unless they choose to disclose their design first in the European Union, in which case they will qualify for UK Unregistered Design Right and Community Unregistered Design Right. Therefore, at least until the CJEU’s decision is known, those that have hitherto relied on Unregistered Design Rights to protect their designs in the European Union (including the United Kingdom) may need to change their protection strategy and file for registration in at least one territory (where the design is not first disclosed). For EEA based designers, this is likely to mean filing in the United Kingdom, while UK based designers will likely need to file for an RCD, unless they choose to first disclose in the European Union.
Please contact your usual J A Kemp adviser if you have any general queries or would like to assess specific implications for your business.