Changes to the UK trade mark regime: Trade Marks Regulations 2018 - coming into force on 14 January 2019

The new EU Trade Mark Directive (2015/2436), designed, in part, to make trade mark law across the EU fit for the digital age, will be implemented into UK law on 14 January 2019 via the Trade Marks Regulations 2018 (the Regulations). It makes significant and important changes to the UK trade mark regime.

Key changes are:

• Graphical representation is no longer a pre-requisite for registration of a trade mark so sound and motion or hologram trade marks may now be registered (amendments are made to the technical function exception to apply to new forms of trade mark representation too).
• Seizure of goods passing through the UK will now be easier with the burden of proof on the shipper not the trade mark owner.
• Licensing and assignment of trade marks: There are several changes to the Trade Marks Act 1994 (TMA) implemented via the Regulations which affect the rights and remedies of licensors and licensees of registered trade marks in the UK, including changes to rights to bring proceedings. There is also provision for a contractual obligation to transfer a business to be taken to include an obligation to transfer any registered trade mark or application of that business, except where there is agreement to the contrary or it is clear in all of the circumstances that this presumption should not apply. For further details see the section on Licensing and Assignment below.
• Trade marks shown (incorrectly) as generic terms in dictionaries: The regulations provide for court action to be brought where dictionaries refuse to amend reference to a registered trade mark as a generic term (where this is incorrect). A new section 99A TMA.
• Infringement claims may be brought without the need for an invalidity claim also: An action for infringement of a registered trade mark by another registered trade mark may be brought without the need for an invalidity application (as was previously the case).
• Changes to infringement defences:
  • The "own name defence" will now only apply to personal names (not company or trading names);
  • Non-use will now also be a specific defence;
  • If a similar earlier mark had expired before you registered yours and is then renewed or restored, you have a defence to infringement allegations for a fixed period.
• Anti-counterfeiting measures: Greater scope for civil actions of enforcement against those preparing tags and security or authenticity features or devices, as well as labels and packaging to which trade marks are attached in an unauthorised fashion, prior to making counterfeit products (rather than recourse to criminal offences).
• Opposition - proof of use - changes to the start of the 5 year period of use.
• There are also provisions on collective trade mark ownership and rights to bring actions, and on division of trade mark registrations.

The old Trade Mark Directive 2008/95/EC is repealed with effect from 15 January 2019.

The main changes to UK trade mark law and practice are set out in more detail below:

Licensing and Assignment

Rights of Licensor: Under the revised TMA, a licensor may bring proceedings against a licensee who breaches certain provisions of its licence. These new rights of the licensor are in addition to the rights the licensor may have to bring proceedings against a licensee for breach of the licence under contract law.

The relevant provisions must relate to:

• The duration of the licence;
• The form in which the trade mark may be used;
• The scope of the goods and services covered by the licence;
• The territory in which the trade mark may be used; or
• The quality of the goods or services provided by the licensee.

The licensor may rely on these new rights in relation to any relevant breach of a licence committed on or after 14 January 2019 regardless of the date of the licence agreement. Section 28 TMA has been amended to this effect.

Rights of licensees in case of infringement:

• Non-excusive licences: Previously, unless the licence provided otherwise, a non-exclusive licensee was entitled to ask the owner of the licensed registered trade mark(s) to commence proceedings against a third party infringer and, if the owner refused, or failed to do so within 2 months, the non-exclusive licensee could commence proceedings itself. Under the amended TMA, a non-exclusive licensee will now not be able to commence proceedings for infringement without the trade mark owner's permission (which may be given in the licence agreement itself or separately).
• Exclusive licences: As previously, an exclusive licensee may request the owner to commence infringement proceedings and, if the owner refuses or fails to do so within 2 months, the exclusive licensee may commence proceedings itself.  Prior to the amendments introduced by the Trade Marks Regulations 2018, this right of an exclusive licensee could be excluded by contractual provision in the licence. The new drafting suggests that this it is no longer possible to contract out of this right. Section 31 has not been amended and allows exclusive licensees to bring actions in their own name, if given the right to do so in the licence agreement. In these circumstances the right to call on the trade mark owner to bring proceedings will not apply.

Any request from a licensee for permission to bring infringement proceedings under these new provisions can take place after 14 January 2019, even if the alleged infringement took place before that date.  A new section 30(1A) is inserted in the TMA to this effect.

Licensee Intervention for Compensation in Infringement Proceedings: Where the owner of a registered trade mark brings infringement proceedings, the court will take into account any loss suffered by any licensee and, if successful, the court may order that the owner holds some or all of the damages on behalf of the relevant licensee.  Under a new section 30(A) TMA a licensee will now have a direct right to intervene in infringement proceedings in order to seek compensation/damages.

Licensing provisions apply to applications as well as registrations: The licensing provisions in the TMA (including the amendments to the licensing provisions out-lined above) will also apply to applications for trade marks made on or after 14 January 2019.  Thus, for example, a licensor could bring proceedings against a licensee that is in breach of a licence of a trade mark application. However, caution should be exercised since an application may not be granted or the goods or services covered by the trade mark may be revised before grant, which could impact on the rights and obligations under the licence agreement.

Assignment of registered trade mark: Under the TMA it has always been possible to transfer a registered trade mark or an application for a trade mark in connection with the goodwill of a business or independently. From 14 January 2019 the TMA will include a provision that a contractual obligation to transfer a business is to be taken to include an obligation to transfer any registered trade mark or application of that business, except where there is agreement to the contrary or it is clear in all the circumstances that this presumption should not apply. A prudent purchaser should always undertake appropriate due diligence to identify any registered trade marks (including applications) used in relation to the business that it is acquiring and appropriate assignments entered into. However, if any such registered trade mark or application is not specifically identified in the transaction documents, the seller will nevertheless be obliged to transfer it to the purchaser unless it is clear from the circumstances or from the transaction documents that such trade mark or application is to be excluded.

Other changes

• Graphical (visual) representation is no longer a pre-requisite for registration of a trade mark eg MP3 or 4 formats will be allowed. The representation of the mark can be filed using one of the following formats: - Shapes: OBJ, STL and X3D; Figurative, pattern, colour: JPEG; Sound: MP3; Motion, multi-media and hologram: MP4. Amendments to sections 1 and 32(2) TMA. nb You will have to file your UK (base) application with the mark shown graphically as, for the time being, you will not be able to use a UK application with a mark presented in a non-traditional electronic format as the basis for an international application.
• Technical function exception: Trade marks which consist exclusively of shapes cannot be registered if the shape itself performs a purely technical function, adds value to the goods or results from the nature of the goods. Following the extension of acceptable forms of trade mark (see above), this kind of prohibition has now been extended to cover not just shapes, but any characteristic which is intrinsic to the goods applied for. The IPO guidance gives the example of "a repetitive high pitched sound would be considered to be an intrinsic part of a fire alarm". The guidance suggests that an application for a mark which therefore consists of such a sound, applied for in relation to fire alarms, is likely to be subject to an objection under these provisions. Sections 3(2)(a)-(c) TMA amended.
• Seizure of goods passing through the UK: Stopping infringing goods that are "in transit" through the UK is often difficult. The new regulations change the burden of proof: it will now be up to the person shipping the goods to prove that the trade mark owner has no right to stop the goods being marketed in the country of destination. The guidance states: "They may show, for example, that you have no registered trade mark in that country". Previously, the trade mark owner could not have stopped the goods unless it could be shown that they were at risk of being put on the market in the UK. New section 10A TMA.
• Trade marks shown (incorrectly) as generic terms in dictionaries: The regulations provide for court action to be brought where dictionaries refuse to amend reference to a registered trade mark as a generic term (where this is incorrect). A new section 99A TMA.
• Infringement claims may be brought without the need for an invalidity claim also: An action for infringement of a registered trade mark by another registered trade mark may be brought without the need for an invalidity application (as was previously the case).
• Changes to infringement defences:
  • The "own name defence" will now only apply to personal names (not company or trading names) – new sections 10(4) and 11(2)(a). These provisions are not retrospective, but the Courts may consider that continued use may still be infringing;
  • Non-use will now also be a specific defence - new section 11A - thus avoiding the need to bring parallel revocation proceedings where there is already an infringement action - the defendant will be able to request proof of use by the trade mark owner (see also proof of use in invalidation proceedings, below);
  • If a similar earlier mark had expired before you registered yours and is then renewed or restored, you have a defence to infringement allegations for a fixed period (beginning with the date the other mark expired, and ending on the date on which its restoration was published on the IPO’s website), as long as you began using the mark in good faith. This is introduced because the IPO will no longer inform applicants of earlier marks that have expired and indeed will also no longer consider whether it is "just" to restore the trade mark (and will not consider other marks when decided whether to do so), simply whether your failure to renew was unintentional. The all means that when conducting a clearance search, you will now also need to check whether there is any conflict with recently expired marks (marks can be renewed or restored up to 12 months after the renewal date).
• Anti-counterfeiting measures: Greater scope for civil actions of enforcement against those preparing tags and security or authenticity features or devices, as well as labels and packaging to which trade marks are attached in an unauthorised fashion, prior to making counterfeit products (rather than recourse to criminal offences). The new provision applies where the risk exists that the packaging could be used in relation to goods AND services too, and where the person preparing the packaging is unaware that permission has not been granted. This will only apply to infringements carried out on or after 14 January 2019.
• Opposition - proof of use: Applications can be successfully opposed by the owner of a conflicting mark if that mark has been used in the last five years. The five year period now ends on the date the opposed application was made (or, if it has one, the date it claims international priority from, which may be up to six months earlier) as opposed to the date of publication of the application. As the IPO Guidance puts it: "If the owner of an earlier right opposes your application and you put them to proof of use, if they cannot show that they have made genuine use of their mark in that period, or they have no proper reasons for not using the mark, they will not be successful in their opposition". This change in the definition of the five year period comes into effect on 14 January 2019. It will apply to proceedings started on or after that date, but not to those started before then (new section 6A(1A))
• Rectifying the register: Any owner of a trade mark whose agent or representative has registered the trade mark in their name without permission can apply to rectify the register if it is already registered or oppose it if at the application stage. These options now apply to the owner whether they are UK based or not. New sections 5(6) and 47(2ZA).
• There are also provisions on collective trade mark ownership and rights to bring actions, and on division of trade mark registrations. See the UKIPO guidance on the impact of these new regulations here for further details.

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