Protecting the brand: what does Brexit mean for trademarks?

Brexit has raised a variety of uncertainties around the drinks industry, and how to ensure its continued safety in the wake of changing regulations and agreements. But, one of the less explored areas is how such changes may affect trademarks and intellectual property. Callum Tyndall investigates.

The process by which the UK will exit the European Union has been drawn out interminably, mired in political infighting and the genuine complexities of an unprecedented secession. A core issue for the transition will be the management of law and regulation, specifically which laws and regulations will be carried over and how they will function once the UK is no longer a member state of the EU. Understandably, some of the key areas of concern have been essential goods such as medicine and consumables. For both businesses and consumers, it is vital that these items can still be accessed with ease and assumption of safety.

With more than a million UK companies having trademarks registered in the EU, there is a clear economic case as to why certain stability needs to be maintained. The government has committed to an automatic division of established European trademarks, with businesses operating an EU mark and a UK mark post-Brexit rather than one consolidated trademark. A no-deal Brexit would complicate the matter but the government has claimed it intends to grant EU trademark holders an equivalent UK-registered replacement in the case of no deal. Much will depend on the final agreement, or lack thereof, and the management of the UK’s legal transition. 

Brand protection in a Brexit environment

In essence, trademarks protect brands. Whether in the UK or abroad, trademarks serve as a means of legal recourse for brands to claim ownership over their products and the elements that are associated with defining that product. Given the work that goes into making a product definitive or iconic, and establishing that product within a competitive field, it is no surprise that brands would then be intensely protective of that product. 

Ed Meikle, partner in intellectual property DWF, explains: “Across industry, significant sums of money are spent on marketing and promoting the brands we all know and love. To protect this investment – and to stop competitors from copying what they are doing – these companies also invest heavily in legally protecting their brands and enforcing their intellectual property rights.  

It is hard to be confident that the investment companies have placed into trademarks will meet with appropriate compensation in the post-Brexit environment

He continues: “To do this, they apply to register trademarks which protect not only product names, such as Ben & Jerry’s, but also their logos, colours, slogans, even the shape of packaging and occasionally the shape of the products themselves. Trademarks can also apply to specially protected names relating to where products are made - for example, Champagne, Melton Mowbray pork pies, Arbroath Smokies and Cornish Clotted Cream.”

As it currently stands, brands can safely market their products across Europe knowing that they have consolidated protection on that product. While in theory, the post-Brexit solution of separate trademarks should prove sufficiently equitable in its protection, it seems likely that brands would find a split trademark to complicate matters. With the ramshackle progress of Brexit negotiations so far, it is hard to be confident that the investment companies have placed into trademarks will meet with appropriate compensation in the post-Brexit environment. 

The threat to PDO products and consumer peace of mind

Outside of whether or not brands will find the value of their trademarks diminished by Brexit is the matter of how changes to trademarks will affect consumers. With talk of stockpiling in the event of a no-deal Brexit painting a picture of panic, it is easy to appreciate that consumers require some reassurance when it comes to the future safety of their products. If trademarks are being divided, and thus coming under separate regulation, do consumers need to worry that the products themselves will change?

There is the risk of consumers facing a deluge of new copycat products from within the U

In particular, it is worth considering products such as those awarded protected designation of origin (PDO). Products certified PDO must come from a specified region, their quality must be significantly determined by the geographical environment, and their production, processing and preparation must take place within the determined geographical area. In the UK this includes products such as Cornish clotted cream but, given that PDO is an EU scheme, post-Brexit the designation may well disappear and open up the market to a host of doppelgangers.

Paul Wheeler, general manager at Elementar UK, says, “One of the main concerns for consumers is how leaving the UK will affect the quality of our food and drink. This, of course, could go either way. But where PDO products are concerned, there is the risk of consumers facing a deluge of new copycat products from within the UK that promise the same quality as the products they emulate, but have not necessarily been produced with the same time-tested techniques or ingredients. There is also the risk of shoppers in the UK purchasing lower-standard goods that have been produced in any other country with which the UK strikes a trade deal post-Brexit.”

Complications of a no-deal Brexit

While such copycats may provide consumers with cheaper alternatives to PDO products that may have seen prestige elevate their pricing, those self-same consumers will also be picking up products that are suddenly able to claim the name of a PDO product without abiding by the same standards. Moreover, if mass-production competitors look to enter the race there is also the risk that smaller, heritage producers will be put out of business. The loss could be not just economic, but cultural.

Wheeler continued, “Brexit's effect on PDO products in the UK could, therefore, prove highly damaging. Hopefully, a new structure will be put in place that offers the same level of protection as that afforded by the European Union; if not, the future of protection in the UK will be a lot less certain.”

The UK Intellectual Property Office has reported that it has seen a significant increase in UK filings

Unfortunately, it is hard to accurately predict the full scope of the issue as long as Brexit remains in its current murk of negotiations. A no-deal exit would likely leave brands in a trickier situation, forced to register in both the EU and the UK and hope that schemes such as the PDO are replicated to some extent in the UK. With, at the time of writing, the candidates for the premiership of the UK refusing to take a no-deal Brexit off the table, the future of trademark security is uncertain.

As Meikle summarised: “Things are less clear in the medium to long term if there is no deal. To guard against this, many businesses have chosen to register their trademarks both in the UK and in the EU, and – as a result of this - the UK Intellectual Property Office has reported that it has seen a significant increase in UK filings.

“There has also been some speculation that one of the side effects of Brexit could be an increase of grey imports into the UK, an issue which isn't confined to clothing and footwear, but also the food [and drink] industry. That said, it is an issue which has been identified and recognised as a potential problem and steps are being discussed to address this.”

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