by Stephen Chow
Opportunities in the UK
Even though the relative importance of the United Kingdom to Australian businesses might have declined over the years, it nevertheless remains a favoured destination. A similar culture and legal system, as well as the lack of a language barrier make entry into the UK relatively straightforward for Australian businesses. The impending Brexit might also present Australian businesses with new opportunities
The UK is currently the 5th biggest trading partner with Australia, being Australia’s most important trading partner in Europe by far. Even with the uncertainty surrounding Brexit, the UK would likely remain an important gateway into the European market.
Whilst export to the UK is dominated by precious metals and coal, Australia also exports a substantial amount of agricultural products to the UK. In 2016, the UK was the number one destination for Australian wine by volume. Growth in premium wines is also robust. On the other hand, the UK is also an important consumer of high-quality Australian meat.[1]
Trade Mark Protection in the UK
Trade mark laws in the UK are substantially similar to those in Australia. The most significant difference is that the laws in the UK offer substantially more protection to trade marks with a reputation in the UK, in line with EU Law.
Trade mark laws in Australia are governed by the principle that trade marks predominantly serve as an indication of origin. As such, an infringement action can only be brought when the defendant has used a mark is substantially identical with or deceptively similar to a proprietor’s registered mark. The same is true for opposing of accepted new trade mark applications.
In the UK, however, the law recognises that, in addition to being an indication of origin, trade marks are also the result of substantial investment by trade mark owners, and serve an important advertising function. As such, reputable trade marks are protected from the use of similar marks, which even though do not cause confusion, would nevertheless take unfair advantage of a registered trade mark, tarnish its reputation, or erode its distinctive character.
For instance, Thomas Pink, a well-known shirt maker in the UK, brought a successful action against Victoria’s Secret when it launched a new line “PINK” in the UK. In addition to a likelihood of confusion, the court also found that Victoria’s Secret’s “sexy, mass market” image would adversely affect Thomas Pink’s luxurious reputation. Moreover, if Victoria’s Secret continues to increase its use of the word “PINK” in relation to its products, the word “PINK” would no longer designate the brand Thomas Pink exclusively, thus eroding its distinctive character.
In short, there is a possibility that your trade mark registration, despite being accepted by the Australian authority, may be rejected in the UK for similarity with a reputable mark.
How to Protect Your Trade Mark in the UK
Courts in the UK will not enforce an Australian trademark. There are, however, three ways to obtain trade mark protection in the UK.
Firstly, you may register your trade mark directly with the UK Intellectual Property Office. This is the most inexpensive option, with fees starting from £170.
If your intention is to eventually expand into the European market, you may choose to register a European Union trade mark (EUTM) instead. A EUTM will give you rights and protections across all 28 member states of the EU, including the United Kingdom. Fees are substantially higher, however, costing upwards of €850. The choice between registering with the UK office and the EU office would likely depend on how many European countries your business intends to operate in.
With the date of Brexit drawing closer, the UK and the EU has agreed to granting holders of EUTMs trade mark rights in the UK without re-examination.[2] As such, at this point in time, there does not seem to be any need to double file.
Finally, if you already have a registered trademark in another country, you may apply for trade mark protection in the UK through the World Intellectual Property Organisation (WIPO). The advantage of this is, in addition to the UK, you may also apply for protection in countries outside Europe in the same application. The basic fee is 653 Swiss Francs, in addition to the individual fees for the countries you designate. For the EU, this is CHF 897, whereas for UK only, it is CHF 227. Even with Brexit, the UK has agreed to ensure that trade marks that have been granted protections in the EU through WIPO would continue to enjoy protections in the UK after the UK leaves the EU.[3]
Keyword Advertising
Businesses are increasingly utilising keyword advertising on search engines. In recent years, European and British courts have started addressing the issues involved.
A good example is Interflora, which operates a flower delivery service. Marks & Spencer, which also offers this service, used Google AdWords such that when an Internet user searches for the term “Interflora”, the website of M&S would come up in the results.
In this case, the Court of Justice of the European Union (CJEU) held that trade mark rights would be infringed where the use of AdWords adversely affects any of the trade mark functions, that is, an indication of origin, investment, and advertising. In particular, where a reasonably well-informed and reasonably observant Internet user would not be able to ascertain without difficult whether the goods and services that came up in the search belonged to the trade mark holder or a third party, a case of infringement would be made out.
Parallel Importations
Once a trade mark owner has put the goods into the market, its trade mark rights are said to be “exhausted”. This means that any one can resell these products even though they are not the trade mark owner.
In other common law countries, exhaustion happens internationally. This means that, once the goods have been released into an Overseas market, a trader may resell these goods in Australia, even if the original manufacturer also holds a trade mark in Australia. This practice is otherwise known as “parallel importation”.
The reason behind parallel importations is that businesses often use price differentiations in different markets, depending on the local demand and supply, in order to maximise their profits. Third-party traders, on the other hand, try to exploit the price difference.
The doctrine of exhaustion, however, applies differently in the context of the EU. The CJEU has held that exhaustion only applies within the EU. This means that goods released in markets outside the EU cannot be resold in the EU without the permission of the trade mark holder.
For businesses operating in the UK as well as countries outside the EU, registering your trade mark would allow you to stop these parallel importations without compromising on your price differentiation.
Brexit
On 29th March 2017, the UK invoked Article 50. Unless the UK and the EU reach an agreement to delay the process, the UK would cease to be a member of the EU from 30th March 2019.
Even though there is much uncertainty surrounding the exit from the EU, it could also present Australian businesses with new opportunities. Historically, the UK was a major importer of Australian agricultural products. This only changed when the UK joined the then European Economic Community (EEC).
At present, the EU sets a common external tariff for all its Member States. As such, the UK is unable to negotiate trade deals with other countries. With Brexit, however, if the UK chooses not to join the European Economic Area (EEA) or European Union Customs Union (EUCU), the UK would be free to negotiate a more favourable deal with Australia, which happens to be a long-standing Commonwealth trading partner.
As for the law, negotiations between the EU and the UK seem to suggest that there would be a transition period until the end of 2020, where EU Laws would continue to apply. Following that, Brexit would have two main implications. Firstly, since EUTMs are only effective within the EU, Brexit would mean that EUTMs would cease to have any effect in the UK unless an arrangement is made where the UK would continue to be part of the EUTM system despite not being an EU member. Nevertheless, the UK and the EU have agreed that holders of EUTMs would have their trade marks registered in the UK without re-examination before Brexit happens. This would apply to all EUTMs registered before the end of the transition period. On a similar vein, trade marks filed with WIPO designating the EU would also continue to enjoy protection in the UK, provided that this is done before the transition period has expired.[4]
The second implication is that the CJEU would cease to bind the UK. This means that the UK is free to adopt rules that are more favourable to the UK. A notable example is the rule on parallel importations. The UK tried to circumvent the EU interpretation initially, but this attempt was struck down by the CJEU.
In light of the above, a trade mark registration in the United Kingdom is strongly recommended, as part of a holistic Intellectual Property filing strategy.
[1]https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Foreign_Affairs_Defence_and_Trade/tradewithUK/Interim_Report/section?id=committees%2Freportjnt%2F024101%2F25066
[2] https://ec.europa.eu/commission/sites/beta-political/files/draft_agreement_coloured.pdf
[3] Ibid.
[4] Ibid.
