Significant changes to the law relating to registered trade marks in the United Kingdom will take effect on 14 January 2019. Based on an EU Directive which comes into force through the Trade Mark Regulations 2018, they will apply irrespective of Brexit unless subsequent legislation is enacted.
So, what are the general implications for trade mark owners and business owners?
Where a business that uses registered trade marks is transferred by an asset sale after 14 January 2019, this action will include an obligation to automatically transfer any registered trade mark to the buyer unless any registered trade marks are specifically excludes from the contract for sale.
Interesting questions arise where the seller has a registered trade mark in a number of different classes of goods and/or services and sells part only of its business relating to a specific class but not all classes within the registration. The legislation does not address this issue but does provide that the presumption that trade mark transfers shall not apply ‘where… it is clear in all the circumstances that this presumption should not apply’. This is not particularly helpful, and any seller of a business should make sure that the contract for sale expressly reserves any registered trade mark it wishes to keep.
Previously, a defence to any claim for trade mark infringement was if the alleged infringing trade mark formed part of a corporate name or a person’s name. It will now become an act of infringement to use a trade mark as part of a corporate name and the own name defence will only be available to natural persons (i.e. individuals as opposed to organisations). These changes will make it easier to stop the illegitimate practice of forming companies with corporate names containing registered marks and seeking payment from the registered trade mark owner to change the name. If you are registering a new company name, it is important to check the Register of Trade Marks to make sure your preferred name is not also registered as a trade mark.
Licensees of registered trade marks have been given an important new right to intervene in infringement proceedings brought by the registered owner to claim compensation from the infringer, if they can show that the infringement has caused them loss.
An exclusive licensee will now be able to call on a trade mark owner to take infringement proceedings if the infringement affects their interests. Previously, this obligation on the part of the trade mark owner could be excluded by the terms of the license agreement. If the trade mark owner refuses to take action or fails do so within two months of the request, the exclusive licensee can issue proceedings in his own name as if he were the trade mark owner. However, non-exclusive licensees have been negatively impacted by the changes and, if they wish to call on the registered owner to bring proceedings, they must secure the right in the license agreement.