The Trade Mark Directive (2015/2436/EU) has been implemented into UK law by the Trade Mark Regulations 2018 (the "Regulations") and came into force on 14 January 2019. The Regulations amend the Trade Marks Act 1994 (the "Act") and Trade Mark Rules 2008.
The new rules arm trademark owners with better powers to prevent suspected counterfeit goods using their trademark, and in transit through the UK to countries outside the EU.
A trademark owner can request a customs authority (e.g. HM Revenue and Customs) to detain goods passing through the UK where there is sufficient suspicion of counterfeiting. Previously, a trademark owner had to prove the goods would have been put on sale in the UK. This placed a high evidential burden on trademark owners leading to a decrease in seizures of counterfeit goods.
The amended Act reverses the burden of proof and requires the importer (and potential infringer) to prove the trademark owner is not entitled to stop the goods from being marketed in the country of destination.
Infringement and Enforcement
The Regulations make changes to the rights of enforcement that trademark owners may use to protect their registered rights.
The use of a trade or company name is now specifically included within the list of infringing acts. The "own name" defence will only apply to use of a personal name and not a company name. This will help protect trademark owners from infringers who register companies hoping to secure an unjustified payment to transfer such registration.
Trademark licences will usually contain a scope setting out how, when, where and for how long a licensee can use a registered mark. Should the licensee breach the terms of the licence, the licensor will have a contractual right to sue for breach of contract and require the licensee to cease its infringing action and/or seek damages from the licensee.
The new rules provide a licensor with a new statutory cause of action to enforce its trademark against a licensee that contravenes provisions relating to:
• the form in which the mark may be used;
• the scope of goods/services for which the licence is granted;
• territory; and
• quality of the goods/services.
This new right applies to breaches committed on or after 14 January 2019, notwithstanding the date of the licence.
Licensees' Rights – Infringement
New rules have been introduced as to when a licensee can commence legal proceedings for trademark infringement.
Under the amended rules, an exclusive licensee can bring an action for enforcement where it has called for the licensor to do so and the licensor has either refused or failed to do so within two months. Unless the contract expressly contains this right, a non-exclusive licensee will only have the right to commence enforcement proceedings with the licensor's permission.
The Regulations also introduce a new statutory right allowing a licensee to intervene in infringement proceedings to seek compensation for losses suffered as a result of the infringement. Previously, the courts only had to take into account the loss suffered by the licensee when awarding damages to the trademark owner.
To ensure their trademark portfolios are sufficiently protected, trademark owners should consider updating their standard documents to capture the new statutory right to enforce a trademark against a licensee who breaches certain licence terms.
Trademark owners should also be aware of a licensee's right to intervene in infringement proceedings and consider the licensee's rights at the outset of an infringement action.
The Regulations and the Act are part of UK law and will remain in force after 29 March 2019.
Authored by Robert Jackson (Solicitor), Craig Chaplin (Partner), and James Lonsdale (Partner).