New Trade Marks Regulations – getting tough on poor practice

The Trade Marks Regulations 2018 (the Regulations) come into effect this week and enhance the rights of trade mark owners under the Trade Marks Act 1994 (the Act).

The Regulations came into effect on 14 January 2019 and create new tools to help brand owners enforce their rights. Those who don’t actively monitor their use of trademarks, or comply with intellectual property rights, could fall foul of new offences.

Registering a new company?

Previously, companies could defend their use of a registered mark if it featured in their own company name, but this defence will now only be available to natural persons. Companies who register a name featuring a registered mark, risk committing a separate offence under section 10(4)(ca) of the Act.

It is not enough to do a ‘Google search’ to see if someone else is using your intended company name. Before incorporation, you should search the Intellectual Property Office’s register to see if a mark has been registered in the UK, and consider instructing a trademark attorney who has access to European and worldwide trade mark registers with advanced search facilities.

Selling a business?

From 14 January 2019, a business transfer will include any registered trademarks unless these are excluded from the contract of sale, or there is a clear presumption the marks should not be included (section 24(1A) of the Act). Sellers need to ensure that their registered marks are properly accounted for in the purchase price, or exclude them from the sale to avoid transfer at an undervalue.

Involved in a supply chain?

There are new offences designed to combat counterfeiting. Parties are at risk of infringing trade mark rights where they are involved in labelling, packaging, adding security or authenticity features, stocking, importing, exporting or placing goods on the market, even if they do not actually sell those items (section 10(3B) of the Act).

Licensing rights to another party?

Previously, any licencee could bring an action for infringement, unless the terms of their licence prevented them from doing so. Under the new Regulations:

• any licencee can call upon the licensor to take action against infringement;
• all licencees can take action themselves, if they have the consent of the licensor;
• only exclusive licencees may bring an action without the consent of the licensor, provided they called upon the licensor to take action against infringement and the licensor either refused, or failed to take action within 2 months.

These provisions extend to trade mark applications as well as infringement actions, and reverse the previous, default position. Licensors can restrict or waive these rights to control proceedings by drafting the relevant permissions into the licence.

Both exclusive and sole licencees can also intervene in proceedings and seek compensation where an infringement has affected them (section 30(6A) of the Act), and if successful, the owner of the mark must hold those damages on behalf of the licensee.

It is important that licensors act when called upon to protect their marks, either by taking direct action or granting licensees permission to act on their behalf. Both parties should review their current licence agreements to determine whether the default powers need to be updated.

There are many other changes brought in by the regulations which impact collective marks, advertising, the use of agents and the type of trade marks that can be registered.

Further information

For more information, or to discuss your intellectual property strategy, please contact Emma Watt.