Replacement – a way to get your cloned trademark rights in the UK covered by your international registration?

Since 1 January 2021, EU trademarks (EUTMs) are no longer protected trademarks in the UK due to Brexit. In light hereof, the UK IPO created a comparable UK trade mark for all right holders with an existing EUTM. Consequently, you might now have 2 national UK trademarks. One comparable UK trade mark and an international trademark registration designating the UK. To solve this duality, the old principle of replacement comes into play, but is this effective? Is replacement useful? What are the advantages and disadvantages of this principle?

For a better understanding of the principle of replacement, we will outline in this article (i) what is meant by “replacement”, (ii) which steps need to be taken to implement this principle, (iii) what are the advantages, and (iv) what are the disadvantages.

1. What is “replacement” ?

The principle of replacement is an old principle dating back to 4 December 1900. This principle entails that a national or regional trademark registration in any designated territory of the Madrid Protocol, for example, a comparable UK trademark dd. 1 January 2015, is deemed to be replaced by an international registration such as an international registration covering the UK dd. 1 January 2020. This situation can only occur if all conditions, stipulated in article 4bis(1) of the Madrid Protocol, are cumulatively met.^[1] The international designation must:

• be in respect of the same trademark;
• be held by the same holder;
• list the same goods and services^[2]; and
• take effect after the date of the national/regional registration.

Furthermore, the international registration is deemed to replace the national or regional registration without prejudice to any rights acquired by virtue of the latter.^[3] This means that once replacement has taken place, the holder essentially has two rights – one at the national/regional level and one at the international level, as long as it is renewed by the holder.^[4]

2. Which steps need to be taken?

Article 4bis(2) of the Madrid Protocol provides that “the office in whose national or regional register the mark is recorded, is required, upon request, to take note in its register of the international registration”.

From the wording of this article, it is clear that this should not be interpreted as a mandatory requirement to benefit from replacement, which is deemed to take place automatically after the UK has been designated in international registration.^[5] The holder is not required to do anything. However, it is possible for the holder of the international registration to request the relevant national/regional IP Office to take note of the replacement.^[6] Particularly in the UK, requesting the recordal of a replacement of a UK national registration is a relatively straightforward process and can be done at any time after the international mark achieves protected status in the UK.^[7]

The owner (or its representative) will have to file a Form TM28 ‘Application to record a concurrent registration’ at the UK IPO.^[8] If the UK IPO is convinced that all requirements are fulfilled, it informs the World Intellectual Property Organization (hereinafter ‘WIPO’) which maintains the international trade mark register.^[9] If the notification complies with the prescribed requirements WIPO confirms the replacement to the owner and records it on the international register.^[10]

However, the Madrid Protocol does not elaborate further on the effects of replacement or the exact reasons such replacement is advantageous.

3. What are the advantages of replacement?

The three main advantages of replacement are (1) the centralization of your trademark, (2) the saving of renewal fees, and (3) the application of a new grace period for use. We will now elaborate a bit further on these advantages:

• (1) Centralized management: This replacement allows the holder to regain the advantages of centralized management at WIPO.^[11] For example, updating the owner’s name or address, change of names, assignments and renewals can be recorded at the same time which reduces the costs.^[12]
• (2) Renewal savings: After replacement , the owner of the replaced UK trademark is able to renew its international registration through WIPO, without renewing the separate UK registration.^[13] The owner may then choose to let its national registration lapse when it is due for renewal since its rights will continue to be embodied in the international registration.^[14] This should result in some financial savings for the owner since the owner only has to pay renewal fees once instead of twice.^[15]
• (3) New grace period for use: In addition, the replaced UK trademark will have a new five-year grace period for use that is calculated from its date of protection in the UK and will, therefore, take advantage of the earlier priority or filing date of the UK national registration.^[16]

However, from the above it seems that the principle is easy to apply and has many advantages. This is also the way the UK IPO, WIPO and the current doctrine presents the principle of replacement to the public. They only see the principle as something good, but neglect the disadvantages.

4. The disadvantages of replacement

We believe, just like A. King, that the other side of the story should not be underexposed. The main disadvantages are related to (1) the filing costs, (2) the examination and publication of the subsequent designation, (3) the scope of the subsequent designation after the examination, and (4) the dependency period. Below we will explain these disadvantages further.^[17]

• (1) Cost: the trademark owner must keep in mind the cost involved for filing a subsequent designation for the UK under the existing international registration.
• (2) Examination and publication risks:  the new UK subsequent designation must first be examined and then published for opposition purposes before the Statement of Grant of Protection will be issued.^[18] Any problems that arise at these stages could, at worst, jeopardize the entire replacement strategy. In addition, the cost of responding to any such issues will reduce the financial attractiveness of the replacement.
• (3) Scope: after examination, publication and/or opposition, it is possible that the new UK subsequent designation might have undergone significant changes to the goods and/or services which it protects. Therefore, replacement might not be possible anymore.
• (4) Dependency period: not the least important but a clear disadvantage is the dependency between the international registration and the national/regional registration that serves as its basis during the first five-year period. If the replacement has taken place just before cancellation of the basis trademark, you will lose both national UK trademarks. It is therefore advisable to renew the national/regional registration that is to be replaced if the dependency period is still ongoing instead of replacing it.

In our opinion, these disadvantages should not be underestimated. As stipulated above, replacement cannot only cost you a lot of money, but also can lead to a limitation or worst case scenario to the termination of your protection in the UK. Therefore, integrating the principle of replacement in your IP strategy is not without risk and should be assessed case-by-case.

We look forward to the evolution of this principle in practice and are happy to assist you if you would have any questions or comments.