Draft Trade Marks (Amendment) Regulations 2022

Dean Russell Excerpts

Wednesday 26th October 2022 General Committees

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Dean Russell)]

I beg to move,

That the Committee has considered the draft Trade Marks (Amendment) Regulations 2022.

The regulations were laid before the House on 19 July. It is a pleasure to serve under your chairmanship, Mr Mundell.

Intellectual property has played a vital role in the UK economy. A well-balanced and effective IP system supports our citizens in their creativity and ingenuity. It helps ensure that great ideas can be turned into great businesses. The draft regulations relate to a special type of intellectual property: well-known marks. This is a particular branch of the UK’s trademark system.

A well-known mark is one that is considered reputable, and which the general public commonly knows about; examples are Rolex and Coca-Cola. Trademark law gives special protection to these marks in the light of the recognition that they receive and their reputation, irrespective of whether they are registered in the UK.

The UK protects well-known marks through a combination of trademark legislation and common law. The changes in this statutory instrument are technical amendments to the trademark legislation, namely the Trade Marks Act 1994. The amendments will further clarify the robust protection afforded to well-known marks in UK law.

The main impetus behind the changes is the need to ensure that the UK delivers on its obligations in the EU-UK trade and co-operation agreement. It is important to share some extra context. It was the UK that sought these robust provisions in the TCA. The TCA places a binding commitment on both parties to apply an international standard for well-known marks: the World Intellectual Property Organisation’s joint recommendation on the protection of well-known marks. That set of international standards was adopted in 1999. The UK was a strong proponent of that standard-setting document, and contributed a member to the committee of experts that led on its preparation between 1995 and 1997.

The SI makes two changes to the Trade Marks Act 1994. First, it will give holders of unregistered WKMs the right to prohibit the use of a conflicting trademark on dissimilar goods or services. That measure builds on provisions we already have to stop the use of a conflicting trademark on the same or similar goods or services. To give an example, under the new, amended law, a holder of an unregistered well-known mark, such as the famous Rolls-Royce brand, could rely on well-known mark provisions if its name was unjustly used not only on cars and similar goods, but on sports equipment or even domestic cleaning products. I have not bought a Rolls-Royce bar of soap, but perhaps they exist. The new remedy applies where such use is likely to damage Rolls-Royce’s interests or takes unfair advantage of the distinctive character or repute of the Rolls-Royce mark.

Secondly, the SI will amend a nuance in existing trademark law. Current well-known mark provisions are targeted at nationals of third countries, but exclude those of the UK. Historically, UK-based individuals and businesses have been able to rely on alternative provisions in common law and in the 1994 Act to enforce their rights. For example, where they hold a registered mark, they can seek recourse through the tort of passing off. However, we are taking this opportunity to extend the well-known mark provisions to ensure that the new remedy, and the existing well-known mark provisions in the 1994 Act, include the UK.

The changes will render the UK fully compliant with obligations in the EU-UK TCA. However, the benefits will extend further: they will place the UK in the best position to negotiate protection for the well-known marks of British companies in future trade agreements. I have detailed the benefits that the changes will bring to holders of well-known marks, through the new remedy for unregistered mark holders, and the harmonisation of the well-known mark provisions so that UK nationals can enjoy the same benefits as those provided to third-country nationals.

As for the practical implications of the regulations, the impact on the number of cases taken to the Intellectual Property Office tribunal or the courts is anticipated to be modest. During policy preparation for the instrument, research into tribunal cases before the Intellectual Property Office found that there were approximately 12 similar cases a year dealing with well-known marks, and just a fragment of those would ever be expected to reach the courts. That is primarily due to the specific characterisations of well-known marks, and the niche nature of those IP rights.

We do not mistake the importance of these changes, and I hope colleagues will not either. Even putting important international obligations aside, stakeholders have confirmed that the provisions are a welcome addition to trademark law. With that in mind, the Intellectual Property Office will prepare guidance to ensure that businesses that fall within the scope of these changes can manage any impact or, where appropriate, can make the most of the new remedies.

To conclude, the regulations make changes to a niche area of trademark law, but are an important development for the UK’s trademark system. They will ensure the effective protection of unregistered well-known marks, and that the UK meets its international commitments. I commend the instrument to the Committee.

--- Later in debate ---

[Dean Russell]

I thank the hon. Lady for her excellent speech and excellent questions. I will do my best to cover as many as I can; I hope to cover most of them, but if I do not, I assure her that I will follow up in writing.

From my experience of working in the digital field and, partly, in branding, I know how much effort, time and money goes into these things. This is also an issue of trust. I believe that the hon. Lady used to work at Ofcom, so she understands the importance of this industry; she has a weight of experience, and that came through in her speech.

As I detailed, a well-known mark is a niche but special form of intellectual property. It is important to highlight that the provisions are not just about safeguarding exclusive or luxury names; they apply to all known well-known marks, including those of everyday services or goods, such as Google or Coca-Cola. The changes are highly technical, but stakeholders confirm that they represent a welcome addition to trademark law.

I will again summarise the benefits that the changes will bring to holders of well-known marks: there will be a new remedy for unregistered mark holders where their mark is being used on dissimilar goods or services, and harmonisation of well-known mark provisions to ensure that UK nationals can access the same benefits as those provided to third-country nationals.

In yesterday’s debate on the regulations in the other place, a question was asked about what exactly a well-known mark is and whether that might change over time. This is not an exact science. We have deliberately resisted enshrining a definition of a well-known mark in legislation, because it has developed over time in case law. The judiciary uses discretion and considers a variety of factors when determining whether a mark is well known. In the High Court decision in Hotel Cipriani SRL v. Cipriani (Grosvenor Street) Ltd, Mr Justice Arnold, as he then was, referenced the six criteria cited in the WIPO joint recommendation, which forms the basis for the test of whether a mark is well known. The criteria include the degree of recognition, the use of the mark, how the mark is promoted or enforced, and the value associated with the mark.

I will now endeavour to respond to the excellent questions raised. One was about compliance, and why the issue was not addressed sooner. The UK already has extensive provisions in place for well-known marks, and they work well. They are provided through a combination of the Trade Marks Act 1994 and common law—in particular, the tort of passing off. The technical amendments in the regulations top up those provisions, so that all possible permutations of conflict between marks are covered, as suggested by the joint recommendation. The need for these changes was not identified until after the TCA; we seek to implement them as soon as possible, once they are approved.

The hon. Lady asked about the 121 cases referred to in the explanatory memorandum. That is the number of cases that have been through the Intellectual Property Office’s tribunal in the past 10 years relating to well-known marks, and that have made use of existing provisions. That equates to approximately 12 cases a year. Of those, approximately four per year involved unregistered marks, and so would fall into the group of cases, involving well-known mark holders, in which use could be made of the new remedy. Based on those numbers, the changes are expected to have a modest impact; we expect approximately one additional court case every 50 years. I will double-check that, but I think it is not bad. We will of course monitor the impact of the change in the usual way.

On whether a detailed impact assessment has been produced on these changes, it is estimated that the impact will fall below the threshold required for full assessment. The statutory instrument will remedy unforeseen compliance issues caused by the ratification of the TCA. As mentioned, the changes are expected to have a modest, practical impact, and a minimal impact on the number of cases brought to court.

Finally, a concern was raised about foreign IP practitioners taking work away from UK attorneys. I reassure the hon. Lady that the IPO has a close working relationship with the Chartered Institute of Trade Mark Attorneys and will consider the issues that it raises, together with the Ministry of Justice, which leads on legal services policies.

I reiterate the hon. Lady’s excellent point about the importance of the creative industries. I echo her point that the creative industries and creators are very much the lifeblood of the UK; we are known around the world for our films, creative industries, artists and musicians, and I feel strongly that we have to make sure that we support them. I hope that my answers have been helpful to the Committee. I will follow up in writing if I have missed anything. As was noted, the regulations make changes to a very specialised area of law, and will play an essential role in our meeting our international obligations and ensuring effective protection for unregistered well-known marks in the UK. I hope that the Committee will support the regulations; it sounds as though it will.

Question put and agreed to.