Legal guide

ROBIN HAYES

partner, Whitney Moore LLP

B r e x i t a n d t h e i m p o r t a t i o n o f t r a d e m a r k e d g o o d s f r o m t h e U K

Irish importers seeking to bring in goods from the UK for resale here must now take extra precautions to ensure they are not infringing IP rights, writes Robin Hayes, partner at Whitney Moore LLP, who explains how to avoid the potential pitfalls

After Brexit, it became unlawful to import IP-protected goods from the UK to the EEA without the consent of the rightowner except where the IP rights have become “exhausted”, writes Robin Hayes

FOR FURTHER INFORMATION:

Whitney Moore LLP, 2 Shelbourne Buildings, Crampton Avenue, Shelbourne Road, Ballsbridge, Dublin 4, D04 W3V6, Ireland. Telephone: +353 1 611 0000 Email: connect@whitneymoore.ie Brexit continues to cause confusion for Irish businesses, particularly those involved in the importation of IP-protected goods from the UK.

As we all know, the UK left the EU on 31 January 2020. At the end of the UK-EU transition period at midnight on 31 December 2020, it became unlawful to import IP-protected goods from the UK to the EEA* without the consent of the right-owner except where the IP rights have become “exhausted”.

exhaustion of ip rights

In trademark law, the owner of a registered trademark has exclusive rights to the trademark and those rights are infringed by the use of the trademark without the owner’s permission. Although the owner of a registered trademark has the exclusive right to apply its mark to particular goods, there comes a point where the law says that the owner can no longer control or interfere with dealings in those goods.

Once trademarked goods have been placed on the market anywhere in the EEA by or with the consent of the trademark owner, the IP rights in those particular goods are said to be exhausted and the goods can subsequently move freely throughout the Single Market without interference by the trademark owner. The principle of free movement of goods therefore creates opportunities for traders to engage in parallel imports of goods for which the IP rights have been exhausted.

Clearly, the question of whether it makes financial sense for a trader in Ireland to engage in the parallel importation of goods for which the IP rights are exhausted will depend on the price differential for the goods on the relevant EEA market compared to the price at which the goods are available on the Irish market, and after taking into account additional costs such as shipping. However, there are many occasions where such a financial incentive is present; for example, there is a thriving trade in the parallel importation of trade-marked pharmaceuticals goods. Provided that the trademark rights are exhausted, the trademark owner may not interfere with the further reselling of such goods including by means of parallel imports from one EEA jurisdiction to another.

the position before Brexit

Prior to Brexit, if trademarked goods were put on the market in the UK by or with the trademark owner’s consent, the trademark rights were exhausted throughout the whole of the EEA, including the UK, and vice versa.

after Brexit

The UK has left not only the EU but also the EEA. Now post-Brexit, if a trademarked good is put on the UK market by or with the trademark owner’s consent, the owner’s IP rights are not exhausted in the EEA. This means that since 1 January 2021 it is unlawful to parallel import trademark protected goods from the UK to the EEA unless the trademark owner has consented to such activity. This gives the trademark owner, and in some cases its licensees, the right to oppose the import of the goods into the EU, and to take legal action for trademark infringement against importers that do not obtain the prior consent of the trademark owner.

What can irish importers do?

Irish importers seeking to bring in goods from the UK market for the purpose of resale on the Irish market must now take extra precautions to ensure they are not infringing IP rights, or they could find themselves at the wrong end of a legal suit or their goods being seized at the border.

Firstly, businesses should review their supply chain and confirm if they are the first to import the goods into the EEA or if the particular goods have previously been sold elsewhere in the EEA. If an importer can obtain evidence that the trademark owner’s rights have been exhausted in the EEA, they are entitled to import those goods into Ireland for resale. If not, the importer should either ask the UK exporter to provide evidence of the trademark owner’s consent to the goods being placed on the EEA market (which could take the form of a contractual provision) or, if that is unavailable, seek the trademark owner’s consent, which will most likely involve negotiating a fee. Otherwise, businesses may be forced to adapt their models and look to other sources for their goods.

This article is not intended to be a complete statement of the law and specific legal advice should be sought on a case-by-case basis. ■