Brand owners seeking to do business in Europe are well-advised to apply to register their key brands as trademarks. With the United Kingdom formally leaving the European Union as of January 31, brand owners seeking protection in the UK will have two choices: i) they can wait to extend their trademark registrations from the European Union pursuant to a transition process expected to be finalized in the year ahead; or ii) they can plan pro-actively to file UK trademark applications in the months ahead, before the "Brexit" transition is complete.

By way of background, the European Union trademark system grants European Union Trademarks (EUTMs). An EUTM is a single registration that gives its owner the exclusive right to use the trademark in all current and future member states of the European Union, a total of 28 jurisdictions today. The total cost of an EUTM can be as low as five thousand dollars, which makes it, arguably, the most cost-efficient trademark filing in the world. The UK, in contrast, offers a national trademark registration covering the UK only (England, Scotland, Wales, and Northern Ireland).

"Brexit" does not mean that the UK will leave the European Union trademark system right away. Instead, January 31 will mark the beginning of a transition period running until at least December 31, 2020. This transition period is in place to maintain the status quo until the end of the year or later, depending on how long it takes the UK and European Union to negotiate a comprehensive trade deal.

Existing UK trademark registrations should be unaffected by "Brexit."

Owners of EUTM registrations can expect that their trademark rights will be automatically extended to the UK once the "Brexit" transition process is complete. The EUTMs will have to have been registered before the end of the transition period, and any resulting UK trademark registrations will be for the exact same mark and the exact same products and services and will reflect the exact same filing and priority dates as the EUTMs.

Applications for EUTMs that have not matured to registration by the end of the transition period will not be automatically granted a comparable UK trademark registration. However, for nine months following the end of the transition period, owners of EUTM applications will be able to file a new UK trademark application and claim the filing date of their identical EUTM application that was still pending at the end of the transition period.

At the end of the transition period, EUTMs will only cover the remaining 27 European Union member states; they will no longer cover the UK.

With these developments in mind, we offer the following recommendations:

• Trademark rights are territorial. Don't assume that your trademark rights in the U.S. extend automatically to other countries.
• Most countries outside the U.S. grant trademark rights on a first-to-file basis.
• If the European Union and the UK are important markets for your business, it may be advisable to file new trademark applications for both European Union and UK protection, in the event EUTM registration is not granted by the end of the transition period. This is particularly prudent if the EUTM application is filed towards the end of the transition period.
• If possible, try to ensure that your pending EUTM applications are prosecuted as swiftly as possible. Try to resolve oppositions against EUTM applications before the end of the transition period so the applications will be automatically granted comparable UK registrations.
• If you are anticipating a dispute involving trademark rights in Europe, then make sure to seek advice, as "Brexit" will result in a number of strategic and tactical considerations.

We will continue to monitor developments during the transition period and will offer further updates, as necessary.