Cayman Islands: Review of New Transitional Provisions

The Cabinet of the Cayman Islands issued the Trade Marks (Transitional Provisions) Regulations, 2017 (the “Transitional Provisions”). The Trade Marks Law, 2016 (the “2016 Law”) was passed in November of last year and went into effect on August 1, 2017. The Cabinet issued all other relevant regulations when it established the effective date of the 2016 Law in May 2017. However, the Cabinet only released the Transitional Provisions on July 28, 2017, leaving mark owners with only one business day in the interim between publication and effective date.
 
With a few exceptions, the Transitional Provisions provide that matters pending before the registry or the courts on August 1, 2017, will “continue to be dealt with under the repealed provisions”, i.e., the Patents and Trade Marks Law, 2011 (the “2011 Law”). Exceptions include pending applications for assignment and license recordation. In both instances, the Registrar must treat a pending application as if made under the 2016 Law and may require amendments to the application to comply with the 2016 Law.

The Registrar must automatically transfer marks currently registered under the 2011 Law to the Register established by the 2016 Law. These marks will continue as registered until their renewal dates as established under the 2011 Law (i.e., the renewal dates of the UK registration, EUTM, or International Registration used as their basis). Disclaimers, conditions, and restrictions remain with the transferred marks. Pending applications for registration made before August 1, 2017 will be treated as a registration under the 2011 Law. Such marks will then automatically become a part of the new Register as described above.
 
Notwithstanding the relatively straightforward transfer of existing marks, the Transitional Provisions require the Registrar to “take such steps as may be necessary to ensure that” transferred marks are “not at variance with the absolute or the relative grounds for refusal of registration” under the 2016 Law and “otherwise consistent” with the 2016 Law. The likelihood and timing of any such mandated review remains unknown. If any invalidity proceedings result from this process, the 2016 Law will govern the process.

Applications for renewal leave some issues unclear. What is clear is that renewals filed before August 1, 2017 should result in a renewal under the 2011 Law, which will then be treated as described above and automatically transferred to the new Register. The next renewal would then be governed by the 2016 Law but with the renewal date established by the 2011 Law (i.e., the next renewal date of the corresponding UK registration, EUTM, or International Registration). In other words, the next renewal date will be that as would have been previously expected.
 
Also, renewals due after August 1, 2017 and filed after August 1st will proceed according to the provisions of the 2016 Law. The 2016 Law, which does not require a renewal of the UK rights, provides that rights will lapse after the expiration date but may be restored within six months.
 
What lacks clarity is how the Registry will treat some late applications for renewal under the new law. The 2011 Law allowed local renewal so long as the underlying trademark rights had already been renewed. Although not an official grace period, it was understood that renewals could be completed after the renewal date. However, the Transitional Provisions provide that the 2016 Law will apply to all applications for renewal made on or after August 1, 2017.

The abrupt transition regarding renewal application treatment, with one business day of notice, created a Catch-22 scenario for some mark holders whose renewal was due prior to August 1st but had not yet filed in Cayman Islands as of that date, as they were still awaiting confirmation of the renewal of the underlying registration. Fortunately, the previously enacted regulations for the 2016 Law provide the Registrar with a permissive authority to restore marks outside the grace period. Nonetheless, how the Registrar will treat lapsed marks in this scenario remains to be seen. Prudent mark holders should apply for renewal of any such marks with haste and argue that the six-month grace period of the 2016 Law applies to their renewal, if timely.
 
Finally, the Transitional Provisions provide that any use that would not constitute infringement under the 2011 Law of a mark registered under the 2011 Law will not constitute infringement of the same mark under the 2016 Law. Reregistering the mark will not prevent this exception to infringement’s application.

If you have any questions, please write to Caribbean IP at Katherine@Caribbean-IP.com.