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Trade mark reform and 'living wage' among big changes for retailers

Out-Law Analysis | 16 Feb 2016 | 4:30 pm | 3 min. read

FOCUS: New EU trade mark rules, changes to the minimum wage laws and a new regulatory regime for internet payments are among the legal and regulatory changes retailers need to be aware of over the coming months.

Businesses offering goods for sale online to customers in different countries, or those with physical shops in multiple locations should pay particular attention to these changes, and seek local legal advice where necessary.

EU trade mark rules are changing

The EU's new Trade Mark Directive and Community Trade Mark Regulation were published in the Official Journal of the European Union at the end of last year. EU member states now have up to three years to implement the directive into their national legislations, while most of the provisions of the directly-applicable regulation will come into force on 23 March 2016.

The new rules will harmonise trade mark registration procedures across the EU, including at national trade mark registries; and introduce a new procedure allowing businesses to challenge applications for or already-registered trade marks before national trade mark registries without having to go to court.

Retailers should check that all their brands, store get-ups and main product lines are protected – but be careful not to get conned by scammers sending fake trade mark renewal demands from the 'new' EU trade mark office.

New UK National Living Wage

The UK's new National Living Wage (NLW) is due to come into force in April 2016 at a rate of £7.20 an hour, rising to £9 per hour from 2020. The new rate will be introduced by way of a premium on top of the existing National Minimum Wage (NMW) for employees aged 25 and over. The NMW will continue to set minimum pay levels for younger workers.

The government has promised an increased budget for enforcement and increased penalties for non-payment of the NMW and new NLW, although the overall maximum penalty of £20,000 per worker remains unchanged. Retailers must therefore ensure that their wage policies are compliant with the new rules, and review their impact on the overall employee wage bill and the business.

The UK referendum on EU membership

Nobody yet knows when the planned UK referendum on EU membership takes place, whether the referendum will result in UK withdrawal from the union or what form that would take.

Retailers should prepare by reviewing their contracts and ensuring that, so far as possible, these are 'future-proofed' against any potential UK withdrawal from the EU. Issues worth considering include currency, defining the EU and options to renegotiate terms if a commercial agreement becomes unprofitable in the event of a 'Brexit'.

Stricter regulation of internet payments

Retailers may already be aware of the EU's new Payment Services Directive (PSD2), which must be implemented into national laws to come into force from 13 January 2018. However, similar rules to strengthen consumer protection and security and introduce new requirements for internet payment providers are already in effect in Germany.

For example, Germany has already introduced a requirement for 'strong customer authentication' requiring a two-factor process before payment can take place, so 'one-click' online payment systems will no longer be sufficient. Online retailers with customers in Germany need to check that their systems and payment providers are up to date and compliant now.

New EU General Data Protection Regulation

New EU rules on data protection are expected to be agreed and adopted in early 2016. Retailers should use the period before the rules come into force in 2018 to prepare, as the regulation will introduce a number of new requirements from a cyber security perspective. For example, should you suffer a data breach, make sure you are ready to notify consumers and regulators within 72 hours. Keep up to date with the developing regulation on Out-Law.com.

Fines under the new rules could be as much as the higher of €20 million or 4% of total worldwide annual turnover – avoid them by ensuring you are able to meet the new requirements.

Online retail

Although the internet may have no borders, local regulations do impact on online retailers. Various governments are planning to introduce rules to deal with online retailers during 2016, for example in the UAE/Gulf region and in France. Seek local legal advice to ensure you comply.

Focus on use of store space

Many retailers this year will be open to developing lifestyle spaces in stores - whether gyms, leisure facilities or workspaces. Interested retailers should review their leases now to check for any restrictions on changes to usage or sub-letting store space.

Tom Leman is a retail and consumer law expert at Pinsent Masons, the law firm behind Out-Law.com