IP and Brexit - preparations for the post-Brexit legal landscape are under way

On 3 November 2016 the English High Court ruled that the UK Government must seek Parliamentary approval before triggering the Brexit negotiations. An appeal to the Supreme Court is expected in early December. However, the High Court ruling at least raises potential questions about the timetable for Brexit and what form the legal transition to Brexit will now take.

So uncertainty remains, but now, nearly six months after the UK voted to come out, the process of considering what UK IP laws will look like after a Brexit is underway.  Inevitably also, the lobbyists are out in force. Now is the time for companies to make their views known to government.

We summarise some key practical issues below:

UK protection for EU Trade Mark owners
As from Brexit day the expectation is that EU Trade Marks (EUTMs, formerly known as CTMs) will cease to cover the UK. The UK Intellectual Property Office is already in discussion with practitioners and others about the mechanisms for converting the UK part of existing EUTMs to UK national rights with equivalent priority.  Key issues include whether it will be up to trade mark owners to ‘opt in’ to these UK rights, whether additional fees will be payable and how pending applications for EUTMs before the EU IPO will be dealt with. 

Preserving protection in Europe
Often a commercial objective in registering a trade mark is not only to protect current use of a name but to reserve a mark for future use in key jurisdictions into which a business intends to expand. Businesses whose use of an EUTM is currently primarily in the UK may find that, after Brexit, such use may not be sufficient to maintain the validity of an EUTM in the rest of Europe. Similarly, whereas at present a UK registered trade mark may block registration of a conflicting EUTM by a competitor, this will no longer be the case after Brexit. UK businesses with ambitions to expand their European business in the future in particular should, therefore, review their European trade mark position more generally.

Geographical indications and designations of origin for agricultural products and foodstuffs
These identify agricultural products and foodstuffs as coming from a particular place, well-known UK examples being Melton Mowbray pork pies, Cornish Clotted Cream and white and blue Stilton.  Names from non-EU Member States are eligible for protection under the European system, but there must be proof that they are protected in the country of origin.  UK producers will be looking to the UK Government to ensure that appropriate transitional provisions are put in place to allow them to continue to enjoy protection across the EU after Brexit.

.eu domain names
The proprietor of an .eu domain name must have a registered office, principal place of business or place of establishment within the EEA.  On the assumption that the UK will be outside the EEA after Brexit, businesses may need to transfer or re-register these domain names as appropriate.  

UK protection for Community Design Right holders
As for EUTMs, the expectation is that the UK will no longer be covered by the Community Registered Design (CDR) after Brexit but that CDR holders will be able to convert the UK ‘part’ of their CDR to a UK registered design right, with the same priority as their CDR.  As with trade marks the precise mechanism for this is under discussion. The UK Government has also indicated that it will be joining the Hague Agreement on designs in a national capacity; this is an international system for registering multiple designs in different countries in which the UK currently participates through the EU.

Filling the gap in unregistered design protection
In addition to the CDR a three-year unregistered Community design right is also currently available covering all EU Member States.  This right is particularly useful in fast-moving areas such as fashion and consumer goods as it arises automatically and protects both 3D and 2D designs including surface decoration.  An automatic UK unregistered design also exists, but this only covers 3D designs and excludes surface decoration, so that significant aesthetic aspects of designs are not covered.  Voices in the fashion industry in particular have been calling for the Government to plug this potential gap in unregistered design right protection after Brexit by introducing a new UK right. A further important issue is that although the unregistered CDR is available to non-EU owners so that after Brexit UK businesses could still benefit, there is case law to suggest that in order to benefit from the unregistered community design right first publication of the design must be in the EU.   This means that, after Brexit, showing a design for the first time at the London Fashion Show could, potentially, put it outside the scope of the CDR. Businesses will wish to develop mechanisms to avoid this where possible.

Patents – participation in the Unified Patent Court
The headline issue for patents is whether the UK will be able to take part in the European Unitary Patent project, which was all but ready to go live at the time of the referendum. This project includes both a unitary patent covering 26 EU Member States and a pan-European Unified Patent Court (UPC) system in which both the new Unitary Patent and also classic, country-specific European patents could be litigated, the objective being to streamline the current, expensive fragmentation of patent litigation across Europe and provide for cross-border patent remedies.  An opinion by leading barristers obtained by the Chartered Institute of Patent Attorneys and others argues that participation by the UK in the proposed UPC would be legally possible under UK and EU constitutional law provided that the UK submits itself to the primacy of EU law and to the rulings of the CJEU in the areas covered by the Court. They acknowledge, however, that there is a risk that the CJEU would disagree with this analysis. Aside from the political question as to whether such submission to EU law would be acceptable to the UK, the potential practical difficulties of agreeing the necessary changes to the arrangements at this stage would represent a high hurdle. So, although many patent owners would feel that a revised UPC arrangement that allowed non-EU Member States, including the UK, to participate would be an excellent solution, the likelihood of this becoming a reality seems fairly remote at present.

The more immediate question is what impact the absence of the UK, one of the three top patent jurisdictions in the EU, will have on the project as a whole.  The UK’s failure to ratify the UPC has already delayed the project and some commentators believe that the whole project may fail due to the UK’s absence. Many patent owners have already carried out substantial work in deciding which of their patents to opt out of the new system and will now be watching developments closely to be ready to opt out relevant patents when (or if) the UPC comes into operation.

Copyright
Although the European Commission’s long-term aim is to achieve a single, EU-wide copyright title, at present this is far from a reality. The main Brexit issue here is the extent to which EU measures to harmonise individual aspects of copyright law will be reflected in the UK after Brexit. The UK’s freedom in this regard may depend to some extent on its future relationship with the EU – for example, if the UK joins the EEA then it will probably continue to be obliged to implement harmonised copyright – as well as other IP – laws. However, if it is not obliged to do so, past Government initiatives suggest that changes might be considered.  For example, in May 2011 the Hargreaves Report on intellectual property and growth implied that the EU regime on copyright exceptions, which confines copyright exceptions to a closed list of categories, acts as an undue restraint on the emergence of new business models. Professor Hargreaves indicates that he might have recommended a US style ‘fair use’ exception if this had been possible under EU law. In July 2015 EU law frustrated the UK Government’s attempt to introduce a private copying exception without a corresponding copyright levy when the High Court quashed UK regulations introducing such an exception because it did not comply with EU law. These are areas that might perhaps be revisited. Similarly, it is possible that the UK Government would consider going back to the pre-Copyright Directive (i.e. pre 2003) position when the UK research exception was not limited to non-commercial purposes.         At the same time, however, there is considerable support for the existing position: in a ‘Brexit manifesto’ the Publishers’ Association has called for a strong government commitment to the existing copyright framework and stronger copyright rules to encourage investment.

Database right
A particular issue arises in relation to the sui generis database right, which protects collections of data, introduced by the Database Directive of 1996, to protect investments in databases. This right is, broadly, only available to those who are nationals of or based in an EEA member state.  So if the UK does not join the EEA post Brexit the database right will not apply. Although the UK may introduce a UK database right, specific agreement with the EU will be required to achieve reciprocal protection.

 

If you have any questions on these or any other issues relating to intellectual property and Brexit, do please contact Tom Lingard, Partner and Head of Intellectual Property or Charlotte Tillett, Partner and Head of Life Sciences, who will be happy to discuss.

Contact our experts for further advice

Charlotte Tillett, Tom Lingard

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