Despite the UK’s vote to leave the European Union, companies doing business in the UK can still continue to trade with the European Union in exactly the same way as they have done in the past – at least for now.  The UK is still a member of the EU and until it negotiates an exit deal or the two year period for the re-negotiation for such a deal expires, the UK remains a full member of the European Union subject to its rights and obligations under the EU treaties.

The Exit Process

The UK has to give notice to leave the EU under Article 50 of the Lisbon Treaty.  Once the Article 50 notice is given, there is a two year period in which to negotiate an Exit Treaty. Once that period ends, the UK leaves the EU whether an exit Treaty has been negotiated or not. The two year period can be extended only by mutual agreement of the UK and the EU.

At the moment, it is unclear when the Article 50 notice will be given.  There is some debate in Parliament over whether that requires a vote of Parliament or can simply be triggered by the Prime Minister.  Big business is proposing legal action to prevent an Article 50 notice being given with a formal vote of the UK Parliament and the UK’s new Prime Minister, Theresa May, will have her own views – so this controversy is not going to be resolved soon.  In addition, several leading Brexiteers have argued that they want to negotiate the terms of the UK’s “divorce” before the two year clock starts to run but the EU says it won’t negotiate any leaving terms until Article 50 is exercised.  It seems the only clear message is that nothing is going to happen soon.

Nonetheless, until an exit Treaty is signed or the two year period expires (or any extensions mutually agreed between the UK and the EU) the UK is fully bound by its EU Treaty rights and obligations. That means that, unless the UK wants to breach its international treaty obligations, it cannot dis-apply EU law nor the reach of the Court of Justice of the European Union.

So from a legal perspective, nothing is going to change for a while. In fact, the UK is still going to be legally obliged to implement new EU Directives as long as the UK is a member of the EU. Depending upon the terms of the UK’s exit deal, the UK may still find itself having to implement those European laws to gain access to the EU single market and to obey the free movement rules.

So the vote for Brexit is only the start of a long process and the challenges of Brexit, both legally and politically, are only just beginning.

Where do we go from here?

The UK has to negotiate a deal to leave the EU. No member state has ever seceded from the EU. Only Greenland (as part of Denmark) left and that was over 25 years ago.

So the UK is in unchartered waters. However, it appears clear that the EU is unlikely to do the UK any favours in these negotiations. It will not compromise its fundamental principles of free movement of goods, services, capital and people. So the UK may have to rely on international trading rules to access the EU markets which may mean tariffs and other restrictions or – much more likely – agree a free trade deal based on membership of the EEA like Norway.

However many political commentators believe that if the UK does not negotiate to have free access to the EU single market, the UK Parliament is unlikely to ratify the Treaty. The Leave vote did not cover what the leaving terms should be so, it is far from clear how the Brexit drama will play out.

This is unlikely to be a “leave the EU at all costs” vote. It is more likely to be just re-arranging the chairs in this EU game of musical chairs.

European Patents

The UK will continue to be a member of the European Patent Organisation (EPO) which is a separate body from the EU. Thus, patent protection in the UK will continue to be available via the European Patent Office. The European Patent Convention will continue to be part of UK law and European Patent attorneys will continue to act in the usual way in all matters before the EPO.

EU Trademarks (formerly CTMs) and registered designs

The legislation governing these is silent as to what happens when a country leaves the EU. Best case scenarios are (i) the UK will enact national legislation deeming the European registrations to extend to the UK or (ii) the EU will agree that European registrations can be converted to UK trademark and design registrations.

Given that the UK will remain a member of the EU for some time, we do not recommend, at this stage, that you take further action (e.g. re-file your marks in the UK), but we shall be monitoring developments and will update you as the position becomes clearer.