Gill Dennis Florian Traub October 31 2022 UK Retained EU Law Bill – how will intellectual property be impacted? Pinsent Masons | Intellectual Property - United Kingdom Gill Dennis, Florian Traub Intellectual Property BackgroundWhat does the Bill do?What does this mean for intellectual property?What about IP case law?Will this actually happen?Next stepsThe UK government has introduced the Retained EU Law (Revocation and Reform) Bill to Parliament. If the Bill becomes law, it will fundamentally change the United Kingdom's post-Brexit legal landscape, including by automatically revoking a raft of legislation in December 2023. While significant changes to environmental standards or employment rules will likely dominate the popular press, legislation relating to intellectual property will also be affected, and this article explores how.Background The Bill is the latest step in the implementation of Brexit, and is intended to deepen its impact more quickly.All "retained EU law" falls within the scope of the Bill. "Retained EU law" refers to EU law, including UK domestic legislation derived from or influenced by it, that was incorporated into the UK legal system after Brexit under the constitutional framework of the European Union (Withdrawal) Act 2018. The Act also incorporated most of the special features of EU law into the UK legal system so that retained EU law continued to be interpreted and applied as it had been prior to Brexit. The aim was to ensure legal continuity and certainty post-Brexit. The government's plan was to introduce UK domestic legislation over time to gradually amend, revoke and replace retained EU law.The government's current view is that this process is not happening quickly enough, and it wants more radical and immediate changes to be made to retained EU law. To that end, the Bill was introduced.What does the Bill do?The key features of the Bill are:Some retained EU law will be "sunsetted" – that is, some legislation will be automatically revoked on 31 December 2023, unless government ministers decide to save the legislation, indefinitely or temporarily, or introduce domestic replacement legislation in the meantime.Preserved legislation will be renamed "assimilated law". It will have its special EU features stripped from it, which will impact how it is interpreted and applied.The UK courts will no longer be required to interpret assimilated law consistently with the corresponding legislative provisions of EU law.Only the Court of Appeal and the Supreme Court will be able to depart from relevant EU case law (which will be no change to the existing position). However, a new procedure will be introduced (akin to the preliminary reference procedure between EU national courts and the Court of Justice of the European Union) which will allow a lower court to seek a ruling from the Court of Appeal on whether it should follow relevant EU case law or depart from it.New statutory tests will be introduced that the Court of Appeal and Supreme Court must apply when deciding whether to depart from EU case law. They will be asked to consider a number of factors, including whether EU case law restricts the proper development of domestic law, before deciding whether to depart.The government has given itself considerable discretionary overarching powers in the Bill to amend and replace any retained EU law it chooses. The replacement legislation will be in the form of secondary legislation that will be subject only to limited Parliamentary scrutiny, however significant the reforms it introduces are.What does this mean for intellectual property?EU law has had a profound impact on the UK legal system relating to intellectual property, including harmonisation around trademark, design and copyright law, which this article focuses on. These areas of law, therefore, fall within the scope of the Bill.Primary domestic IP legislation is preserved by the Bill and falls outside the sunset provisions. This means, for example, that the Trade Marks Act 1994, the Registered Designs Act 1949 and the Copyright Designs and Patents Act 1988 will remain in place, unless and until replaced by domestic legislation passed by Parliament in the usual way. These Acts will, however, form part of assimilated law and be subject to the changes around interpretation outlined above. In particular, there will be no requirement for the courts to interpret these pieces of domestic legislation consistently with their EU counterparts. This leaves scope for divergence between the meaning and effect of, for example, the Trade Marks Act 1994 and the Trade Marks Directive (EU) 2015/2436.Domestic secondary legislation is, however, subject to the sunset. This means that a number of genuinely significant pieces of legislation relating to trademarks, designs, copyright and even database right are at risk of automatic revocation on 31 December 2023. The Copyright and Rights in Databases Regulations 1997, The Trade Secrets (Enforcement, etc.) Regulations 2018 and The Intellectual Property (Enforcement, etc.) Regulations 2006 (among others) are caught. It is expected that further announcements will be made on what the government intends to do in relation to each individual piece of IP legislation in this category.It is not currently clear exactly how many, and which, pieces of trademark, design and copyright legislation are impacted by the Bill. The government's own retained EU law dashboard does not appear to be comprehensive and so cannot be relied upon as providing a complete picture at this stage.What about IP case law?Case law is integral to the development of the law around trademarks, designs and copyright. The Bill enables the Court of Appeal and the Supreme Court to depart from any relevant EU case law. That is no change to the existing post-Brexit position. However, what is new is that all courts will no longer be required to interpret domestic legislation consistently with EU law provisions, and so may depart from EU case law in that respect. In addition, the preliminary reference procedure in the Bill will give other case law departures effect in the High Court, including the Intellectual Property Enterprise Court (IPEC). While these lower courts cannot of their own volition depart from other EU case law, they can be given permission to do so. The net result is that case law departures will happen in practice at High Court level.Legal divergence on Brexit was anticipated. The Bill potentially hastens that. However, whether UK IP judges will choose to diverge on legislative interpretation and case law remains to be seen. The evidence so far is that they may prefer continuity and consistency between the United Kingdom and the European Union in the interests of legal certainty, and leave reforms to Parliament. See, for example, the comments of the Court of Appeal in TuneIn,(1) in which the Court stressed that the power to depart from retained EU case law should be exercised "with caution" (for further details, see "Court of Appeal sheds further light on copyright law in relation to hyperlinking").The approach judges choose to take will be pivotal in the future development of the law. There may be some uncertainty for several years after the Bill is enacted until the courts' new approach becomes clear. Clarity is currently needed, for example, on whether the EU test of originality for subsistence of copyright set out in Cofemel(2) should trump the UK closed category approach to copyright protection, which can sometimes require a work to have artistic merit for copyright protection to arise. In its recent decision in WaterRower,(3) the IPEC declined to decide the point (for further details, see "Judge declines to rock the boat on complex copyright questions in water resistance rowing machine case"), but it was widely believed that the United Kingdom would, in time, openly adopt the EU test. That is now called into question.Will this actually happen?The Bill has yet to become law. It will not be easy for the government to take this Bill successfully through all stages of the UK Parliamentary process, although so far the profound effects of the Bill appear to have been drowned out by the overall political turmoil. The House of Lords could, for example, seek to extend the sunset date or water down other aspects of the Bill. A change of government with a different agenda might see the Bill abandoned altogether.The Bill is unlikely to become law (in any form) before mid-2023, leaving the government very little time before the sunset cliff edge to make decisions about the future of a large body of legislation. There may be, therefore, moves to preserve legislation en masse, indefinitely or temporarily, to avoid legal black holes until a more thorough review process can be undertaken.Next stepsFurther developments are expected as the Bill progresses through Parliament, along with clarity from the UK Intellectual Property Office (UKIPO) around which legislation is affected and what its approach to revocation or preservation is likely to be. Businesses should consider in the meantime whether they wish to make representations to the UKIPO to seek to influence its decision-making on these issues.For further information on this topic please contact Gill Dennis or Florian Traub at Pinsent Masons by telephone (+44 20 7418 8250) or email ([email protected] or [email protected]). The Pinsent Masons website can be accessed at www.pinsentmasons.com.Endnotes(1) TuneIn Inc v Warner Music UK Limited  EWCA Civ 441.(2) Cofemel-Sociedade de Vestuário SA v G-Star Raw CV (C-683/17).(3) WaterRower (UK) Limited v Liking Limited (T/A Topiom)  EWHC 2084 (IPEC).