Whatever future relationship the UK has with the rest of the EU, the effect of the Great Repeal Bill, once enacted, will mean that any existing intellectual property law having effect in the UK will continue to apply as it did post-Brexit, although it will be for the UK Government to adapt or amend it subsequently. That means that intellectual property law will continue to contain all of the concepts implemented from EU Directives or applicable from EU Regulations. However, EU-wide rights defined as applying “in the EU” will no longer apply in the UK and the Government will need to consider providing replacement rights, provision for which would need to be in place prior to Brexit.
Patents: UK designated European patents (EPs) will continue to apply in the UK and will still be able to be applied for at the European Patent Office and nationally granted UK patents will also be available. However, although the UK Government announced in November 2016 that the UK would ratify the Unified Patent Court Agreement (UPCA) and would take part in the Unified Patent Court (UPC) and thus the new unitary patent (UP) right (see our ebulletin on this development and further information on the UPC and UP on the UPC hub on our website). Once it has left the EU, the UP will no longer cover the UK and it is unlikely that the UK could continue as part of the UPC system. It is worth noting that none of Spain, Poland, and Croatia is currently planning to participate in the UPC (or UP) so the UK will not be alone in this. The UK is required to ratify the UPC Agreement before it can come into effect. This requirement applies while the UK is still a member of the EU (France, Germany and the UK must be amongst the 13 or more ratifiers as they were the EU States with the most patent applications at the time of signature of the UPC Agreement).
Even if the UK is not in the EU (and not in the UPC system), UK businesses with European patents designated to participating EU Member States will still be able to use the new UPC system (unless they have chosen to opt these patents out of its jurisdiction), and will of course be able to apply for UPs – although the latter will not cover the non-participating States listed above, nor any non-EU European Patent Convention States (eg Turkey, Switzerland, Norway), for which European patents will still be available but which will all need to be litigated nationally as they will be outside the jurisdiction of the UPC.
The UPC has advantages (central enforcement) and disadvantages central revocation) for patentees and their competitors alike. Assuming that the UPC does go live, UK businesses with UPs and EPs will still be able to use the UPC for enforcement in other EU participating countries, whether the UK is in or out of the EU. However given concerns about how the UPC will operate in the early years and the quality of the early decisions made by it, some patent proprietors will choose to opt-out their European patents from the UPC system. As a result, business is still likely to pursue litigation in countries across Europe (including the UK) outside of the UPC system.
Pan-European enforcement strategies will remain important. Indeed, current or future pan-European patent litigation strategy will still involve multiple courts and supranational management of disputes, whether or not the UPC goes ahead and with or without the UK’s participation; Spanish, Polish and Croatian designated European patents will also be outside its jurisdiction (as explained above) and UPs will not have effect in these jurisdictions. Further, nationally granted patents must be litigated locally. It will still be critical to have advisers who are expert in handling multiple cross-border disputes and managing local lawyers in jurisdictions within Europe or beyond.
See the jurisdiction and opt-out page of our UPC and UP hub on our website for more information on the UPC and our article published in PLC Magazine on preparing your patent portfolio for the advent of the UPC and the UP.
With the UK no longer in the EU, the European Medicines Agency (EMA) may move from London. However, even if the EMA is relocated, it is crucial that the UK and the rest of the EU remain in step in terms of the ability to get pharmaceutical and medicinal products to market efficiently, whilst relying upon common clinical study data, as well as monitoring patient safety.
Supplementary Protection Certificates: Supplementary Protection Certificates (SPCs) are UK national rights granted by the Intellectual Property Office (IPO) under rules determined by an EU Regulation. It is anticipated that the Great Repeal Bill, once enacted, will have the effect that all EU law applying to the UK at the day before Brexit will remain as UK law going forward unless and
until this is changed by the Government or Parliament. This will mean that SPCs can continue and can be granted by the IPO post-Brexit, although transitional arrangements are expected.
Plant breeders’ rights: Whilst the UK system is similar in approach to the EU system, the relevant EU Regulation will cease to apply to the UK. Whatever the effect of the Great Repeal Bill, when enacted, it would be desirable that express provision is made by UK legislation to provide an
equivalent plant breeders’ right in the UK for each protected variety, with the same priority date and term as the Community plant variety right.
Trade secrets: The Trade Secrets Directive adopted recently is due to be implemented into national law across EU Member States by 5 July 2018. Although the proposed changes required are minimal for the UK, the UK may still decide to implement the Directive before 2018, to ensure a strong, harmonised playing field for protecting innovation and investment across Europe. This would ensure certainty and consistency of approach in the way businesses are able to respond to the challenges of safeguarding their critical trade secrets.
Trade marks: EU trade marks (EUTMs) will no longer cover the UK post-Brexit since their effect is determined by the territory of the EU. In order to maintain the status quo in relation to EU-wide rights such as EUTMs, it is expected that provision will be made to provide an equivalent right in the UK with the same specification, priority date and term as the EU level right previously. This would be a better solution than requiring proprietors to convert their EUTMs into a collection of national rights across the EU. Various options are proposed – to convert all EUTMs into national UK trade marks at the point of Brexit (which may risk cluttering the register and allowing some marks which would not normally have been allowed on the UK register) or to recognise the EU marks in the UK and convert them into UK marks by application from the proprietor at the next point of renewal (if no UK application is required then they would then lapse in effect in the UK).
The main concerns of trade mark owners are that new criteria might be applied to an already valid trade mark right in the UK on any conversion and that their marks might be put at risk by the process. Further any hiatus in protection could lead to the intervention of local rights of prior use which might damage the effectiveness of any new UK registration. Due to the uncertainty about the approach that will be taken, trade mark proprietors should consider in the meantime supplementing their protection by applying for UK national trade marks for their key brands.
Geographical Indications (GIs): Post-Brexit, EU GIs will no longer have effect in the UK and UK related GIs will no longer be able to be applied for in the EU. Current rights within the UK held in relation to non-UK geographical areas will either need to be negotiated to continue until expiry (with no new applications) via a transitional period or will need fresh legislation to provide the equivalent
right in the UK. UK GIs will need local protection in the UK (above and beyond passing off) and will require new legislation. Some form of reciprocal recognition will be necessary for UK and EU GIs to function effectively in a European market.
Designs: Provision will need to be made for the recognition of Community Registered Designs in a similar way to that for EU trade marks. Many design owners will have already protected their designs using UK registered design as well and so should have equivalent protection in the UK in any case (since the Community and national registered design systems have been harmonised and offer the same level of protection). However, if a UK registered design has not been applied for and protection is solely via Community level rights then the proprietor will have difficultly registering a UK equivalent right if the product has been on the market for more than 12 months as it would fail the novelty requirements. Thus the doubling up of registrations recommended in the period prior to Brexit for trade marks does not work so easily for registered designs.
Protection via Community unregistered design arises automatically on first making available in the EU. This may mean that product launches are located in the EU (and not in the UK) post-Brexit in order to acquire this right (the novelty requirements of which mean that first making available outside the EU would prevent the qualification for the right). This may have implications for industries that rely on this short term right, such as the fashion industry. There will be protection offered by the UK’s own unregistered design right, which pre-dates the introduction of the Community unregistered design right, but has slightly different levels of protection: UK unregistered design protects the shape or configuration of a design and does not protect surface decoration, whereas the Community unregistered design protects aspects of the whole or part of a 3D or 2D design. UK unregistered design rights also arise automatically but last longer than the Community version (15 years versus three years) and is not dependent on the nationality of the designer (UK/EU). The simplest solution would be for the UK to create an equivalent right in the UK.
Labelling: Products will still need to comply with CE-marking and other specific regulations, where their intended market is within the EU. We can expect UK regulations to continue to mirror EU counterparts in order to ensure easy access to other EU markets.
Territory: Licences and other intellectual property agreements using territory references such as EU or EEA will need review to ensure that the UK continues to be covered and future contracts being entered into will need thought as to their intended future coverage.
Definition of “intellectual property”: This may need to be revisited to check that it covers all “new” provisions put in place to cover rights previously held on an EU-wide basis.
Exhaustion of rights: The rule that goods placed on the market in one part of the EU cannot be prevented from circulating freely within the EU, and hence intellectual property rights cannot be used to prevent the movement of goods across EU internal borders would fall away in relation to the new UK/EU border and the use of seizure procedures via Customs and Excise may thus come to the forefront; unless such free movement of goods provisions are retained in any future relationship between the UK and rest of the EU. This may have a big impact upon parallel imports from the EU into the UK, particularly in the pharmaceuticals, technology and fast moving consumer goods sectors where parallel imports are widespread.
This may be an advantage to intellectual property owners who will be able to assert their rights at the new EU-UK border. However, it could be that the UK courts revert to applying international exhaustion as was their practice in particular in relation to trade marks, prior to the advent of the Trade Mark Directive, where parallel import products did not pose any sort of danger to consumers.
Technology licences: The EU technology transfer block exemption legislation has been used as a framework to draft technology licences concerning licensing technology and other intellectual property within the EU. This provides guidance on what restraints may be allowed by competition law and what may not. However, these will remain relevant to any business wishing to operate across Europe on a uniform basis. Equally, businesses will still be subject to EU competition law, where they have operations within the EU or the effect of the licensing arrangement may impact EU trade; to date UK competition law has adopted the same approach as EU competition law and given a domestic exemption in parallel with the EU one and it is to be hoped this will be continued.
Science, research and innovation
The UK Government’s White Paper acknowledges that the country has highly rated universities and is one of the top six nations in the world for university/industry collaboration in research and development and third in the Global Innovation Index.
Much of this success has been in collaborative projects funded by a range of EU bodies, principally under the aegis of the EU Commission’s Directorate–General for Research and Innovation in a programme known as “Horizon 2020” with a budget of over €74 billion for the period 2014/20.
Although there are occasional grants from EU funds to third countries, by leaving the EU the UK will largely cut itself off from this funding and is not obviously eligible for associate membership. Switzerland is the only country not intending to join the EU or the EEA which is participating in Horizon 2020 and it has not had an easy relationship with the EU in this area, continued membership having been linked to its national policies on immigration from the EU.
It is estimated the UK received €8.8 billion in direct EU research funding (out of some €60 billion in the Seventh Framework Programme 2007-13) and continues to be one of the major recipients of research funding in Horizon 2020.
The UK Government recognises that Brexit poses a significant challenge for UK research and has increased its own budget to provide another €2 billion per annum of funding by 2020/21, specifically targeted at technologies with industrial and commercial applications, such as robotics and biotechnology. The UK Government has also established a High Level Stakeholder Working Group to work with it to ensure that the UK builds on its position in research and innovation excellence.
What to do now:
- Identify and review licences and other IP agreements which are intended to cover the EU, particularly for references to the EU and confirm that these will continue to be appropriate and cover the UK, post-Brexit. For guidance, see our article published in PLC Magazine on preparing your patent portfolio for the advent of the UPC and the UP: The New Unitary Patent Regime – Prepare and Protect your Portfolio.
- Register national UK rights in parallel to your current EU-wide rights (e.g. UK trade marks, UK registered designs and UK plant breeders' rights)
- Continue to file national or European patents designating the UK
- Review the decision ahead whether to opt-out EPs from the UPC system (see our article What should influence your decision to opt-out of the UPC? published in Managing Intellectual Property Magazine)
- Get up to speed with the new UPC/UP system via our UPC and UPC Hub (www.hsf.com/upc)