The European Commission has published a position paper on IP rights (including geographical indications) post-Brexit. The document, circulated to the remaining 27 EU member states ahead of a meeting on 7 September, sets out five “general principles” for negotiations with the UK.

It’s no understatement to say that the UK’s decision to withdraw from the EU has created uncertainty both for the UK and for the EU’s 27 remaining member states (EU27); among the issues under consideration is the potential impact of Brexit on IP rights and IP holders in the region.

In its paper, the Commission is clear that it wants the withdrawal agreement to ensure that IP protection (including for pending rights, geographical indications, supplementary protection certificates (SPCs) and database rights) is not undermined or exhausted by the withdrawal of the UK from the EU. Further, rights that are exhausted before the withdrawal date should remain exhausted in both the EU27 and the UK.

Key areas of focus

The paper goes on to discuss five general principles (or key areas) that it believes need to be protected to achieve this goal: (1) existing IP rights (including geographical indications); (2) pending applications; (3) applications for SPCs or for extensions of their duration; (4) databases; and (5) exhaustion of rights. The Commission is clear throughout on its general position for existing IP rights, namely:

“The holder of any intellectual property right having unitary character within the Union and granted before the withdrawal date should, after that date, be recognised as the holder of an enforceable intellectual property right in relation to the UK territory, comparable to the right provided by Union law – if need be on the basis of specific domestic legislation to be introduced.”

This position applies too to protected geographical indications, protected designations of origin and other protected terms in relation to agricultural products (traditional specialities guaranteed and traditional terms for wine) where the necessary domestic legislation providing for their continued and comparable protection would need to be put in place (there is currently no domestic legislation in the UK protecting these rights).

The paper also briefly sets out that the implementation of this principle should also include:

  • determination of renewal dates;
  • respect of priority and seniority principles;
  • adaptation of 'genuine use' requirements and 'reputation' rules.

It goes on to add that: “The implementation of this principle should not result in financial costs for the holders of IP rights having unitary character within the Union. Any related administrative burden for such holders should be kept to a strict minimum.”

Applications, SPCs and database rights

The position paper also covers:

  • applications for IP rights submitted before the withdrawal date: "the applicant should be entitled to keep the benefit of any priority date in respect of such pending application when applying after the withdrawal date for an equivalent IP right in the UK’;
  • applications for SPCS or for an extension of their duration if submitted before the withdrawal date: “a person should continue to be entitled to obtain in the UK an SPC or an extension of the duration of a SPC (so-called paediatric extensions)... Any certificate so granted or extended should provide for protection equivalent to that provided for by Union law"; and
  • makers or rightholders of databases protected pursuant to Article 7 of Directive 96/9/EC before the withdrawal date who: “should continue to enjoy protection after that date in the EU27 and in the UK in relation to those databases.” For this purpose, it proposes that requirements of Article 11(1) and (2) should be waived in the EU27 in respect of UK nationals and UK companies/firms; but, conversely, the UK should not exclude EU27 nationals and EU27 companies/firms from legal protection of databases in the UK on nationality or establishment grounds.

Exhaustion of rights

On the subject of exhausted rights, the paper states that any IP rights exhausted in the EU territory before the withdrawal date should remain exhausted in both the EU27 and the UK after that date. It adds that the question of whether a right is exhausted or should be defined as per existing Union law for the specific type of right.

What does the position paper mean for you?

Of course, the position paper is not a binding account of how the process of splitting the UK from the EU will apply to the current IP system; however, it provides important insight into how the EU wishes to approach this potentially tricky subject.

It should be encouraging to rights owners that the EU27 wants a smooth and consistent IP approach at Brexit. The main message at this time is that the EU27 want the owners of unitary rights to not lose those rights when the UK leaves the EU. There will be many more details which need to be ironed out but, as yet, there is no clarity as to how exactly the UK equivalents of existing rights will look.