The European Commission draft Brexit withdrawal agreement was published on 28 February 2018. Articles 50-57 concern intellectual property and provide some significant insights into the EU’s position on how protection of EU rights should be maintained in the UK after Brexit.

The draft agreement assumes that there will be a transition period and that the EU intellectual property rights will continue to take effect in the UK as they do now until the end of that transition period. The EU’s current position is that the transition period should end on 31 December 2020. If that date is agreed, then the provisions discussed below would apply from 1 January 2021.

Registered EU rights: EU trade marks, Community designs, Community plant rights, geographical indications

The draft agreement provides that holders of EU registered rights should automatically become the holder of an equivalent UK registered right (with the same filing/priority date, term of protection, renewal date etc.) at the end of the transition period, without such holders having to pay any additional fees or undertake any administrative procedure.

This approach will be welcomed by rights holders and hopefully will not prove too controversial. It is still possible that the UK could seek to impose fees for the administration that will be involved in creating a large number of new UK rights.

Article 50(3) of the draft agreement provides that if a registered EU right that is subject to pending judicial or administrative procedures at the end of the transition period is subsequently declared invalid or revoked, then the corresponding UK right that was created at the end of the transition period should also be declared invalid or revoked. Such a provision seems broadly sensible to avoid the created UK right avoiding what would otherwise be a valid challenge. However, this provision may need some refining in respect of EU trade marks that are found to be invalid on the basis of grounds that do not apply in the UK (e.g. the mark is descriptive in Estonian or conflicts with an earlier right in Spain). Currently it is possible to convert an EU trade mark registration into a UK trade mark when is declared invalid on the basis of grounds that do not apply in the UK, and it may be necessary to allow for a similar process to be put in place (this may be something the UK could do independently).

Pending EU rights: EU trade mark applications and Community plant right applications

In contrast to registered rights, the draft agreement does not provide for the automatic creation of equivalent UK applications for EU trade mark and Community plant right applications that are pending at the end of the transition period. Instead, it grants applicants a six month priority period from the end of the transition period during which the applicant can file a UK application that can claim priority from the EU application.

If this approach is adopted (and we can see no reason why the UK should object) then it is likely that a large number of UK trade mark applications will need to be filed in the six months following the transition.

This approach would also mean that parties currently opposing EU trade mark applications would need to file a separate UK opposition if they wished to oppose any UK application claiming priority from such an EU trade mark application. Indeed, if their opposition was based entirely on UK rights, then they may find that their opposition to the EU trade mark application could no longer be maintained and the opposition would effectively need to start again before the UK Intellectual Property Office.

There are no provisions that deal with pending applications for Community designs. This is presumably because the period of time between application and registration is so short that any party filing a Community design application shortly before the end of the transition period who also wishes to obtain protection in the UK should also file a UK design application if there is any danger that there Community design application will not have proceeded to registration by the end of the transition period.

Unregistered rights

Not surprisingly, the draft Agreement also requires the UK to maintain protection for existing database rights and unregistered Community designs with the same level and scope of protection.

Interestingly, an important caveat to that approach is that the UK is only required to maintain database protection for UK nationals, persons with habitual residence in the UK or UK undertakings. This may indicate that the EU’s current position is that EU database right will not be maintained for UK nationals and undertakings that cannot satisfy the EU database right nationality tests once the UK leaves the EU. Hopefully this is an issue that can be resolved during the negotiations and the EU and UK will both maintain existing database right protection for each other’s nationals and undertakings (and also provide database right and unregistered design right protection for each other’s nationals going forward, although presumably this will be covered in any agreement covering the EU and UK’s future trading relationship).

Supplementary protection certificates

The draft agreement requires the UK to continue to process pending supplementary protection certificate applications and extensions (which effectively grant an additional term of patent protection for some medicinal products) and provide any granted supplementary protection certificate with the same level of protection.

We would not expect this to be controversial.

Exhaustion of rights

The draft agreement provides for the continued exhaustion of intellectual property rights, both in the UK and the EU, if those rights had already been exhausted before the end of the transition period. This means, for example, that goods put on the market in the European Economic Area before the end of the transition period can continue to be imported into the UK after the end of the transition period and vice versa.

The draft agreement does not cover exhaustion of rights for goods placed on the market after the end of the transition period.

Pending disputes

Articles 62-65 of the draft agreement sets out a number of provisions that relate to on-going judicial cooperation in civil and commercial matters. Of particular relevance for IP, Article 63(1)(a) and (b) provides that the provisions concerning jurisdiction set out in the Recast Brussels Regulation, the EU Trade Mark Regulation and the Community Design Regulation will continue to apply to any proceedings commenced before the end of the transition period. This suggests that UK courts will maintain jurisdiction to decide claims relating to EU intellectual property rights provided those claims are commenced before the end of the transition period.