Brexit is the name most commonly used to refer to the United Kingdom’s (UK’s) exit from the EU (EU). Following a referendum in June 2016, the UK indicated its intention to leave the EU and formally gave notice under Article 50 of the Lisbon Treaty on 29 March 2017. This began a two-year period for the UK and EU to agree the terms of Brexit, with the UK set to leave the EU on 29 March 2019.
The two most common scenarios for Brexit are 1) the UK leaves the EU with an agreement; or 2) the UK leaves the EU without an agreement, the so-called ‘no deal’ scenario. This note looks at the impacts in both scenarios on the protection of intellectual property (IP) rights.
It’s worth stating at the outset that Brexit will have little impact on the protection of patents. The European Patent Convention is not a body of the EU and therefore Brexit will not affect European Patents. UK businesses can continue to apply to the European Patent Office for patent protection which will include the UK. Existing European patents covering the UK are also unaffected.
It was announced on 13 November 2018 that negotiators from the EU and UK had reached an agreement on the terms of the withdrawal of the UK from the EU. The draft agreement text was published on 14 November 2018.
When will the changes take effect?
Under the Withdrawal Agreement, there will be a transition period (when the UK will effectively remain bound by the laws of the EU) until 31 December 2020. The changes discussed below will then take effect from 1 January 2021, unless the UK and EU agree an extension of the transition period.
Under the Withdrawal Agreement, holders of registered EU Trade Marks, Registered Community Designs and Community Plant Variety Rights granted before the end of the transition period will become the holder of comparable registered and enforceable rights in the UK. These rights will be granted without re-examination and will be free of charge to the rights holder. The comparable rights will be subject to the payment of renewal fees in the UK.
As an example, a holder of a registered EU Trade Mark due for renewal on 16 October 2021 will become a holder of EU and UK trade marks, both of which will be required to be renewed on 16 October 2021. Failure to renew the UK trade mark will lead to the loss of rights in the UK.
The Withdrawal Agreement provides that holders of international trade marks, pursuant to the Madrid system, and international designs, pursuant to the Hague system, in the EU will continue to enjoy protection after 31 December 2020 in the UK for trade marks or industrial designs.
Unregistered Community Design Rights
The holder of an Unregistered Community Design Right which arose before the end of the transition period shall become the holder of an equivalent right in the UK. The term of protection of that right shall be at least equal to the remaining period of protection of the corresponding Unregistered Community Design Right.
The UK is a member of a number of international treaties and agreements protecting copyright. Membership of theses treaties and agreements will be largely unaffected by Brexit, and UK copyright works will continue to be protected around the world. Similarly, the UK will continue to recognise the rights of global copyright holders.
Following Brexit, certain EU cross-border copyright mechanisms will no longer work as they do currently. The UK will be required to negotiate with the EU to reach an agreement on the arrangements for IP cooperation for the benefit of copyright holders in the UK and EU.
The Withdrawal Agreement provides that holders of existing EU geographical indications, designations of origin, traditional specialty guarantees or traditional terms for wine will remain protected in the UK until the future economic relationship comes into effect and supersedes those arrangements. Similarly, existing UK geographical indications will continue to be protected by the current EU regime.
Exhaustion of rights
The Withdrawal Agreement also covers exhaustion of rights. Any IP rights exhausted before the end of transition will remain exhausted in the UK and EU.
As has been reported widely, the draft Withdrawal Agreement is highly contentious in the UK. It remains to be seen whether the UK government will be able to reach political agreement with the UK parliament and the governments of the EU-27.
At present, a scenario where the UK leaves the EU without an agreement remains unlikely as it isn’t in the economic interests of any of the parties concerned. However, the UK government has made plans for what will happen to IP rights in the event of a ‘no deal’ scenario.
When will changes take effect?
In the ‘no deal’ scenario, the UK will leave the EU on 29 March 2019. The changes discussed below will then take effect from 30 March 2019.
The UK government has pledged to ensure that existing registered EU Trade Marks and Registered Community Designs granted before 29 March 2019 will continue to be protected in the UK by providing equivalent trade mark and design rights.
Businesses, organisations or individuals that have applications for EU Trade Marks and Registered Community Designs which are pending on 30 March 2019 will have a period of nine months from this date to reapply in the UK for the same protections, while retaining the date of the EU application for priority purposes. Rights holders taking this step will be required to meet the cost of the refiling in accordance with the UK fee structure in place at the time.
The UK government has pledged to work with the World Intellectual Property Organization (WIPO) to ensure that holders of international trade marks, pursuant to the Madrid system, and International designs, pursuant to the Hague system, designating the EU will continue to enjoy protection in the UK after Brexit.
Unregistered Community Design Rights
The UK government has stated that it will ensure that all Unregistered Community Design Rights which exist at the point that the UK leaves the EU will continue to be protected and enforceable in the UK for the remaining period of protection of the right.
In addition to this, the UK intends to create a new unregistered design right in UK law which mirrors the characteristics of the Unregistered Community Design Right. This means that designs which are disclosed after Brexit will also be protected in the UK under equivalent terms as the Unregistered Community Design Right. This new right will be known as the Supplementary Unregistered Design Right.
Those UK unregistered design rights which exist at the point of Brexit will continue to be protected and the UK unregistered right will continue to exist for designs first disclosed in the UK.
The UK is a member of a number of international treaties and agreements protecting copyright. Membership of theses treaties and agreements will be largely unaffected by Brexit and UK copyright works will continue to be protected around the world. Similarly, the UK will continue to recognise the rights of global copyright holders.
Following Brexit, certain EU cross-border copyright mechanisms will no longer work as they do currently, as the UK will be treated as a third country.
If there is no deal, the UK government has confirmed that it will, after 29 March 2019, set up its own geographical indications which will broadly mirror the current EU regime and be no more burdensome to producers.
It’s anticipated that current UK geographical indications will continue to be protected by the EU regime — but, as the UK would no longer be part of that, it would be necessary to apply for further geographical indication status in the UK.
Exhaustion of rights
In the ‘no deal’ scenario, the UK will continue to recognise the European Economic Area (EEA) regional exhaustion regime after 29 March 2019 to provide continuity in the immediate term for businesses and consumers. This approach means that there will be no change to the rules affecting imports of goods into the UK and businesses that undertake this activity may continue unaffected.
The ongoing UK recognition of the EEA regional exhaustion area will ensure that parallel imports of goods, such as pharmaceuticals, can continue from the EEA. There could, of course, be new restrictions applied to parallel imports of goods from the UK to the EEA in time.
.eu domain names
You may need a contingency plan in place if you have a .eu domain name, in the event of a 'no-deal' Brexit. Read our update here to see if you need to take action.
The meaningful vote
The so-called 'meaningful vote' is set to take place in the week commencing 14 January. Following this, we'll continue to provide updates on the state of IP rights if anything changes, so that you're prepared for any eventuality.