Several recent developments have lead observers to revisit the possibility of a no deal scenario when Britain (eventually) exits the European Union. Mark Carney, Governor of the Bank of England, weighed in with the estimation that the possibility of Britain leaving the EU without a deal is “uncomfortably high”. The implications of such a scenario are worth considering.
In the event that a deal is not struck by the deadline in March 2019, and this deadline is not extended, then the transitional framework which is envisioned as easing the divorce will not be present. In theory, all agreements which currently bind the EU and third party countries would no longer be applicable in the UK, and all arrangements which are reflected in EU legislation would no longer bind nor benefit the UK. The topics with the most focus at present seem to be travel, residency and finance, but the implications would likely reach every industry.
The assurances which were offered recently around automatic generation of equivalent IP rights in the UK would presumably not be applicable in the event that the collaborative efforts between the two parties ceased without resolution. The generation of an equivalent right is dependent on the withdrawal agreement; no withdrawal agreement would indicate we also should not expect this equivalent protection.
In the event of a no-deal Brexit, the UK Government could establish equivalent rights for all brand owners who currently benefit from unitary rights (such as EUTMs or RCDs) without the need for any agreement from the EU. In the long run, it seems fairly certain that something will be put in place to ensure that current owners of EU rights do not lose priority in the UK.
However, in the event of a no-deal Brexit, providing equivalent protection for holders of EU IP rights is likely to be a long way down the UK Government’s list of priorities. Trade, borders, security, adequate provision of medicines and food are (quite sensibly) likely to take priority. That potentially leaves rightsholders waiting to know how their rights are going to take shape in the UK, and unable to enforce those rights during that time. Given the mountain of other issues which would require addressing, brand owners could be waiting a long time before they’re in possession of an enforceable right again.
But how likely is it that there will be no settled agreement? This is a very hard question to answer. The Chequers agreement lasted one day. Three cabinet ministers have resigned over the changed position of the government. Even if we get an agreement with the EU, will it get approved in Parliament in accordance with the EU’s deadlines?
In short, then, the risk of a no deal scenario appears higher than it was 6 months ago. Or, in fact, 2 weeks ago. The magnitude of legislative dead space that would be faced by the UK Government in the event of a no deal scenario is sufficiently intimidating that we are remaining cautiously optimistic that this will be avoided at all costs. Check back in a few weeks, however.