The UK government published the EU (Withdrawal) Bill (formerly referred to as the Great Repeal Bill) on 13 July. Like the White Paper before it, the Bill focuses on three main areas:
- repealing the European Communities Act 1972, the law which brought the UK into the EEC, gives effect to EU law in the UK and makes EU law supreme;
- converting existing EU law into UK law on Brexit; and
- creating delegated powers for ministers to enact secondary legislation.
The Bill affects IP by ensuring that all pre-Brexit directly applicable EU legislation and CJEU case law will form part of domestic law immediately on Brexit. EU-derived domestic legislation (including that covering IP) will also be retained and ministers will be given powers to amend legislation so that it works in a post-Brexit world. Whilst this seems straight-forward, as will be seen below, a mere transfer of the legislation will not work from an IP perspective.
Under the Bill, pre-Brexit Regulations, such as those covering EUTMs, EU-wide Designs and Database Rights as well as the Customs Regulation, will automatically become part of UK law on Brexit. However, a mere transfer of the legislation will not work – whether on a transitional or longer term basis – for IP. Take, for example, the position for EUTMs. Even if – as the Government has suggested – all references to the “EU” in “retained” law are amended so that they include the UK, we would end up with a situation where EUTMs are enforceable in the UK but could not be invalidated on the basis of a UK prior right. Likewise, use of an EUTM in the UK alone would not be sufficient to maintain its registration. If we are going to avoid this sort of “cliff-edge” scenario, legislative changes will be needed at both UK and EU level.
Much has been written about what those changes might include. The most likely option seems to be that the UK will implement a mechanism to allow EU-wide rights to continue to have effect in the UK, probably in the form of a “re-registered” UK right. However, there is a considerable amount of detail to be negotiated. For example, will there be re-examination of EUTMs when they are “re-registered” in the UK? What will be the rules on revocation for non-use for the “re-registered” UK portion and the remaining EU-only element of an EUTM (particularly important where a mark has only been used in the UK or only in the rest of the EU)? The position is even more complex for on-going disputes involving EU-wide rights. For example, will UK prior rights continue to be taken account in determining opposition and invalidity actions against pre-Brexit EUTMs where the decision is issued post-Brexit? What will happen to existing pan-EU injunctions? Will the UK courts be able to issue decisions and grant remedies, post-Brexit, where there has been infringement in the UK of an EU-wide right, pre-Brexit? Will res judicata still apply or will parties be able to reopen disputes previously considered past and closed? Will there still be EU-wide exhaustion of rights?
Given the complexity of the issues, it is not inconceivable that an agreement on the detail will not be reached in time. The simplest option would then be to proceed on the basis that the UK is still part of the EU as far as EU-wide IP rights are concerned for a transitional period, allowing time for detailed negotiations. However, the EU could take a more hard line view, unilaterally making whatever changes are needed to deal with existing rights and disputes, leaving the UK to try to work around them. Given that this would be the worst-case scenario for the UK, it seems imperative that an agreement is reached now – either on the full detail or to continue, at least in the short-term, as though Brexit had never happened.
As far as the CJEU is concerned, the Bill makes clear that no references may be made to the CJEU by UK courts or tribunals, post-Brexit. On the face of it, this prohibits any post-Brexit reference (even in cases commenced pre-Brexit). What is not yet clear is what will happen to references pending before the CJEU on Brexit day. Even if the CJEU continues to have jurisdiction to rule on such cases, the Bill suggests that UK courts and tribunals would not be bound to follow any such rulings. If the CJEU does retain power to decide pending references, it is to be hoped that the Bill is amended such that UK courts and tribunals are bound to follow such rulings.
As far as CJEU case law is concerned, the Bill makes clear that all pre-Brexit case law (to the extent relevant to retained laws) will form part of UK domestic law on Brexit, with only the Supreme Court (and the High Court of Justiciary in Scotland) able to depart from it. In determining whether to depart from CJEU case law, these courts must apply the same test as they would apply in determining whether to depart from their own case law. They can, but need not, have reference to post-Brexit decisions of the CJEU. Whilst this will give some element of certainty in the short-term, in the medium- to long-term, UK law is liable to diverge from its EU equivalents. Even in the IP field, it is easy to point to areas where the UK judiciary would want to divert from their EU counter-parts. We can therefore expect many more cases reaching the Supreme court and (ultimately) divergent laws. How satisfactory this will be for those doing business in both the UK and rest of the EU remains to be seen.
Going forward, it also remains to be seen what affect the lack of a court, such as the CJEU, to which questions of legal interpretation can be referred, has on UK litigation. Some have argued that the UK should appoint its own equivalent of the CJEU to which questions of legal interpretation can be referred, post-Brexit, there being an obvious benefit in obtaining the higher court’s ruling. However, others see the reference system as unnecessarily delaying litigation. Given that it seems unlikely that we will get such a court in the short-term, this is likely to be a debate that will run and run.