On 21 September last, the European Commission published a position paper to the EU-27 outlining the proposed starting point for future negotiations with the UK on its withdrawal from the EU in the area of protection of intellectual property rights (“IPR”). In this regard, the paper identifies five general principles which should be applied in accordance with EU law as interpreted by the Court of Justice of the EU as of the date of entry into the withdrawal agreement with the UK. These general principles broadly relate to the following issues:

  1. protecting existing IPR;
  2. future IPRs;
  3. supplementary protections;
  4. database rights; and
  5. exhausted rights.

It should be noted that the concept of IPR having a ‘unitary character’ as mentioned throughout the paper refers to rights granted by EU law on an EU wide basis such as EU trademarks, community designs and geographic indications. The Unitary Patent System, is not addressed in the paper and will be considered in greater detail below.

1. Protecting Existing IPRs

The Commission contemplates the automatic recognition of existing IPRs in the UK with no extra cost to the holders of the IPRs. The paper proposes that, if needed, domestic legislation be enacted in the UK to ensure comparable rights protections for IPRs of unitary character granted before withdrawal.

This principle should equally apply to protected geographical indications (PGIs) and protected designations of origin (PDOs) such as Stilton cheese, Parma ham and Cumberland sausages. The Commission notes that, at present, there is nothing in UK domestic legislation protecting PDOs and PGIs.

2. Future IPRs

Where an application for IPRs with unitary character is made before the date of withdrawal, the decision on which is still pending after withdrawal, the applicant should be entitled to benefit from priority in respect of any application for an equivalent IPR in the UK after withdrawal.

3. Supplementary Protections

A person who has applied in the UK for a supplementary protection certificate or an extension thereof which application is still pending on the withdrawal date, should continue to be entitled to obtain these protections to a level equivalent to those afforded by EU law.

4. Database Rights

Those afforded protection under the Database Directive 96/9/EC should continue to benefit from that protection in the UK post-Brexit. The paper also calls for reciprocal protections for UK nationals and companies operating in the EU-27 suggesting that certain provisions of the directive should be disapplied to ensure there is no exclusion from protection on nationality or establishment grounds.

5. Exhausted rights

IPRs exhausted prior to the withdrawal should remain exhausted both in the EU and the UK with the conditions for exhaustion being those as defined by EU law.

Brexit & the unitary patent system?

Interestingly the paper is silent on Unitary Patents and the Unified Patent Court (“UPC”). Presently a ‘traditional’ European patent can be thought of as a series of patents issued at a national level via a single European procedure established by the European Patent Convention. It follows that should there be a dispute, currently it must be litigated on a country by country basis which is both costly and time consuming for those concerned.

All of the EU member states except for Spain and Croatia are participants to the UPC agreement though it remains to be ratified in a number of Member States where ratification is necessary including Ireland. Decisions of the UPC would be enforceable in all countries which have signed the agreement. This would rectify the current situation whereby a rights holder would have to litigate concurrently in multiple jurisdictions and not be guaranteed that the courts in each would come to the same conclusion.

As recently as November 2016, the UK signalled its commitment to ratify the UPC Agreement with the UPC Committee saying the court could be operational before year end. However a challenge in the German Constitutional Court (Bundesverfassungsgericht) means that implementation is likely to be delayed into 2018.

What will happen come deadline day on March 2019 remains to be seen. Though only open to EU members at its inception, theoretically given the UPC Agreement is an intergovernmental measure, there may still be some scope for the UK to remain a part of it. Whether such a solution, which would require amendment to the existing agreement, is palatable to the other signatories is another question entirely.

There is a much bigger issue however, as the UPC will be beholden to the Court of Justice of the European Union and is bound to accept the supremacy of EU law, which as has been made patently clear is a red-line issue for Teresa May and her government.