A referendum will be held in the United Kingdom (“UK”) to decide whether it remains within or withdraws from the European Union (“EU”) on June 23rd 2016. If the UK were to leave the EU in a move dubbed as “Brexit”, what effect would this have on the protection and enforcement of IP rights? Although the terms of an exit would be negotiated between the UK Government and other EU Member States, there are certain to be some consequences for IP rights should the UK exit the EU.
Regardless on how the vote on Brexit plays out, the UK’s participation in the European Patent system would remain unaffected. This system is governed independently of the EU, with the European Patent Convention being the body sanctioned with the control and granting of European Patents. The European Patent Office does not distinguish between EU Member States and non-EU Member States (such as Switzerland and Turkey).
However it is worth noting that the majority of EU Member States are in the process of establishing a new EU-wide patent system (called the Unitary Patent) which would include its own court structure. As the Unitary Patent is an EU initiative and participation is contingent on being a member of the EU, the UK would no longer be eligible to participate without further legislative measures. A Brexit vote would also postpone the introduction of the Unitary Patent as the legal framework would have to be amended.
Brexit would have adverse effects on EU Trade Marks (“EUTMs”) previously known as Community Trade Marks. EUTMs was established by EU legislation and gives protection to Trade Marks throughout the EU. In the event of a Brexit, existing EUTMs would cease to cover the UK and brand owners would (if permitted by legislation) have to convert their EUTM in the UK to a national right or alternatively, file a separate application for UK trade mark protection to accompany their EUTMs. Furthermore pan-European injunctions based on EUTMs would no longer extend to the UK which means that applicants seeking an injunction would have to file two sets of proceedings, one in an EU Member States to prohibit infringement in the EU and another in the UK in respect of the UK infringement (thereby increasing litigation costs).
The system for Registered Community Designs (“RCDs”) is similar to the EUTMs system which means that in the event of a Brexit, RCDs would no longer cover the UK. Brand owners would then (if permitted by legislation) have to convert their RCD in the UK to a national right or alternatively, file a separate application for UK design protection. In addition, unregistered community design rights would only provide protection for the remaining parts of the EU.
If the UK decides to leave the EU, it will have at least 2 years to negotiate the terms of its exit, thereby giving businesses time to review and optimise their IP rights.
They will need to identify those agreements where EU is the defined territory as well as supplement their IP portfolio with UK national IP rights and if relevant to their business operations, start using its EUTMs widely (preferably in an EU Member State other than the UK). While businesses will have time within which to prepare for a Brexit, there is no time like the present to review your IP agreements and rights.