The EC’s draft Brexit agreement – what does it mean for IP?

The European Commission's Draft Withdrawal Agreement, issued at the end of February, proposes that EU registered or granted IP rights be automatically granted continued protection in the UK without re-examination and without additional charge. While the document is a draft proposal; it looks unlikely that the position will vary considerably from the position outlined given the ‘transition deal’ agreed this week. We examine the implications of the draft proposal.

The draft agreement lays out proposals for managing equivalent protections in the UK on the basis of EU trademarks (EUTMs), International Rights designating the EU, registered and unregistered Community designs, Community plant variety rights, database rights, supplementary protection certificates, and geographical indications, designations of origin and traditional specialities.

In general, the approach taken by the Commission is broadly in agreement with the commercial sector's recommendations, although some matters are yet to be answered, eg exhaustion of rights, and others may be more controversial to some, eg the proposed position on geographical indications of origin and protected designations of origin. As a plus to brand owners, the equivalent protections in the UK would be obtained automatically, free of charge to the rights holder and without re-examination, while maintaining the priority of the Community right.

The grant would be automatic
As per the recommendations previously put forward in its position paper, the EC is effectively proposing that holders of such rights be automatically granted a UK equivalent without the need to make a separate application and without paying any additional charges. That equivalent would share the date of filing/priority of the relevant EU mark, as well as the same term of protection. In addition, a UK attorney would not need to be appointed for the ‘child’ registration until an action is required (e.g. renewal).

In respect of trademarks, the draft also specifies that the UK mark should not be liable to revocation on the ground that the corresponding EUTM had not been put into genuine use in the UK before the end of the transition period. It also states that the owner of a EUTM having a reputation in the EU should be allowed to exercise equivalent rights in the UK.

It is likely that these provisions (relating to revocation/repute) will cause some issues further down the line in proceedings. The proposal would also require the UK to legislate to cover some shortfalls in protection; for example, in terms of unregistered design rights and geographical indications.

Do brand owners need to do anything?
As the EC made clear in its Notice of 22 January: “Preparing for the withdrawal is not just a matter for EU and national authorities but also for private parties. Subject to any transitional arrangement that may be contained in a possible withdrawal agreement, as of the withdrawal date, EU rules on EU trade marks and Community designs will no longer apply to the United Kingdom.” However, the draft agreement certainly suggests that the EC is doing everything in its power to avoid the ‘nightmare scenario’ of IP rights simply falling off the cliff on 30 March 2019.

Nonetheless, companies would be wise to review their current filings and management/renewals strategy to prepare themselves for any action needed to ensure their rights continue to be protected at both EU and UK level post-Brexit. We would advise taking the following steps at present:

• 1. Audit your portfolio and prioritise registrations: Review your current EUTM (and design) portfolio and prioritise rights for action/protection (e.g. between primary, secondary and tertiary registrations).
• 2. Pull out duplicate rights: Identify those EU rights that overlap with existing UK registrations (as separate protection should already exist).
• 3. Weed out waste: Use the opportunity to identify those rights or classes that are no longer relevant, so as to save cost and streamline the portfolio.
• 4. Collate a list of key rights that are potentially ‘at risk’: Identify the EUTM/design registrations that are crucial to your business. Speak to your Novagraaf attorney about whether you should consider registering (not converting) these into separate UK trademark/ design registrations to ensure you will be protected if a deal is not struck.
• 5. Consider associated impacts: For example, implications for existing licensing agreements, injunctions/disputes or anti-counterfeiting strategies (as the UK may no longer be subject to the EU principles on the free movement of goods). We can help advise you on any issues/ queries arising from this action.
• 6. Don’t forget unregistered design rights: The UK has an unregistered design right (UKUDR); however, it does not provide the same protection as the Unregistered Community Design (UCD) – a right which has proved particularly useful as a means of protecting certain ‘short-lived’ aspects of design against copying/interpretation in the EU. UK law may be amended to take into account the differences in protection, but until that takes place, companies would also be wise to identify any key unregistered design rights and consider registering their most valuable designs (i.e. those likely to be copied by third parties) – ideally seeking advice on the matter well before March 2019.

Finally, consider timing: The proposal specifies that the procedure should apply to relevant IP rights filed before the end of the transition period (namely 31 December 2020).

What will it mean for patent rights?
As things stand, there will be no change to the current way in which patents can be obtained, maintained or litigated in the UK. The Brexit vote does not mean the UK ceases to be a member state of the European Patent Convention (EPC) that established the European Patent (EP) system. The EPC is not a direct instrument of the EU legislature; it is a multilateral treaty agreed by the member states that are signatories to it. At present there are 38 member states of the EPC and only 28 member states of the EU. Following Brexit, the UK will become one of the EPC member states that is not an EU member. Even after Brexit, therefore, companies will be able to file an EP application designating the UK. However, in the future, when the Unitary Patent and Unified Patent Court (UPC) system come into being, this alternative way of obtaining a Europe-wide patent and the alternative Court to litigate patents in Europe would in theory not apply to the UK; although the government has still ratified the UPC Agreement.

Impact on representation
Please be assured that Novagraaf will be able to continue to act for you during and following the process of exit from the EU. We are a Europe-wide firm with offices across Europe as well as in the UK.