Managing the uncertainty: Preparing for Brexit

So much of Brexit is up in the air, including the date when the UK’s exit from the EU will even occur. We summarise what we know so far, and how businesses should prepare.

It’s been two years in the making, but there is still much to be agreed in the Brexit negotiations, not least whether the UK will leave via a Withdrawal Agreement with the EU or via a cliff-edge hard Brexit on 29 March 2019. Expect a nervous few months for businesses as the negotiations continue.

What do we know for certain now?

As things stand, the Brexit date is still 11pm on 29 March 2019; however, this could change in the next few days or weeks if Article 50 date is extended.

The scenarios currently on the table include:

• A ratified ‘Withdrawal Agreement’ between the UK and EU with a transition period
  The previously ‘agreed’ Withdrawal Agreement was rejected by the UK Parliament in a spectacular and unprecedented defeat on 15 January 2019. If an ‘amended’ Agreement can be reached before 29 March 2019 (the official exit date), it will also introduce a ‘transition period’ until 31 December 2020. During this period, the UK will no longer be an EU member state, but will be treated as such under European Union law. Such an Agreement does not appear likely as things stand, but this could change.
• A no-deal Brexit
  The UK crashes out of the EU on the 29 March 2019. The ‘no deal’ arrangements for UK TMs and Designs should apply. Click here for more on the UK’s no-deal guidance for IP rights holders.
• An extension to the Brexit date of 29 March 2019
  The UK Parliament has indicated that it would prefer to extend the Brexit deadline to avoid a no-deal exit; however, its 29 January vote was not binding. With the next key vote now likely to take place at the end of this month, what is clear is that time is running out and a delay will almost certainly be necessary if a no-deal is to be avoided.

The positive news for IP rights holders is that the UK’s guidance papers (and available draft legislation) for trademarks, designs, patents and copyright in the event of a no-deal proposes a similar system to that set out in the EU Withdrawal Agreement. This includes, for example, provisions to clone EU trademarks (EUTMs) and registered Community designs (RCDs) at no additional cost to rights holders; although, note that there are still many elements that have yet to be fully discussed and agreed. The Trade Marks (Amendment etc) (EU Exit) Regulations December 2018, The Designs and International Trade Marks (Amendment etc) (EU Exit) Regulations 2019 and The Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2019 are the guiding (draft) legislative measures. While the Regulations have yet to be formally ratified, we understand that, in particular, in the event of a ‘no deal’ scenario on 29 March 2019, they would immediately come into effect.

What should rights holders do?

Practical steps that can and should be taken now include the following considerations:

• Review EUTM and RCD portfolios to consider: whether you wish to retain (or renew) the cloned right in both jurisdictions. Assuming the cloning takes place as per the UK’s published plans, there will also be an ‘opt out’ clause in this automatic cloning.
• Consult with your attorney re: any EUTM or RCD that will still be in its application stage (including applications that are held up by opposition) on exit day, as the application will NOT be cloned automatically on to the corresponding UK Register and a separate application will need to be made to the UKIPO.
• The UK is planning to create a new right, called the Supplementary Unregistered Design Right to ensure that all unregistered Community designs that exist on Brexit day continue to be protected and enforceable in the UK for their remaining lifetime. We have no further details at this stage; however, we also recommend pulling a list together of any unregistered design rights affected in case further action is necessary.
• Coexistence agreements, licences and other IP agreements that cover the EU should cover the cloned UK rights unless there is evidence that such documents were not intended to have effect in the UK. For this reason, we recommend ensuring that the territory clause in agreements for all ongoing matters which include the EU also includes the UK separately.

Speak to your Novagraaf attorney if you’re unsure how to action any of the above items and for advice on any other matters impacted by Brexit. Novagraaf is a pan-European firm, with offices in the UK and Switzerland, as well as across the European Union, meaning that we can continue acting for you in those territories even when changes in representation rules come into effect after Brexit.

As mentioned above, the position in the UK is still very undecided and there is still much that needs to be considered whichever scenario occurs. Rest assured, we are continuing to monitor the situation and we will be in touch with further guidance in the coming weeks.