The IP implications of a ‘no-deal’ Brexit

What happens to trademarks, designs, patents and copyright if the UK crashes out of Europe without a deal? The UK government released a series of guidance papers to address this topic last week.

The new guidance states that ‘a scenario in which the UK leaves the EU without agreement [...] remains unlikely given the mutual interests of the UK and the EU in securing a negotiated outcome'. However, businesses that will be impacted by Brexit, both in the UK and overseas, are justifiably concerned about the perceived lack of progress in negotiations between the UK government and Brussels. Is there anything in the guidance released on 24 September to put their minds at ease?

The four notices look at trademark and designs; patents; exhaustion of IP rights; and copyright. As with all such guidance released to date, the solutions they contain are not certain or complete until the Withdrawal Agreement is (or isn’t) signed on ‘Brexit day’ (by 11pm on 29 March 2019, or later if an extension period is agreed). However, the content they propose is broadly in line with what has previously been discussed or proposed as part of the Draft Withdrawal Agreement.

Trademarks and designs

The paper sets out how holders of EU and UK trademarks, and registered and unregistered Community designs would be affected if the UK leaves the EU in March 2019 with no deal.

In brief:

1. If there is no deal, the UK government will ensure that the property rights in all existing registered EU trademarks and registered Community designs will continue to be protected and enforceable in the UK by providing an equivalent trademark or design registered in the UK;
2. Those new UK rights will be provided with minimal administrative burden, and will be treated as if they had been applied for and registered under UK law; i.e. they will be subject to renewal in the UK, can form the basis for proceedings before the UK Courts and the Intellectual Property Office’s Tribunal, and can be assigned and licensed independently from the EU right/s;
3. Right holders will be notified that a new UK right has been granted. Any business, organisation or individual that may not want to receive a new comparable UK registered trademark or design will be able to opt out;
4. If applications are pending at the time of exit, applicants will have a period of nine months from that date to apply in the UK for the same protections, retaining the date of the EU application for priority purposes, as well as claims to earlier priority and UK seniority recorded on the corresponding EU application (however, right holders ‘will need to meet the cost of re-filing the application in accordance with the UK application fee structure’);
5. The government will work, including with the World Intellectual Property Organization, to provide continued protection in the UK after exit of trademarks and designs filed through the Madrid and Hague systems which designate the EU (this also includes practical solutions for pending applications); and
6. UK applicants, like EU and third country applicants, will continue to be able to apply for protection in the EU through an EU trademark or registered Community design as they do currently.

The guidance also highlights a number of areas where the process is yet to be finalised or addressed, or where additional legislation will be required; namely:

• the UK will create a new unregistered design right in UK law which mirrors the characteristics of the unregistered Community design, so that such designs which also be protected in the UK under the current terms of the unregistered Community design, with no action required by the right holder (this new right will be known as the supplementary unregistered design right);
• provision will be made regarding the status of legal disputes involving EU trademarks and registered or unregistered Community designs which are ongoing before the UK courts and more information will be provided on this before the point at which the UK exits the EU; and
• Businesses, organisations or individuals that have EU trademark or design applications or registrations at the EU Intellectual Property Office and have appointed UK-based representatives to act on their behalf, are referred to the EUIPO’s own notices re: representation after Brexit and/or speak to their representatives to see what procedures they have in place.

On the final point, please be assured that Novagraaf can 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.

Patents

In its guidance on patents and supplementary protection certificates (SPCs) in the event of a no-deal scenario, the notice reaffirms the following:

• The UK’s exit from the EU will not affect the current European patent system, which is governed by the (non-EU) European Patent Convention;
• Once the UK leaves the EU, UK businesses will still be able to apply for SPCs in all remaining EU Member States under the existing system;
• As far as the UK’s own SPC regime is concerned, the intention is to 'provide maximum certainty and clarity' for businesses operating in this important area of innovation: 'We will do this by maintaining the current SPC legal framework in the UK as we leave the EU'; and
• The UK intends to 'explore whether it would be possible to remain' within the Unified Patent Court and unitary patent systems in a ‘no deal’ scenario.  

Exhaustion of IP rights

The UK is currently part of a regional European Economic Area (EEA) exhaustion scheme, meaning that IP rights are considered exhausted once they have been put on the market anywhere in the EEA with the rights holder’s permission. After March 2019 if there’s no deal:

• The UK will continue to recognise the EEA regional exhaustion regime from exit day to provide continuity in the immediate term for businesses and consumers;
• While there will be no change for the importation of goods into the UK, there may however be restrictions on the parallel import of goods from the UK to the EEA. Businesses undertaking such activities may need to check with EU right holders to see if permission is needed; and
• The government is 'currently considering all options' for how the exhaustion regime should operate after this temporary period.

Copyright

Finally, the copyright notice notes that although the rules that underpin copyright legislation in the EU, are based on a number of international treaties, there is a body of EU law on copyright and related rights that goes beyond these, including a number of cross-border copyright mechanisms.

On exit, the UK will be treated by the EU and EEA as a third country and the reciprocal element of these mechanisms will cease to apply to the UK. This is likely to impact:

• Sui generis database rights;
• Portability of online content services;
• Country-of-origin principle for copyright clearance in satellite broadcasting;
• Orphan works copyright exceptions;
• Collective management of copyright; and
• Cross-border transfer of accessible format copies of copyright works (the UK intends to ratify the Marrakesh Treaty after exit but ratification will not have taken place before 29 March 2019).

If you are concerned about how withdrawal of access to any of these mechanisms will impact your business, or if you have any questions about any of these content put forward in this guidance, please speak to your Novagraaf attorney or contact us below.

You can read our latest guidance to businesses in our white paper: 'Brexit: What will it mean for your IP?'. For additional advice on geographical indications (GIs), please see: 'UK announces plans to establish own GI scheme'.