With or Without EU: A Re-United Kingdom on IP Rights?

19 September 2018

Author: Shannon Gawley
Practice Area: Commercial Law
Sector: Brexit

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Since the UK’s decision to leave the EU on 26 June 2016, the intellectual property (“IP”) regime has been faced with a period of legal uncertainty. Many questions have arisen surrounding the future of EU Trade Marks, Registered Community Designs and the representation rights of UK lawyers before the EUIPO. With no clear answer in sight, the question of whether this would be a ‘make or break’ of the IP status quo has remained open-ended.

Fortunately, the publication by the European Commission of the “Draft Agreement on the withdrawal of the UK from the EU” (“Draft Agreement”) has shed some light on the subject. Perhaps of most interest to IP right owners are the key provisions relating to a post-Brexit transitional period and future correlative EU IP rights at the expiry of such period.

Whilst certain terms remain a matter of negotiation, the IP community can take comfort in knowing that Articles 121 and 122 of the Draft Agreement envisage a transition period for the UK from 29 March 2019, the date of the UK’s formal withdrawal from the EU, to 31 December 2020. During this time, EU law will remain enforceable in UK courts and any reference to a Member State shall be understood to be inclusive of the UK. While some have welcomed this clarification, others have argued that there is still significant detail to be filled in. Nonetheless, if anything, the transitional period provides both time for Brexit preparation and a guarantee that there will be no change during this period in the status quo in the IP regime.

So how will this affect IP rights? Articles 50 to 57 of the Draft Agreement set out a number of provisions regarding the protection and registration of IP rights in the UK following the end of the transition period. The key provisions of the Draft Agreement, in relation to trade marks, patents and design rights, can be summarised as follows:

Trade marks

After the transition period, the expectation is that a mechanism will be introduced to afford holders of an EU-wide unitary trade mark with the same level of protection they possessed pre-Brexit. In practice, this would allow an EU trade mark owner to become the owner of a comparable registered and enforceable IP right in the UK. This, in turn, would allow questions of infringement and validity to become a matter for the UK courts to determine rather than the EU Intellectual Property Office (EUIPO) and the EU trade mark courts.

With regards to international registrations, the UK will take similar measures to ensure that those who have obtained protection for international trade marks or registered designs prior to the end of the transition period will continue to benefit from protection in the UK.

Patents

The Draft Agreement does not make any reference to patents. As the European Patent Organisation (“EPO”) is independent from the EU, protection for European patents granted in the UK will continue to be available through the EPO post-Brexit, even in the event of a “no deal” situation.

However, whilst a “no deal Brexit” may not significantly impact the existing patent systems, the same cannot be said for its effect in relation to the Unified Patent Court (“UPC”). This is due to the fact that the UPC primarily draws upon aspects of the EU’s legal system and, in particular, the Court of Justice of the European Union (CJEU). This obstacle creates a significant degree of uncertainty given the lack of a ‘Brussels’ regime and governance in a post-Brexit era.

Design rights

Similar to trade mark owners, those benefitting from Unregistered Community Design rights (“UCDRs”), which arose before the end of the transition period will become the holder of an equivalent right in the UK, with the same level of protection and for at least the same term (i.e. 3 years).

The points above reflect the determination of the UK and the EU’s agreement to make provision for the continuity of IP rights post-Brexit. As mentioned above, Article 50, in particular, confirms that all existing registered EU IP rights will be duplicated as comparable UK national rights at the end of the transition period. Further, despite the notable progress, the Draft Agreement lacks certainty regarding how these comparable rights will be transposed in practice, specifically with regards to the costs and administrative burdens.

In summary, the post-Brexit landscape for IP rights is difficult to predict in detail. However, the Draft Agreement should provide some certainty about the likely outcome of Brexit for this sector. Furthermore, it is noted that even those provisions which have been “agreed” are subject to technical legal revisions until the final agreement is published next month. So, can the UK live with or without the EU? Only time will tell. But one thing is for certain, they won’t be giving their IP rights away.

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