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No deal Brexit: The impact on your intellectual property

On 24th September 2018 the UK Government published four technical notices setting out what it believes are the implications on intellectual property rights (IP) in the UK if the UK were to leave the EU on 29 March without an agreement in place about its future relationship.

In this article we will look at copyright, trademarks and designs, patents and the free movement of goods between the UK and the EU.

 

Copyright

It is important to remember that copyright is in fact a national right which arises automatically and enforced on a national basis through the UK courts. Therefore, and even though copyright in the UK does incorporate some principles from EU law (as well as other international treaties), the UK will continue to apply copyright in much the same way as it does at present.

However, the UK Government’s notice points to areas where current EU member states get additional reciprocal protections and benefits, which may be lost to the UK in the event of a no-deal Brexit. These include:

  • Portability of online content – how consumers can access online content services (e.g. Spotify or Netflix) when they are in another EU member state.
  • Database rights – the application database rights for all UK nationals, residents and businesses throughout the EEA whilst the UK is part of the EU.

 

Trademarks and designs

Trademarks, and specifically European Union trademarks (EUTMs) and Community registered and unregistered design rights are unitary EU rights which cover the whole of the EU. In the event of a no-deal Brexit these EU rights will no longer be enforceable in the UK. The UK Government has said that it will provide equivalent UK national rights to the rights provided by EUTMs. Looking at the effect of a no-deal Brexit on the various rights:

  • EUTMs and Community Registered Designs (CRDs) – holders of these rights will be granted equivalent rights in the UK. The new UK rights will be treated as if they had been applied for and registered originally under UK law.
  • Outstanding applications for EUTMs and CRDs – applicants will have nine months to file for an equivalent UK registered trade mark or design. Anyone looking to make a filing will have to pay for the application at the normal UK rates.
  • International trade marks and Hague system designs – the UK Government has said that it will work with relevant international organisations to secure protection in the UK to trademarks and designs filed through the Madrid and Hague systems in the EU.
  • Unregistered Community designs (UCDs) – current unregistered Community designs will be protected and enforceable for the remainder of their term in the UK.

Patents

As with copyright, there is no EU-wide system to manage patents, in the way there is for trademarks or design-rights. Therefore, regardless of the type of Brexit we have, UK patents will continue to be available both through the UK Intellectual Property Office (IPO) and also through the European Patent Office. As the existing systems operate independently from the EU, there will likely be no direct impact on the way patent law is applied in the UK.

Additionally, the EU’s legislation on supplementary protection certificates (SPCs) which extend certain patent protection on products such as pharmaceutical products and agrochemicals will also be retained. It is likely that these will in the form of a dedicated supplementary protection certificate programme in the UK.

Back when the Brexit referendum vote took place there was a well-advanced proposal for a unified patent court in the EU (UPC). However, these have since been subject to a challenge from other member states (notably Germany). Notwithstanding this challenge, the UK did in fact ratify the UPC, so in the event of a no-deal Brexit the UK may look to remain within the regime (if and when it comes online).

 

Free movement of goods

Currently under anti-competition legislation the owners of intellectual property rights cannot use their international rights (e.g. a national trademark) to stop goods moving freely around the European Economic Area (EEA) once they have been put on the market with the right holder’s consent anywhere in the EEA. For example, if you allow your goods to be sold in France, you cannot use the registered trademark to prevent the goods being sold also in Spain.

If there is a no-deal Brexit the UK will continue (at least to begin with) this arrangement is not likely to change for goods imported to the UK. However, the remaining EU countries may no longer treat goods put on the market in the UK in the same way, so if you do export from the UK to the EU you will need to check with holders of similar trademarks in those countries to see if additional permission is needed.

 

Conclusion

These UK Government notices are helpful, but as with so much relating to Brexit, they are light on detail because there is very little certainty about what sort of deal we are actually likely to get. What they do is set out the UK Government’s likely intentions relating to trademarks and design rights post-Brexit. New UK-rights are very welcome, but the fact that the notices are so light on detail is not helpful when businesses need to make contingencies today for what may or may not happen in six months’ time. In particular, when you consider that the true value or worth of a company readying for sale or merger is dependent on its ownership and enforceability of intellectual property rights, such uncertainty is extremely unhelpful and a direct cause of the downturn in M&A transactions many are seeing in the lead up to March 2019. Greater clarification from the UK Government – and not just for intellectual property – will be welcome indeed.

 

Further information