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Brexit: The implications of the vote to leave the EU for intellectual property laws

Intellectual Property Print publication

24/06/2016

In common with other subject matters considered in this newsletter, the short answer is that we don’t know yet what the impact of the UK decision to leave the EU will be. Withdrawal does not take effect immediately and there will now follow a period of time – the EU Treaty stipulates two years though this may be extended – during which the post-Brexit trading terms will be negotiated.

EU Trade Marks and Registered Community Designs

The UK Intellectual Property Office (UK IPO) administers national intellectual property rights but many UK businesses seek protection at the EU level, notably through the EU Trade Mark (EUTM) (formerly known as the Community Trade Mark) and the Registered Community Design (RCD).  An EU registration is a cost-effective means of obtaining protection both in the UK and wider EU.  Once the UK leaves the EU, EUTMs and RCDs will cease to have effect in the UK.  Transitional conversion provisions will be needed for existing EUTMs and RCDs to cover the UK.  Assuming that does happen, thought will need to be given to how those “successor rights”, for want of a better phrase, impact existing agreements, such as licences or security documents.

Applicants will need to decide whether to pursue separate applications in the UK and the EU and, where dual applications are pursued, there will be an increase in costs compared to what applicants are currently paying. We may also see UK-only applications start to take longer as the UK IPO finds itself suddenly responsible for the registration of many more marks than is currently the case.

There is a related issue around proof of use. Where the use of an EU trade mark is primarily in the UK, and the UK no longer forms part of the EU, the validity of the EU registration may be called into question.  It is to be hoped that this will be addressed in legislation to be finalised before the UK finally leaves.

In similar vein, UK-based reputation/goodwill (where the reputation/goodwill in the EU is negligible) or a UK trade mark may not be able to prevent the registration of a competing EUTM.

Another consequence of Brexit for trade mark proprietors will be that it will not be possible to obtain an EU-wide trade mark injunction from a UK court. Proprietors will have to bring proceedings in an EU member state to get an injunction that covers the EU.

Over time, we can expect to see UK trade mark and design law diverge from their EU counterparts.

Existing UK registered rights – for trade marks, designs and patents – will not be affected by Brexit as these are UK rights only.

Copyright

Copyright is less obviously impacted by Brexit. There is no system of copyright registration in the UK or EU and copyright laws are national laws, albeit often implementing EU directives, notably the Information Society Directive [1]. At the moment there is a substantial degree of harmonisation of copyright laws among EU Member States – although the European Commission would prefer to see more.  In time though, we can expect to see UK copyright law tread an increasingly divergent path.

Patents

Patents too will be less affected by Brexit than trade marks. This is because, contrary to what one might think at first glance, the European Patent Office (EPO) is not in fact an EU institution but rather originates from the European Patent Convention.  The EPO creates a single patent grant procedure such that once a patent is granted by the EPO it is effectively converted into a bundle of national patents.  A patent granted by the EPO that is effective in the UK now will therefore continue to be effective post Brexit.  The same cannot be said of the EU Unitary Patent (which provides for an EU-wide patent), something of an irony given how long it has taken for the Unitary Patent to come to fruition and given how close it now actually is.  The Unitary Patent would not cover the UK (although UK inventors would still be able to apply for one) and, from the European perspective, the whole project loses some of its lustre if the UK is not covered,

Licensing agreements

Licensing agreements should be reviewed for an assessment of the consequence of the UK leaving the EU. For example, is there a defined term “EU”, which could mean the loss of exclusivity in the UK for a licensee of intellectual property, should the UK leave (the same consideration would apply to a distributorship agreement and other types of commercial contract)?

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[1] Directive 2001/29/EC

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