Intellectual property and parallel imports: Have your say

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While it is tempting for politicians to say that Brexit is now considered to be “done”, the road map surrounding intellectual property (IP) rights is still to be finalised, as Walker Morris IP expert Sarah Williams explains.

What has happened and why is it important?

The UK Intellectual Property Office (IPO) is currently consulting on issues surrounding the exhaustion of IP rights and is encouraging UK businesses to share their views.

Now that the UK has left the EU, the UK is no longer bound by EU laws concerning this practice. The UK has an opportunity to decide how the principle of the exhaustion of IP rights is handled in the future.

This decision is crucial for UK businesses and rights owners across many different sectors as it will govern future rules on parallel imports into the UK.

What is IP?

IP refers to works such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.

IP is protected by rights including patents, trade marks, designs or copyright. These rights are protected by virtue of law so that the owners of such rights can control their use.

What is a parallel import?

A parallel import is where a genuine branded good is imported into a market and sold there without the consent of the trade mark owner. These goods are sometimes also referred to as “grey goods”.

What do we mean by “exhaustion of rights”?

Prior to Brexit, IP rights would be considered to be “exhausted” in the rest of the European Economic Area (EEA) if the goods were first placed on the market within the EEA, by or with the right owner’s consent.

This meant that goods could freely be both parallel imported into the UK from the EEA and parallel exported out of the UK to the EEA, provided that they were originally put on the market within the EEA by or with the right owner’s consent.

Currently, the UK is participating in the EEA exhaustion of rights practice which means that rights are exhausted in parallel imports from the EEA into the UK.

However, since Brexit, IP rights in goods first placed on the market in the UK by or with the consent of the right owner are not considered to be exhausted in the EEA. This means that right owners can stop the parallel export of these goods into the EEA and exporters therefore need to ensure that they have the permission of right owners to be able to export from the UK into the EEA.

The consultation

While parallel importation of goods from the EEA into the UK is currently permitted, it is right to examine whether these arrangements best serve the UK’s interests now that it has left the EU.

The IPO is therefore seeking views on what exhaustion regime should be implemented and, if there is to be a change, how it should be implemented.

The consultation document refers to the following options:

According to the document, the government believes that, based on the outline of the different options discussed within it, there are three that are more readily reconcilable with the Northern Ireland Protocol. These are: a continuation of the unilateral regime that came into force on 1 January 2021, otherwise known as the UK+ regime; an international regime; and a mixed regime.

The IPO is encouraging businesses to respond to the consultation and provide their opinions on the way forward for the UK.

Next steps

Anyone wishing to express their opinion and contribute can do so until 23:45 on 31 August 2021. The consultation and response form can be accessed here.

How we can help

Our award-winning team offers specialist advice across the full spectrum of IP law. If you have any queries concerning the exhaustion of rights, or need any advice or assistance in relation to the development, marketing and protection of your IP, please contact any member of the team and we will be very happy to help.