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Brexit: Implications for Intellectual Property

Brexit: Implications for Intellectual Property

Decisions have now been reached regarding the post – Brexit options for IP. National IP rights are unlikely to be affected but pan-European IP rights will be affected. Trade marks and designs are likely to be the IP rights most affected but it will impact on other IP rights as well.  Whether we will be in a deal or no-deal scenario on exit day is still unclear. However, there are plans in place to ensure the continued protection of IP in both scenarios.

Trade Marks - Significant Impact post Brexit

On leaving the EU, the UK will no longer automatically be covered by EU trade marks.  Under the terms of the current draft Withdrawal Agreement, all EU trade mark registrations existing at the end of the transitional period will be split into UK national and EU 27 registrations.  Therefore, if you own 10 EU trade mark registrations at the end of the transitional period, on the day after you will own 10 UK registrations and 10 EU registrations covering the remaining 27 member states of the EU.  The UK registrations will retain the original filing, priority and seniority dates and the first renewal dates will be the same as the original EU registration.  The division of the registrations will be carried out free of charge. The new UK trade mark registration shall not be liable to revocation for non use on the ground that the corresponding EU trade mark had not been used in the UK.

Pending EU trade mark applications will not be divided and will need to be refiled within a period of 9 months from the end of the transitional period.  The usual fees and forms will be required, but filing, priority and seniority dates will be retained.

If no agreement is reached between the UK and the EU, the UK is currently due to leave the EU on 31st January 2020.  The UK government has committed to implementing similar steps as set out above in relation to EU trade mark registrations and applications to take effect from exit day.  In the case of existing EU registrations, comparable UK marks will be created automatically at no cost. However, holders of EU applications will need to be refiled in the UK within 9 months with the usual fees applying.The UK government also confirmed that it will provide holders of existing International Registrations designating the EU with an equivalent UK domestic trade mark.

New EUTM filings after the transitional period or post exit (as applicable) will not extend to the UK (they will be limited to the remaining 27 EU member states). Trade mark owners will need to seek national protection in the UK for their trade marks. Application through the Madrid Protocol will still be available for International Registrations designating the UK.

The UK court system will no longer have EU trade mark courts after the transitional period or post exit (as applicable). EU trade mark holders will not be able to enforce them in the UK and obtain pan-EU injunctions under the EUTM Regulation. UK Courts will, of course, have jurisdiction over infringement of UK trade marks.

UK trade mark laws may develop independently over time and diverge from EU trade mark laws. CJEU decisions will not be binding but are likely to be persuasive. However, the UK government has already implemented the new Trade Marks Directive (in line with the already in force new CTMR).

Designs – Significant Impact post Brexit

Existing Registered Community Designs(“RCDs”) will also be split in the same way as EU trade mark registrations, but again pending applications will need to be refiled.   Post exit or after the end of the transitional period (as applicable), designers will need to seek national protection in the UK for designs in addition to RCD protection in the EU. Cloning rights are also provided for in relation to Unregistered Community Design Rights (“UCDRs”) in both deal and no-deal scenarios.

The UK government has now ratified the Hague Agreement which means that design owners will be able to take advantage of the centralised process for international design registration.

Current UK unregistered design right does not provide the same protection as UCDR e.g. surface decoration, texture and colour are not covered. However, the UK government has committed to introducing legislation to mirror the benefit of unregistered community design right protection in the UK to protect designs that are first disclosed in the UK after exit day. This is significant for short life designs, e.g. fashion, where the informal three year protection without registration provides valuable temporary protection from copying.

Patents – Potential Significant Impact on Unified Patent Court and Unitary European Patent Regime post Brexit

Current European Patent Regime: It is important to note that the UK’s exit from the EU will not affect the current European Patent system, which is governed by the European Patent Convention. Businesses can continue to apply to the European Patent Office for patent protection which will include the UK. Existing European Patents covering the UK are also unaffected and European patent attorneys based in the UK will continue to be able to represent applicants before the EPO.

Supplementary Protection Certificates: While the UK remains a member of the EU, businesses can continue to apply for and be granted SPCs using the current system. Once the UK leaves the EU, businesses will still be able to apply for SPCs in the remaining EU Member States under the existing system. The UK Government has introduced legislation to maintain the current SPC framework in the UK after it leaves the EU.

Unified Patent Court: Whilst the UK has now ratified the UPCA, the legal challenge to ratification currently before the German Constitutional Court, together with political uncertainties surrounding Brexit, are adversely impacting on the timetable for the introduction of the new regime. It seems increasingly unlikely that the UPC will come into being prior to the UK’s exit from the EU, which in turn casts serious doubt on the UK’s participation in the future.

If the UPC did come into being prior to exit day, the interesting question is whether the UK could continue to participate in the UPC regime after its exit. The UK Government has noted that the UPCA is an international treaty and that the international court will have jurisdiction over patent disputes across its contracting states. However, the Government has also noted that the unique nature of the proposed court means that the UK’s future relationship with the UPC will be subject to negotiation with European partners as the UK leaves the EU. The continuing participation of the UK and any participation of other non-EU countries, such as Switzerland, would certainly require amendment of the UPCA. It is thought that this is a possibility, but the question is whether there is enough support to make this happen?

Unitary European Patent: Whilst the UPC is underpinned by an international treaty that could be amended to allow the UK to continue to participate following Brexit, the Unitary European Patent arises from two EU Regulations. If the scope of protection of Unitary European Patents is to extend to the UK following Brexit, a new agreement will be required between the UK and the EU.

Other IP – Lower Impact post Brexit

Copyright - No significant changes post Brexit as copyright law is largely national (although based on several EU directives and regulations). There is likely to be an impact on some cross border issues once the UK is not subject to EU laws and/or following some divergence of UK and EU laws.

Databases - Sui generis database right is implemented in the UK by regulation but qualification for database right is by reference to membership of the EEA. The UK and the EU have agreed that the holder of a database right in respect of the UK which arose before the end of the transition period shall maintain an enforceable right affording the same level of protection and for an equivalent remaining term. If there is no agreement the government will provide that databases that exist on exit day will continue to enjoy protection and a new database right will exist post exit.

eu domains - Domain name .eu will not be available for UK national businesses to use, but pan EU business can register .eu domains though an EU based subsidiary or agent.

Action Points

Portfolio management: Review filing / brand protection strategies now. Consider filing UK national applications in addition to EUTMs and renew UK TMs rather than allowing them to lapse because seniority has been claimed. Consider potential non - use of EUTMs as if the only use is in the UK, the EUTM will become vulnerable to cancellation 5 years after the UK exits the EU (or 5 years after the end of the transition period). Also consider the need to file EUTMs if the need for future protection in the EU is anticipated.  

Consider filing national registered design applications in the UK, as well as RCDs.

Enforcement: Consider a revised litigation strategy pre-Brexit to obtain the most effective remedies in the long term. In particular, seek to conclude existing or potential litigation within an expedited time frame. Anti-counterfeiting programmes may also need to be reviewed, particularly the filing of customs notifications in the EU and UK.

Commercial agreements: Consider the potential impact of Brexit on various clauses such as territory, force majeure, material adverse change, governing law and jurisdiction.  Any references to EU legislation will need to be considered.

IP and transactions: consider the impact of Brexit on due diligence, licences, assignments and security over IP. Consider the need to record existing licences and security interests against comparable trade marks.

The IP team collaborated to create the above guide, for more information please contact Mary Bagnall at mary.bagnall@crsblaw.com or (0)20 7203 5081.

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