Brexit: what it means for Intellectual Property

Brexit: what it means for Intellectual Property

As members of the UK’s parliament continued to slog it out over the Brexit Bill (the UK negotiating with itself), the European Commission and UK published a joint statement[1] on how negotiations between the EU/UK are progressing in preparation for the UK leaving the EU in March 2019. The joint statement offers a handy update on where things stand regarding the Draft Withdrawal Agreement[2] (‘DWA’), published earlier this year in March. The good news is that as far as intellectual property is concerned much appears to be agreed, giving some certainty for rights holders at least until the end of the Transition Period (‘TP’). What happens thereafter turns on the future relationship struck between the UK and EU.   
 
Ahead of the UK and EU returning to the negotiating tables at the end of June 2018 in Brussels, we assess the current prospects for EU/UK IP rights holders. 

What is the DWA and the Transition Period?

The UK is set to leave the European Union on 30 March 2019. On its original drafting, the DWA translated the first phase of negotiations between the EU and UK in to legal terms and provides the basis for a sensible transition arrangement for current registered EU IP rights holders (as well as some affiliated IP rights noted below). 
 
The TP is the period between 30 March 2019 and 31 December 2020 (on the current drafting). The DWA also offers some certainty for those seeking to file and protect rights in the EU and UK beyond December 2020, that is if you can identify and apply to register those rights before the end of the TP. 
 
During the TP, EU law shall be applicable to and in the UK (with some exceptions). The UK will continue to be bound by obligations stemming from international agreements concluded by the EU on behalf of the UK (as a Member State). 

Which IP rights are affected?

For owners of European Trade Marks (EUTMs), Community Registered Designs (CDRs) or plant variety rights, registered or granted before the end of the TP, the DWA states that a comparable equivalent UK right should be conferred without re-examination. For EUTMS, the UK mark would take the filing/priority date of its EU ‘cousin’ (as we are naming it). Some restrictions will exist for revocation proceedings and if a mark owner seeks to establish a reputation for the UK cousin, that reputation can be one established in the EU.    
 
For CDRs and plant variety rights, the term of protection for the UK right would be at least equal to the remaining period under the EU right and the filing/priority date for the UK cousin would be the same as the EU right.

How would the ‘cousin’ UK IP right formally arise? 

On the DWA drafting (it becomes apparent that the European Commission provided the original text), the proposal is that there should be no formal registration process for the creation of the equivalent UK rights. The UK right should be established via operation of law and a rights holder should not be expected to undertake any administrative procedures, nor be required to have a correspondence address in the UK (unless the right is later renewed in the UK, at which point the respective UK fees would be triggered). It also states that the comparable rights would be registered/granted free of charge by the relevant UK entity (e.g. the UKIPO) using data from the EUIPO, Community Plant Variety Office and the Commission. We look forward to agreement being reached on these provisions in the upcoming negotiations.      
 
Another notable element which is important for IP rights holders to be aware of is the now agreed sunset clause on the UK’s access to data held by EU registries/institutions:
 
“At the end of the transition period, the United Kingdom shall cease to be entitled to access any network, any information system, and any database established on the basis of Union law. The United Kingdom shall take appropriate measures to ensure that it does not access a network, information system, or database which it is no longer entitled to access”
 
While there are some derogations from the above (including customs and VAT data) access to data relating to IP rights held by relevant EU institutions would be given on the current basis only until the end of the TP. Again, we await further clarity on the UK’s ‘behind the scenes’ access during the forthcoming negotiations.

What if your application is pending? 

If you have an application pending for an EUTM or plant variety right which was filed before the end of the TP, on the current agreed drafting, the DWA allows you to claim priority for your UK application. We presume that this could also apply to CDRs but as it stands, there is some ambiguity as the title of the relevant Article does not match the provision’s content.    
 
For a UK trade mark application, priority can be claimed for the same mark filed in relation to identical goods/services. Priority is claimed from the filing date of the EU mark and the owner shall have a priority right in the UK for the duration of the TP plus 9 months after. A similar approach is envisioned for Community plant variety rights (TP plus 6 months after) for determining distinctiveness, novelty and entitlement. 

International registrations designating the EU

If the registration of a trade mark or a design under the Madrid system or Hague system designates the EU before the end of the TP, that right should continue to enjoy protection in the UK for those international registrations.

Unregistered Community designs

 If an Unregistered Community design right (UCD) arises prior to the end of the TP, the DWA allows for an equivalent right to be afforded protection under UK law (3 years from when the design was first made available in the UK). The term of protection should be at least equivalent to the remaining period of the corresponding UCD.
 
This proposal seems straightforward but there are degrees of variance between the features of a UCD and the UK’s unregistered design right, not just the term of protection conferred. Again, we await further clarification and will keep you up to date.

Exhaustion

The Commission proposed that if an IP right is exhausted in the EU and the UK before the end of the transition period, it shall remain so in both the EU and UK. This proposal is pragmatic and gives rights holders some degree of certainty for goods place on the EU/UK market/s at least until the end of the TP. Once the TP has ended, things are less clear. 
 
Exhaustion under current EU provisions is confined to products placed on the market in the EEA, irrespective of where the goods were manufactured. As the future status of the UK within the EEA is still unresolved, it is unclear as to what national legislative amendments will be required in order to define whether rights to goods placed with consent on the UK market after the end of the TP would be exhausted nationally, in a territory defined to reflect whatever relationship with the EU is eventually reached, or more controversially, internationally. 

Database rights in the UK?

On the agreed drafting, if a database right arose before the end of the TP, that right should remain an enforceable IP right in the UK (as provided under UK law) with protection equal to that of the equivalent right in the EU. The term should be at least equivalent to the remaining period of the corresponding EU right.
 
The database protection right was harmonized by the Commission under the Database Directive and now arises under both copyright and as a unique right for a database in which ‘substantial investment’ has been made. The database right has been criticised for being overly protective but has now been curtailed by the evolving jurisprudence of the CJEU. The Commission conducted a second consultation on database protection but the outcome of this has yet to be published. What the UK will do with the database right in a post Brexit landscape will require careful consideration. 

Supplementary Protection Certificates

The DWA suggests that current EU provisions should apply to Supplementary Protection Certificates (‘SPCs’) for plant protection products, medicinal products or extension applications for these, which are submitted to a relevant UK authority before the end of the TP if the administrative procedure for granting or extending the certificate was ongoing. If the certificate is granted under the transition provisions, the SPC should provide the same protection as under the current EU provisions. 
 
At the end of April 2018, the European Commission released a notice to stakeholders which set out a more detailed position on this. See Nick Bassil’s note here. SPCs are an area where we look forward to further clarification from the EU/UK. 

Anticipating agreement

As noted above, we are following the negotiations with interest particularly in areas where the EU/UK have not yet reached agreement:

  • SPCs

  • Geographic indications

We will keep you up to date on any developments. 

And now, the end is near

It should be noted that on its current drafting, any dispute regarding the provisions contained within the Withdrawal Agreement would be submitted to the Joint Committee but thereafter, could be referred to the Court of Justice of the European Union (‘CJEU’) whose decision would be binding on the EU and UK. This provision is not curtailed by the TP and is an ongoing dispute resolution obligation. 

Concluding on nothing or everything

The DWA is still, of course, a draft document and the negotiations continue. It is interesting that the header to the recent joint statement repeats the UK’s tagline position of ‘nothing is agreed until everything is agreed’. The Withdrawal Agreement, and the provisions discussed above, will only become effective once signed. We will keep you updated on how things progress and are optimistic that the EU and UK can find a way to protect IP rights holders’ interests both during the TP and beyond.             
 
For more information on how Brexit might affect UK/EU IP rights, contact Philippa Malas. Having spend time at the European Court of Justice in Luxembourg, Philippa has a unique insight on European legal issues and the relationship between the EU and UK.
 


[1] https://ec.europa.eu/commission/sites/beta-political/files/joint_statement.pdf

[2] https://ec.europa.eu/commission/sites/beta-political/files/draft_withdrawal_agreement.pdf

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