A No Deal Brexit and Its Impact on Intellectual Property Rights

In light of a possible no deal Brexit, businesses need to consider the impact such a scenario would have on their intellectual property rights, in particular trade marks, designs, patents and copyrights. For the majority of these rights protected under EU law, existing on a pan-EU basis, an equivalent UK right will be granted. Some rights, however, may require businesses to consider reviewing current agreements or to refile registration applications to ensure that existing rights will continue to have the same protection once the UK has left the EU.

Trade Marks and Community Designs 

The draft agreement on the withdrawal of the UK from the EU sets out the position reached at a negotiator’s level between the UK government and the negotiators of the EU. The enforceability of this agreement is subject to a Brexit deal being reached and consequently any guidance taken from this agreement should be treated with caution. However, IP owners are likely to take some comfort from its content and the further guidance published by the UK government. 

The UK government will almost certainly put in place measures to ensure that any registered trade marks, registered Community designs and unregistered Community designs will continue to be protected when the UK leaves the EU. Further, although the registration procedure for these protections is yet to be agreed, the government has stated that these protections will be granted at no cost and with minimal administrative burden on the right-holders. 

Registered Trade Marks 

The UK government will provide an equivalent UK registered trade mark in respect of all existing EU trade marks registrations (“EUTM”) at the date of the end of the transition period, December 31, 2020. This comparable UK right will be automatically granted with the same filing and priority rights and without re-examination of the EUTM. Any right-holders will be notified when the equivalent UK rights have been granted to them. The government has also stated that this system will work on an opt-out basis and therefore right-holders will have the opportunity to opt out of receiving the new comparable UK registered trade mark. 

EUTM applications which are ongoing at the end of the transition period, on eventual registration, will only be registered in the remaining 27 member states. To avoid any loss of rights for these brand owners, applicants will have a right to file a corresponding application to the UK Intellectual Property Office in the nine-month period from the end of the transition period. During these nine months, any applications will retain the EU application date. Any businesses with trade marks caught up in lengthy opposition proceedings will need to consider an additional filing in the UK. 

The draft agreement also states that “the trade mark shall not be liable to revocation on the ground that the corresponding European Union trade mark had not been put to genuine use in the territory of the United Kingdom before the end of the transition period.” Right-holders will therefore have an additional grace period in which to commence use of the trade mark in the UK before the new UK registration becomes at risk of being cancelled for non-use. It is not yet clear how long this grace period will be. Alternatively, a brand owner could consider re-filing the trade mark registration. Further, the UK equivalent trade mark shall benefit from the reputation acquired by the EUTM. 

Community Designs 

The same protections will be granted for Community designs in the UK, by use of an equivalent process to that used for registered trade marks. Further, all unregistered Community designs which are in existence at the end of the transition period, will continue to be protected and enforceable in the UK for at least the remaining period of protection for each of these rights. Also within this period, they will continue to be protected in the EU. The UK government has also stated that it will create a new UK unregistered design right which will mirror the existing EU right. Consequently, any designs disclosed after the UK leaves the EU will automatically be protected under the current terms of the unregistered Community design. This leaves to one side the thorny issue of in which territory did first use arise. The new UK equivalent right will be known as the supplementary unregistered design right and the protection of these rights will be automatically granted. 

The UK government has stated that it will also continue to work with the World Intellectual Property Office to ensure that in the UK there is a continued protection of trade marks and Community designs, which designate the EU, and are filed through the Madrid and Hague systems. This includes practical solutions for pending applications. 

Implications for Brand Owners 

Whilst it is possible the UK might find itself exiting the EU without a deal in place, it is likely, although not definite, that even in this scenario the government will stay true to its current guidance and create these comparable UK rights. Further, it is likely that these conversions will be made at no cost to the brand owner. Many right-holders have previously taken the decision to re-register their EU rights in the UK, however, given the UK government’s recent announcement, this may no longer be the best commercial action going forward. From early 2019 onwards, as a matter of good practice, brand owners should consider re-filing, especially where applicants are facing opposition in respect of pending applications, to ensure that these rights are protected once the UK leaves the EU. 

Litigation 

The UK government is yet to provide guidance on the status of any ongoing legal disputes in respect of EU registered trade marks or registered or unregistered Community designs at the end of the transition period and the UK government will provide more guidance on this at a point before the UK leaves the EU. Pending further guidance, it is possible that as these rights will continue to be protected in substantially the same way as they are currently, these disputes will continue to be heard by the court before which the case was brought and any judgments handed down will continue to be enforceable in much the same way. 

Copyright 

The position in relation to copyright laws in the UK will remain largely unchanged. This is in part owing to the UK being a party to the main international treaties on copyright and related rights. As such Treaties underpin the UK’s copyright legislation and membership of these treaties is not affected by the UK’s membership of the EU, leaving the EU will not have a significant impact on the UK’s position on copyright laws. The main international treaties include the Berne Convention, the Universal Copyright Convention, the Rome Convention and the WIPO Copyright Treaty, and these treaties provide copyright protection for works originating in or made by nationals of other treaty members. For example, the Berne Convention states that works originating in one contracting state must be given the same protection in each of the other contracting states that those states would give to their own nationals. 

Further, under the EU Withdrawal Act 2018 (the “Withdrawal Act”), any EU legislation, including the cross-border mechanisms (as set out below), will be implemented in UK law. However, the reciprocal element of these mechanisms will cease to apply to the UK which means that although EU member states will likely to continue to be able to benefit from these provisions from the UK (providing the UK government chooses to grant these protections to the EU, as expected), UK businesses will not be able to benefit from these provisions from the EU, unless the EU passes new legislation to grant such permissions. Consequently, businesses should consider whether new agreements, such as additional permissions in respect of broadcasting arrangements, need to be negotiated. 

Sui generis database rights. Upon leaving the EU, there will no longer be an obligation on EEA states to provide sui generis database rights (a national right that is comparable to but distinct from copyright and sits alongside copyright as an IP right protecting databases) to UK businesses. Further, UK owners of UK database rights may find their rights to be unenforceable in the EEA. UK businesses should consider relying on other forms of protection for their databases, such as restrictive licensing agreements, and any such existing agreements should be reviewed. 

Country-of-origin principle for copyright clearance in satellite broadcasting. Broadcasters who rely on the country-of-origin principle, which simplifies the clearance of rights for cross-border satellite broadcasting, will need to consider whether they need to seek approval to continue broadcasting from each of the member states in which they currently broadcast. They should also consider whether they need additional copyright permissions; such additional permissions should be negotiated in advance of the UK leaving the EU. 

Orphan works. UK cultural heritage institutions who continue to make orphan works available online once the UK leaves the EU may be infringing copyright laws. These institutions should consider whether they need to remove their works from their website or whether to limit access to content on a geographical location basis in the EEA. 

Collective management of copyright. Upon leaving the EU the UK Collective Management Organisations will not be able to mandate EEA Collective Management Organisations to provide multi-territorial licensing of their online rights in their musical works. Consequently, businesses who rely on this may wish to seek to continue their existing arrangements by entering into new contractual agreements with the EEA Collective Management Organisations. 

Cross-border transfer of accessible format copies of copyright works. Under this mechanism (the Marrakesh Treaty), the UK is currently able to transfer accessible format copies of copyright works between other EU member states and countries who have ratified the treaty. However, the UK does not intend to ratify the Marrakesh Treaty until after March 29, 2019. Consequently, until such time as the UK ratifies the Marrakesh Treaty the UK will not be able to rely on this mechanism. Businesses should therefore consider whether they need to seek the permission of the relevant right holder. 

Patents 

Supplementary Protection Certificate 

A supplementary protection certificate (“SPC”) provides for an additional period of protection after a patent has expired in respect of patented pharmaceutical products and agrochemicals. SPCs are granted on a national level although the legal framework underpinning SPCs applies across the EU. On leaving the EU, the UK will implement EU law under the Withdrawal Act, including the SPC system. Consequently, SPCs together with the UK’s existing supporting provisions will form the UK’s own SPC regime on exit and the regime will continue to work as it currently does. No action will be required from businesses in respect of SPCs and any pending applications will continue to be assessed on the same basis and new applications can continue to be filed. 

Unified Patent Court 

The UK is part of an international agreement attempting to set up a Unified Patent Court (“UPC”), which will have jurisdiction over European patent disputes and will be able to issue remedies that are binding across almost the entire EU. The launch of the UPC has been significantly delayed, but on April 26, 2018 the UK government ratified the UPC Agreement, which now only needs to be ratified by the German government – see our previous update. 

The impact of Brexit on the UPC partly depends on what stage of implementation it has reached, at the point of UK’s exit. If the UPC has been launched, the UK will need to consider whether it is possible to remain within the UPC system. Should the UK be required to withdraw from this system, UK patent owners will not be able to use the UPC or unified patent to protect their interests and instead will have to protect their interests in other ways, such as bringing a claim before the UK courts. Any UK businesses with existing unified patents at the date of exit, will be granted an equivalent UK protection. No action will be required from them to receive this right. If the UK remains part of the UPC, this will certainly give rise to a conflict with the UK government’s desire to make UK law supreme – see our previous update. Whilst not all EU member states are members of the UPC system, currently all members of the UPC system are EU member states. To make the UPC work with a non-EU member state may require significant changes to the UPC system, such as a change to the relationship between the UPC, EU law and the CJEU.

If the UPC does not come into force before the UK leaves the EU, there will be no changes to UK law at that time. However, the long term future of the UPC and the UK’s involvement in it, is certainly something that is, as yet, uncertain.