Brexit - Intellectual property

Publication December 2016

On June 23, 2016 the UK voted to leave the EU. The exit will not happen immediately. It is likely to take a maximum of two years following service by the UK of a notice under Article 50 of the Treaty on the EU to triggering the exit process.

Therefore, for the time being it is business as usual. There is no loss of Intellectual Property (IP) protection in the UK. In any event many IP rights are national rights and so will be unaffected. EU-wide rights such as EU Trade Marks and Community Designs will also remain unaffected until the UK formally leaves the EU. Furthermore, transitional provisions are likely to be put in place to handle the carve-out of UK rights from their EU counterparts.

For the longer term, there are IP considerations that ought to be borne in mind now that the UK has decided to leave the EU. We cannot foresee what the result of the UK/EU negotiations will be, but the main IP consequences are likely to be as follows:

Patents

The current system of national patent protection obtained through the UK Intellectual Property Office (UKIPO) or the European Patent Office (this is not an EU institution) remains unchanged.

However, an overhaul of the patent regime in the EU was due to come into force enabling proprietors of inventions to apply for a single, pan-EU Unitary Patent (UP) covering most of the EU, and with a single Unified Patent Court (UPC) to hear and determine patent disputes on a pan-EU basis. The future of the Unified Patent Court (UPC) system had been in doubt following the UK’s vote to exit the EU as it had been created within the EU framework. However, the government announced on November 28 that it will ratify the Unified Patent Court Agreement which means that the system can now be implemented. It is possible that the Unified Patent Court (UPC) system will start as early as Q2-Q3 next year but the reality may be later.

The government has been quick to clarify that its decision has no bearing on its negotiation stance as it prepares to exit the EU: the UK’s eligibility to remain in the UPC system after Brexit remains unclear. Thus, although ratification most certainly means that the UPC system will survive (with or without the UK), it does not remove the uncertainty over the scope of granted unitary patents and any pending litigation in the UPC following the UK’s withdrawal from the EU.

Businesses are urged to review their patent protection and future enforcement strategies, bearing in mind that the UPC is now becoming a reality, albeit with a question mark over what it will look like after Brexit. Theoretically UK's continued involvement is possible but current thinking is that this would involve UK submitting to the jurisdiction of the CJEU, which will be a challenge in the current political climate.

Trade Marks

The national trade mark system whereby UK trade marks are obtained via the UKIPO is unchanged.

After Brexit, EU trade marks are likely no longer to cover the UK. Proprietors of existing EU trade marks will be likely to be able to rely on transitional provisions (terms or procedures for which are yet to be determined) which should enable proprietors to obtain separate UK coverage based on the EU trade mark right.

Going forward, if the UK is an important marketplace, it is advised that applicants seek separate UK trade mark protection in addition to filing the EU or designating the EU within a Madrid Protocol application. This would bring certainty and the assurance that rights are readily enforceable in the UK should the need arise.

Designs

The national system of UK Registered Designs obtained through the UKIPO and the UK unregistered design right is unchanged.

After Brexit, Community registered design rights will likely no longer cover the UK. Again, similarly to the trade mark position, proprietors of existing Community registered designs will likely be able to rely on transitional provisions (terms or procedures for which are yet to be determined) which should enable proprietors to obtain separate UK coverage based on existing Community registered design right. Again, going forward, if the UK is an important market, it is advised that applicants seek separate UK registered design protection in addition to filing a Community registered design right.

Copyright

Although copyright law per se is not harmonised, the rules governing the way in which copyright protected works can be exploited in certain contexts are governed by EU law (such as the Software Directive and the Information Society Directive), and these EU laws have been implemented into UK legislation. However, there have been calls to harmonise copyright laws. This has led to the EU commission’s initiative to create a “Digital Single Market” to generate growth in the online and telecoms market. If the UK opts to remain outside the EU’s ‘Digital Single Market’, then UK businesses would not need to provide for cross-border commerce and/or access to content.

Trade Secrets

Unlike much of the EU the UK already has strong trade secret protection.

However, the level of protection of trade secrets currently varies between EU member states. The EU Trade Secrets Directive (Directive (EU) 2016/943) has come into force (5 July 2016), which to some extent addresses this issue by setting a minimum level of protection. The EU member states will have 2 years to implement it into national law. The idea is to raise the level of protection in those member states where is it lacking.

Given Brexit, the UK may not implement this Directive. But as said, the UK has a robust common law of confidentiality, and so a proprietor’s right in the UK will continue in most cases to be stronger than in most member states of the EU.


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