BREXIT & INTELLECTUAL PROPERTY – THE KEY POINTS

A view by Palmer Biggs IP, Solicitors

BREXIT IP THE KEY POINTS 002
Current position
  • Article 50 triggered on 29 March 2017, setting a cut-off date of 29 March 2019 for the UK to leave the EU.
  • Snap election on 8 June 2017 failed to strengthen the UK government’s mandate and instead resulted in a hung Parliament (with no party having an absolute majority), leading to suggestions that a “soft” Brexit, where the UK remains in the single market or the accepts the free movement of people, is now more of a possibility than a “hard” Brexit with no agreement.
  • Negotiations between the UK Government and the EU commenced on schedule on 19 June 2017.
  • Queen’s Speech to Parliament on 21 June 2017 includes Great Repeal Bill which will repeal the European Communities Act 1972 and convert existing EU law applicable to the UK into domestic law on the day that the UK leaves the EU.
  • Nothing changes until the UK actually leaves the EU.
  • UK attorneys can still act before the EUIPO in all EUTM and RCD procedures.
  • EUTMs and RCDs still cover the UK.
  • UKTMs can be used to oppose or invalidate later EUTMs and vice versa.
  • EUTMs and RCDs can be enforced in the UK.
  • First disclosure of a design in UK creates an unregistered Community design (UCD) providing 3 years’ protection throughout the EU, regardless of whether the design is a 3D design or a 2D design.
  • UK courts can still grant pan-EU injunctions.
  • UK-based designers and entities can still file International (Hague Agreement) designs at WIPO by virtue of the UK being in the EU (the EU is a member of the Hague Agreement but the UK currently is not).
  • UK-based attorneys can act before WIPO in WIPO in Madrid Protocol and Hague Agreement (as well as PCT) procedures.
  • UK-based entities can still register .eu domain names.

Current Patent position

  • Currently, the UK is a member state of the European Patent Office, the Patent Co-operation Treaty, and the Unified Patent Court. 
  • The UK has not yet ratified the UPC agreement, but the UK has stated its intention to do so.
  • The UPC is not yet in force, and cannot come into force until it is ratified by the UK and by Germany.

When will the changes happen?

  • 29 March 2019 on current time frame. This may be extended if everyone agrees, although this is felt to be unlikely in the current climate.
  • If nothing is agreed by 29 March 2019 then the UK’s exit will take effect on default terms.

What are the likely changes?

  • EUTMs and RCDs will cease to have effect in UK after Brexit.
  • EUTMs and RCDs will no longer be a one-stop route to protection in the UK and the EU; it will be necessary to apply separately for UK protection and EU protection.
  • First disclosure of a design in the UK will no longer give rise to a UCD.
  • Transitional arrangements will allow existing EU registered rights to continue at UK national level, possibly through automatic extension or positive opt-in within a set period, but there is no clear idea yet of what might happen with pending applications.
  • It will no longer be possible to use earlier UKTMs (registered or unregistered) to oppose or invalidate later EUTMs or vice versa; you will need an earlier right effective in the territory concerned.
  • UK-based attorneys will no longer be able to act before the EUIPO unless the UK joins the EEA after Brexit or special dispensation is agreed.
  • UK-based designers and entities will not be able to file International (Hague Agreement) designs at WIPO and UK-based attorneys will no longer be able to act before WIPO in Hague Agreement procedures, unless or until the UK joins the Hague Agreement.
  • UK courts will no longer be able to grant pan-EU injunctions and pan-EU injunctions granted by non-UK courts will no longer apply in UK; separate enforcement proceedings will be necessary in the EU and the UK.
  • Separate customs enforcement actions will be necessary in UK and EU, especially if UK leaves the customs union.
  • UK-based entities will no longer be able to register or own .eu domain names if the relevant domain name registry insists that registrants must continue to have an EEA base after Brexit.
  • In terms of litigation, the judgments of UK courts may diverge increasingly from European Court decisions as they apply their own interpretation and can ignore CJEU decisions and it is also possible that the UK may adopt a different practice on exhaustion of rights once it is no longer bound by EU legislation.
  • The picture will be become clearer when the exit negotiations are complete.

What will NOT change (Soft IP)?

  • UK national trade mark and design rights will not be affected by Brexit, but, unless the law is changed, UK unregistered design right will continue to apply only to 3D designs.
  • UK-based entities will be able to apply for and own EUTMs and RCDs but they will have to use professional representatives based in the EU or EEA.
  • UK-based attorneys will still be able to act before WIPO in Madrid Protocol (as well as PCT) procedures but an EU representative will have to be appointed if there is a refusal from the EUIPO as a designated office, as is already the case with refusals from other designated offices under the Madrid Protocol.
  • European patents will not be affected as they are not governed by EU legislation and UK-based European patent attorneys will still be able to act before the EPO.

What about changes in relation to patents?

  • Strictly speaking, in relation to patent laws and procedures, nothing is going to be changed by Brexit.
  • The EPO is not an EU institution so the UK leaving the EU will have no effect. The UK will still be full members of the EPO, just like Switzerland and Norway
  • The same applies to the PCT – we will still be members along with many non-EU states.
  • The UPC is not yet in place, and since Article 50 was triggered, its status has become more uncertain. Delay to the UPC is expected.
  • The UPC will have to be one of the matters that is discussed in the negotiations. At the moment, it apparently cannot come into force, because only EU states can be members and the agreement requires the involvement of the UK, France, Germany and Luxemburg. If the UK is not an EU state then the system breaks down.
  • As such, Germany is unlikely to ratify the UPC until the Brexit negotiations are complete, even if the UK does.
  • Further, there has been a pause in Germany’s ratification of the UPC. In April this year the German Constitutional Court asked the German President not to sign off on the implementing legislation for the Unitary Patent Package. This is rather unusual, and will delay Germany’s ratification until the Court decides a constitutional complaint about the UPC; the decision is expected to take about 6 to 12 months, taking us much closer to the Brexit date. Nevertheless the Chair of the UPC Preparatory Committee remains optimistic that the UPC will be ratified in due course.
  • The UPC also requires oversight by the Court of Justice of the European Union, meaning that there would still be a small area of law in which the CJEU had authority over the UK. This is a major sticking point for UK policy so the UPC may need a thorough re-think.

What needs to be considered in the run up to Brexit?

  • Consider the filing of a UK national trade mark or design application at the same time as new EUTMs or RCDs to reduce uncertainties over the status of pending EU applications after Brexit and also over enforcement in the UK and the scope of licences.
  • Review existing EU licence agreements to see if they will make sense after Brexit and will cover the right territories: do they define the EU in terms which will cover the transitioning UK rights after Brexit or do they need to be renegotiated?
  • Consider registration of a .uk (or .com) domain name equivalent to your .eu domain (even though you qualify as an .eu registrant at the moment) in case the requirement for .eu registrants to be based in the EEA is maintained after Brexit.
  • Trade mark use – EUTMs and UKTMs become susceptible to cancellation for non-use once they have been registered for 5 years so, if your EUTM is already in this position or will be by March 2019, make sure that it is used in the UK if it is only used elsewhere in the EU at the moment, or vice versa, to reduce the risk of the transitioning UK rights or the remaining EUTM being at risk of a non-use attack after Brexit.
  • Seniority claims – if any of your EUTMs have seniority claims from UK registrations which are still in force make sure that those UK registrations are kept in force over the Brexit period to reduce the risk of potential loss of seniority for transitioning UK rights.
  • Act now if you are considering an invalidity attack against an EUTM based on a UKTM because, after Brexit, the UKTM will only be effective against the transitioning UK rights from the EUTM. This will be dependent also on an agreement being reached to allow EUTM proceedings begun before Brexit to run to a conclusion after Brexit.
  • In relation to patents: preparation for Brexit is going to be more a question of preparing for the possible introduction of the UPC; consider validating European patents in all EU states so that the patent can have unitary effect; and if existing cases are in force across the whole EU then consider keeping them in force rather than allowing any individual countries to lapse.

It goes without saying that there is a lot of speculation at the moment and the scope and impact of the impending changes will only become known after Brexit.