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What does Brexit mean for Intellectual Property?

If you are reading this article, you are likely to remember where you were on Friday, 24 June 2016; waking up to learn that 51.9% of the voting population (17,410,742 votes) voted to leave the EU. The UK is governed by many EU regulations and directives so breaking away from the EU is not going to be straightforward and it is certain that an exit will have an impact.

As the UK enters into negotiations with the rest of the EU, there is a lot of uncertainty and debate about what sort of economical and structural impact it will have on the country. For example, will the UK retain its membership of the EEA or join as a member of another economic area with suitable trade terms and reciprocal rights?

From an intellectual property law perspective, since Britain is a member of the EU, nationals enjoy harmonised rights across all member states of the EU. This includes both registered and unregistered rights, rights relating to infringement, enforcement and control over the movement of goods. Different disciplines of law within the intellectual property framework are likely to be affected in different ways.

For example:
Trade marks and designs

If the UK is removed from the list of member states that currently enjoys registered and unregistered trade mark and design protection under EU regulations, new owners will not be able to file a single application to cover all 28 member states including the UK. Instead two applications would need to be filed if protection is required in the UK as well as the rest of the EU. For brand owners, this will increase the cost of acquiring registered trade mark and design protection in the UK and EU.

In relation to existing rights, EU trade marks and designs registered before a certain date may still have effect in the UK. It seems unlikely the right will be lost. However, this remains to be seen. If current/historic rights remain, only new applications would need to be filed in the UK separately from the EU. If however, the UK portion of the EU trade mark or EU design is taken away, this will have a huge impact on rights holders as it would leave them without protection in the UK. As a result, new trade mark and/or design applications would need to be applied for in the UK. Anticipating that UK rights may be taken away, one option EU trade mark owners have now, while the UK is still part of the EU and all rights are intact, is to invoke the mechanism under the current EU trade mark regulations which would allow an owner to 'carve' out the UK portion of the registration and turn that right into a national right. This way, rights are not lost.


Exhausting of Intellectual Property Rights

The current system allows a rights owner to object to goods being sold in the EEA if they have not consented to the introduction of such goods inside the EU/EEA. Once consent is given, owners cannot prevent the same goods entering into the market as the rights are said to have been ‘exhausted’.

If UK was no longer a member of the EU/EEA, UK trade mark owners may be able to prevent goods entering into the UK from the EEA on the basis that the rights have not yet been exhausted in the UK. It will be interesting to see how this operates in real terms when goods are moved, without a trade border, from Ireland (member of the EU) to Northern Ireland (not a member of the EU).

Patents
Unfortunately, the UK is likely to be precluded from the Unitary patent system which provides patent protection across all EU member states, including the UK, using a single application system.

This could impact the value of patent rights and potentially leave owners and other rights-holders without protection in the UK. It may be necessary for inventors to take steps to obtain national protection in addition to EU protection, if necessary.

Copyright
Potentially good news. Since copyright in the UK is governed by national law and international conventions, there is likely to be little effect to this area of intellectual property law.

Confidentially/Know-how
The same applies to the law of confidence and trade secrets, which is governed by national law but subject to UK courts being bound by decisions from EU courts (see below).

Litigation and Enforcement

The High Court in the UK may no longer be a European Community court for intellectual property disputes. That being the case, UK Courts will no longer be a venue for IP disputes concerning European IP rights. IP owners would need to bring their claims in another EU member state.

In relation to venue and jurisdiction, unless agreed between UK and EU, the Brussels Regulation which deals with the court's jurisdiction to hear claims, enforcement and reciprocity of judgments across the EU may no longer have effect. This could see a potential reduction in litigation in the UK unless UK relies on, signs or joins another convention.

Decisions from EU courts

Will decisions from EU courts be binding on UK courts? UK case law could start diverting away from the decisions of the EU courts (including the Court of Justice of the European Union) as they would no longer be binding on the UK Courts. However, for the short term they are likely to be persuasive.

 

If you have any concerns or questions please contact Riyaz Jariwalla or one of our specialist team of solicitors.

 

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice