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No-deal Brexit: UK intellectual property 

Background

In July 2018, the government published a white paper on the future UK-EU relationship setting out the government’s vision of the economic partnership and security partnership following Brexit, which included intellectual property (IP) considerations.

In conjunction with the white paper, the government also announced that it would be publishing a series of what it called “technical notices”. According to the government, these technical notices aim to provide guidance and information for UK businesses and citizens on how to prepare for a no-deal scenario, where the UK and EU fail to conclude a draft withdrawal agreement by the time of the UK’s exit from the EU. This no-deal scenario would mean no transition period, and a sudden “cliff-edge” break in the application of EU rules to the UK at 11.00 pm on 29 March 2019.

Facts

The government has published several notices relating to IP. The technical notices address:

  • Geographical indications (GI).
  • Exhaustion of IP rights.
  • Trademarks and designs.

The notices state that a no-deal scenario remains unlikely given the mutual interests of the UK and the EU in securing a negotiated outcome. They also state that negotiations are progressing well, and it is simply the UK’s duty to prepare for all eventualities.

The notices are summarised below.

Geographical indications (GI)

There are two issues for UK producers of GI products to consider:

 

  • The use of a new UK logo on products marketed in the UK.
  • The preparation of an application for GI status in the EU, or other steps that producers may wish to take to protect product integrity.

A new UK logo

The government expects to introduce a new UK logo for GI products to replace the EU logo, whether or not the UK leaves the EU with a withdrawal agreement. Producers of GI products wishing to use this logo will need to make preparations to comply with the new rules around use of the logo within a time period to be specified. This process is said to be subject to consultation. When a new UK GI logo is finalised, the government states that it plans to promote this with stakeholders and the wider public.

EU protection of UK GIs

After the UK leaves the EU, the government anticipates that all current UK GIs will continue to be protected by the EU’s GI schemes. If this is not the case, UK producers wishing to regain the protection offered by EU GI status, and the right to use the EU GI logo, would need to submit their applications to the European Commission as “third country” producers. The application process would be similar to that used by EU countries, with the additional need to show that the GI was protected in the UK. The government would provide support and guidance for this process.

Alternatively, or in addition, producers might consider protecting their products by applying for EU collective marks or EU certification marks.

International protection of UK GIs

The government states that it is working with its global trading partners to replicate EU free trade agreements and other sectoral agreements, including accommodating the protection of UK GIs in third countries. After March 2019, irrespective of the outcome of EU negotiations, the government states that it expects UK GIs currently named in and protected by EU free trade agreements and other sectoral agreements will continue to be protected.

Copyright

EU cross-border copyright mechanisms extend only to EU or EEA member states. On exit, the UK will be treated by the EU and EEA as a third country and the reciprocal element of these mechanisms will cease to apply to the UK.

Implications

The implications of a no-deal scenario for the various mechanisms is summarised as follows:

  • Sui generis database rights. There will be no obligation for EEA states to provide database rights to UK nationals, residents or businesses. UK owners of UK database rights may find that their rights are unenforceable in the EEA.
  • Portability of online content service. The Portability Regulation ((EU) 2017/1128) will cease to apply to UK nationals when they travel to the EU. This means online content service providers will not be required or able to offer cross-border access to UK consumers under the Portability Regulation. UK consumers may see restrictions to their online content services when they temporarily visit the EU.
  • Country-of-origin principle for copyright clearance in satellite broadcasting. UK-based satellite broadcasters that currently rely on the country-of-origin copyright clearance rule when broadcasting into the EEA may need to clear copyright in each member state to which they broadcast.
  • Orphan works copyright exception. UK-based cultural heritage institutions that make works available online in the EEA under the exception may be infringing copyright.
  • Collective management of copyright. UK collective management organisations will not be able to mandate similar EEA organisations to provide multi-territorial licensing of the online rights in their musical works.
  • Cross-border transfer of accessible format copies of copyright works. The UK intends to ratify the Marrakesh Treaty after exit but ratification will not have taken place before 29 March 2019. Between exit and the point of ratification, businesses, organisations or individuals transferring accessible format copies between the EU and UK may not be able to rely on the EU Regulation ((EU) 2017/1563).

Actions

Businesses and other interested parties may wish to seek legal advice on how the arrangements could affect their business model or IP rights. For example:

  • Sui generis database rights. UK owners may want to consider relying on other forms of protection (for example, restrictive licensing agreements or copyright where applicable) for their databases.
  • Country-of-origin principle for copyright clearance in satellite broadcasting. As well as clearing copyright in each member state to which they broadcast, UK-based satellite broadcasters may want to consider whether they need to seek additional copyright permissions.
  • Orphan works copyright exception. Institutions that currently use the exception may want to consider whether they need to remove works from their websites or limit access to content on a geographical location basis in the EEA.
  • Collective management of copyright. UK collective management organisations that currently rely on this right may want to consider seeking to continue existing arrangements with similar EEA organisations via new contractual arrangements.
  • Cross-border transfer of accessible format copies of copyright works. Businesses, organisations or individuals transferring accessible format copies between the EU and UK may want to consider whether they need to seek the permission of the relevant right-holders or cease the cross-border transfer of accessible copies.

Exhaustion of IP rights

In a no-deal scenario, the UK will continue to recognise the EEA regional exhaustion regime from exit day.

However, while there will be no change for the importation of goods into the UK, there may be restrictions on the parallel import of goods from the UK to the EEA. Businesses undertaking such activities may need to check with EU right-holders to see if permission is needed.

The government states that it is currently considering all options for how the exhaustion regime should operate after what it describes as a temporary period, and that it is undertaking a research programme to support its eventual decision on which option to take.

Patents

The key aspects of the patents technical notice address supplementary protection certificates (SPCs) and the unitary patent (UP) and Unified Patent Court (UPC). These aspects are summarised below.

SPCs

The EU’s legislation on SPCs will be kept in UK law and this legislation, along with the existing supporting provisions in UK patents legislation, will form the UK’s own SPC regime on exit.

UP and UPC

The government states that the UK will explore whether it would be possible to remain within the UPC and UP systems in a no-deal scenario.

If the UPC comes into force and the UK needs to withdraw from both it and the UP, both UK and EU businesses will no longer be able to use the UPC and UP to protect their inventions within the UK. The government states that provision will be made regarding the status of any pending cases before the UPC at exit.

Trademarks and designs

The notice addresses registered trademarks and designs, and unregistered Community designs. The key aspects are summarised below.

Registered trademarks and designs

If there is no deal, the government states that it will ensure that the property rights in all existing registered EU trademarks and registered Community designs will continue to be protected and to be enforceable in the UK by providing an equivalent trade mark or design registered in the UK. Businesses, organisations or individuals that have applications for an EU trade mark or Community design which are ongoing at the point of the UK’s exit from the EU will have a period of nine months from the date of exit to apply in the UK for the same protections, retaining the date of the EU application for priority purposes.

The government states that it will work, including with the World Intellectual Property Organisation, to provide continued protection in the UK after March 2019 of trademarks and designs filed through the Madrid and Hague systems and which designate the EU.

The government states further that right-holders with an existing EU trade mark or registered Community design will have a new UK equivalent right granted that will come into force at the point of the UK’s exit from the EU. It adds that the new UK right will be provided with minimal administrative burden.

Further, after exit, entities with EU trade mark and Community design applications which are ongoing at the date of exit will be able to refile with the Intellectual Property Office (IPO) under the same terms for a UK equivalent right, using the normal application process for registered trademarks and registered designs in the UK.

The government highlights certain additional implications of a no-deal scenario as follows:

  • Right-holders will be notified that a new UK right has been granted; any entity that may not want to receive a new comparable UK registered trade mark or design will be able to opt out.
  • Provision will be made regarding the status of legal disputes involving EU trademarks or registered Community designs which are ongoing before the UK courts and more information will be provided on this before the point at which the UK exits the EU.
  • Applicants with pending applications for an EU trade mark or a registered Community design will not be notified and after exit will need to consider whether they refile with the IPO to get protection in the UK.

Finally, the requirement for applicants to supply an address for service in the EEA (but not necessarily in the UK) will remain unchanged.

Unregistered Community designs

The government states that it will ensure that all unregistered Community designs which exist at the point that the UK leaves the EU will continue to be protected and enforceable in the UK for the remaining period of protection of the right; these will also continue to be valid in the EU. Additionally, the UK will create a new UK unregistered design right which mirrors the characteristics of the unregistered Community design. This means that designs which are disclosed after the UK exits the EU will also be protected automatically in the UK under the current terms of the unregistered Community design. This new right will be known as the supplementary unregistered design right.

Further, the government states that the UK will amend legislation to ensure that the UK unregistered design right regime functions effectively once the UK is no longer part of the EU system for designs.

The government goes on to state that the protection of existing unregistered Community designs in the UK will be provided for with no action required by the right-holder. Provision will also be made regarding the status of legal disputes involving unregistered Community designs which are ongoing before UK courts.

Comment

The continuing uncertainty in relation to the direction of travel of the Brexit negotiations on the UK’s future trading relationship with the EU together with the recently heightened prospect of a no-deal scenario suggests that businesses trading in the UK are more likely to have their concerns increased rather than assuaged by the content of these technical notices given the timeframe of a “cliff-edge” Brexit in March 2019. Much of the government’s thinking remains inchoate and businesses and consumers alike are unlikely to be thrilled by the government’s advice that in relation to copyright, for example, they should seek legal advice on the consequences of withdrawal without a deal.

One area that may surprise is the UPC and the UK’s future role within it. Following ratification of the UPC Agreement by the UK, some commentators were fairly confident that the UK would remain within the system once it went online. That prognosis has now been thrown into considerable doubt by the implication in the patents notice that withdrawal from the system (should the UK enter it) remains a significant possibility.

On the new registered trade mark and design rights, although the government states that these will provided with minimal administrative burden, the impact on the IPO at least is likely to be immense.

Practical Law PLC 2.10.18