How Brexit will affect intellectual property
The potential exit of the United Kingdom from the European Union, following the referendum on June 23, 2016, could have a very considerable effect on intellectual property matters which fall within a highly unified area.
Although the effects of the UK’s decision to leave the EU will foreseeably take two years to be in place and will depend on the negotiations with Brussels, we are able to forecast the following issues:
- European Union trademarks
The European Union trademark (EUTM) is a unitary intellectual property right, which confers, from when it is granted, a single right with protection in all 28 Member States. The EUTM cannot be divided for individual countries because it is a unitary right.
The UK leaving the EU would mean that new applicants for trademark rights seeking protection in both the UK and in the EU will, in principle, have to register the mark twice in two separate offices (the UK office and the EUIPO).
For the current holders of European Union trademarks, their rights could cease to be valid in the UK if it leaves the Union, because it would cease to be party to Regulation 207/2009. It remains to be seen, however, whether the UK implements any domestic legislation to determine whether there will be any special treatment for any granted European Union trademarks currently in force. Whether, for example, they will automatically become national trademarks and retain the priority date on the EUTM register, or whether, conversely, the trademark must be registered anew or any specific formalities will be needed.
Additionally, difficulties could arise such as being able to prove effective and genuine use of the European Union trademark to prevent it from being revoked, or evidencing use in cases of opposition involving the trademarks of third parties. For example, the use of the EU trademark only in the UK after Brexit may not be considered an effective and genuine use.
Another issue that will have to be examined because of its important economic repercussions is the exhaustion of the trademark right which currently occurs in relation to the European Economic Area.
The answers to these types of questions will have to be provided by the legislature and by the European Courts.
- Community designs
The protection of industrial designs conferred by (registered and unregistered) Community designs is governed by very similar rules to those on European Union trademarks, in that it confers a single right with protection in all the Member States.
Therefore, for the time being, Brexit will have the same implications on Community designs as it has on European Union trademarks.
- European Patents
In principle, the UK will continue appearing as a signatory of the European Patent Convention, and therefore, unless its belonging to the Convention is reconsidered (which in principle bears no relation to whether it is in the European Union), the applicants for European patents who wish to validate the patent for it to be valid in the UK may continue to do so.
Remember that, unlike European Union trademarks and Community designs, the European patent does not grant a single patent right valid in every country that has acceded to the European Patent Convention. It involves a uniform application and for the patent to be granted and benefit from protection in the Contracting States, the holder must validate the protection in the countries they choose from among all the Contracting States, which involves fees, formalities, etc. in every country. Therefore, there is not a unitary right but a collection of national registries.
- Unitary patent and a unified court
Over recent years, work has been put into engendering (not without arduous negotiations or even appeals to the CJEU brought by Spain) the unitary patent and the Unified Patent Court (UPC), for the purpose of creating a unitary patent right valid throughout the Union (similarly to the European Union trademark or the registered Community design). This system was expected to come into force in 2017.
Brexit could have a head-on impact on the creation of this right and on the creation of the UPC. A case in point is that the UPC Agreement had to be ratified by a number of countries, including the UK.
In principle, the UK may be expected to be left outside the Regulation and the Agreement. The section of the UPC that was going to be placed in London might run the risk to being received by another city. There is still a chance, however, that the UK will ratify the UPC Agreement while it is still a Member State, and in fact, some voices in the UK are exploring this option.
- Supplementary protection certificates
Furthermore, the supplementary protection certificates (intellectual property certificates extending the term of pharmaceutical patents in certain cases), by being governed by a European regulation, would cease to be valid in the UK until new national rules were adopted (which might be based on the European rules, or not).
In theory, if the UK leaving the Union did not imply it leaving the European Economic Area, UK citizens could opt into the European rules like countries such as Norway or Iceland have done.
In copyright matters, the harmonizing intervention of the Court of Justice of the European Union has been key in recent years to interpreting uniformly a varied range of issues such as databases, links, communication to the public or limits on rights, to mention just a few examples.
Brexit will very probably imply the UK not being bound by the CJEU’s decisions and therefore there are risks that certain concepts will be interpreted differently on both sides of the Channel.
- Digital single market
The UK leaving the EU may delay and bring complications to implementation of the proposed measures and have the same effect on the course of the Digital Agenda for Europe and the achievement of the 2020 goals. The goals of increasing interoperability and standards, and moving towards the cross-border provision of digital products and services in the European Union would not have the UK in their reach. The UK might seek different solutions and go down different paths regarding issues like e-commerce, data protection or such complex issues as geo-blocking.
For the time being, the decision to leave the Union alone has caused a great amount of instability. The negotiation process and the measures or agreements that will be adopted in relation to intellectual property matters must be followed carefully to see what the country’s new status will be in relation to Europe and be able to design the best strategy.
Garrigues and the Intellectual Property Department are strongly committed to keeping track of any new developments in relation to Brexit and its impact on intellectual property rights so as to offer the best strategy to our clients at home and elsewhere, including our Latin American clients, with interests in the area.
Garrigues Intellectual Property Department