How Brexit may impact the TMT sector and IP in particular
November 2017 | SPECIAL REPORT: PREPARING FOR BREXIT
Financier Worldwide Magazine
November 2017 Issue
The Brexit vote of June 2016 seems a long time ago. Brexit has not actually happened yet, of course, but we are probably safe to assume that at some point it will, although the form and extent remains uncertain. Whatever the final deal and whenever it may be reached, we have to be ready. What effects will this separation have, other than the obvious and hopefully short-term issues of more expensive and more difficult travel to visit our European partners? Potentially, the consequences of Brexit for the TMT sector and IP in particular will be significant.
A great deal of modern IP law has been driven by the European courts, and while it remains to be seen how the great repeal bill will work in practice, or at all, there is, nevertheless, quite a bit of fallout that will not be covered by simple Acts of Parliament. While the bill narrowly scraped through parliament, there is ample opportunity for amendment and even defeat, but the transfer of EU law into UK law is only a tiny part of the process.
In the current system, UK trademarks are protected under EU trademarks, and this will remain the case until the UK actually leaves. However, upon leaving, the UK will need to adopt a different system, for which options are currently being explored.
It is noteworthy that in a practical sense the system for protecting trademarks may not change all that much for two primary reasons. The first is that, once the UK has left the EU, UK businesses will still be able to register an EU trademark, which will cover the remaining EU states. Second, the UK will still have access to the Madrid System, which effectively allows businesses to file one application to protect trademarks that will be applicable in 113 territories (including the EU).
European patent law
The UK’s patent law is largely governed by the European Patent Convention. Despite the name, this is a non-EU governance system, and therefore Brexit is not likely to have any material effect on it. However it is noteworthy that, while the UK will still be a part of the European Patent Convention, it will lose access to supplementary protection certificates for certain products. Furthermore, European patent law has been developing for decades and the Unified Patent Court (UPC), which was close to materialisation, could now be some way off, and the UK (with or without Scotland) may not now take part in the UPC.
It might be the case that the UK’s inventors, entrepreneurs and tech experts are not left high and dry by Brexit, but ultimately if they are left without protection for even a short amount of time, this could cause them significant harm.
The primary protections offered in relation to UK copyrights are the result of a number of international treaties and agreements which will not be affected by Brexit. However, there are a number of EU directives with which the UK complies in relation to copyrights. For example, EU competition law affects how things such as films and other digital content are licensed and used throughout the EU, and there will almost certainly be changes here.
Trade secrets and data protection
The UK does comply with EU Directive 2013/0402 which regulates trade secrets. However, Brexit is not likely to affect UK law in this regard, as the UK itself exceeds the requirements of that directive. In relation to data protection, the UK uses a mix of national and EU laws, and a particular area to watch will be the movement of data across borders. However, the UK has its own cyber security strategy and longstanding data protection laws, so it is unlikely that UK citizens will see a major shift in these areas.
Registered community designs are a major component of current design protections in the UK. The current position is that when the UK leaves the EU, UK businesses will still be able to register a community design which will cover EU Member States; however, the terms of this registration are not currently clear. There are also international agreements, such as the Hague Agreement, which should provide a solution to UK businesses on an international scale, and which will not be affected by Brexit. Furthermore, the current position is that unregistered design rights will continue to exist in the UK, but options are still being considered.
Disputes and enforcement
IP disputes are, by their nature, typically complex, lengthy and difficult to resolve. Further, the biggest effect of Brexit on patents and IP disputes is likely to be the delays that are almost inevitable in the formation of new or alternative laws with which to bring IP disputes. While a UK exit from the EU is not likely to have any effect on law firms representing clients in their dealing with the European Patent Office (EPO), the effects of an exit from the EU (and the uncertainty until that actually happens) are bound to have an effect on other IP disputes that are currently fomenting.
The UK is one of the world leaders in IP enforcement and, for the time being, it is likely that the UK’s enforcement framework will remain unchanged. However, once Brexit is put into effect, this will likely be an area which is subject to change, simply because so much IP law will still be regulated within the EU. Whether or not the UK retains its place as a leader in this regard remains to be seen.
The EU’s position
Early last month the EU published its views on IP in a document entitled ‘Position paper transmitted to EU27 on intellectual property rights (including geographical indications)’.
The paper was produced for the purposes of discussions and the negotiations under Article 50 of the European Union. The paper notes that the withdrawal of the UK from the EU will create uncertainty for UK and EU27 stakeholders citing three areas: (i) the scope of protection in the UK of certain intellectual property rights; (ii) the treatment of applications for certain rights; and (iii) the exhaustion of rights conferred by intellectual property rights.
It goes on to conclude that this uncertainty will have a significant effect on the conditions under which goods that are placed on the market in the EU before the withdrawal date could continue to circulate between the EU27 and the UK.
The paper sets out five guiding principles all aimed principally at maintaining as much of the status quo as possible. The five headings are: (i) intellectual property rights having unitary character within the Union; (ii) applications for intellectual property rights having unitary character within the Union; (iii) applications for supplementary protection certificates or for an extension of their duration; (iv) legal protection of databases; and (v) exhaustion of rights.
Tony Sykes is a partner at IT Group. He can be contacted on +44 (0)845 226 0331 or by email: email@example.com.
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