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Intellectual property and a no-deal Brexit – significant change or more of the same?

January 2019  |  SPECIAL REPORT: INTELLECTUAL PROPERTY

Financier Worldwide Magazine

January 2019 Issue


Brexit, at the time of writing at least, stands as the great unknown. Will there or won’t there be a deal on the terms of the UK’s withdrawal from the EU? What will the terms of any such deal be? These questions are currently unanswerable, but we are starting to get more of a picture of what may happen in the event of a no-deal Brexit.

In particular, the UK government has recently issued important guidance on how it proposes to deal with intellectual property (IP) rights in the event of a no-deal Brexit. We focus here on the proposals for how copyright protection, patents, trade marks and designs would work after a no-deal exit.

Copyright

UK copyright law was well-established prior to the UK joining the EU, therefore the fundamentals of what is protected will not change under the current proposals. This is also due to the UK being a signatory to various international conventions on copyright protection.

Even the geographical scope for copyright protection is not really going to change, again due to the international conventions the UK is a party to. Works which are subject to UK copyright protection will actually continue to be protected in the EU and across a large number of other jurisdictions, even if no deal is struck.

There will, however, be some changes in respect of specific direct reciprocal arrangements between the UK and the remaining EU Member States, such as mutual recognition of orphan works, portability of online content services, collective rights management and database rights. These changes are going to be implemented by the Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2018, which has only recently been introduced.

We will not explore the specifics of all these changes, and in truth most of them have limited applicability to most businesses, however database rights potentially apply to most businesses, whether they know it or not.

In brief, database rights provide the owner of a database the right to restrict the use of the information contained within that database. Database rights which exist within the UK at the time the UK leaves the EU, whether held by UK or EU based individuals or businesses, will continue to be enforceable in the UK. Going forward after Brexit, only UK citizens, residents and businesses will be eligible for new database rights in the UK. As it stands, UK citizens, residents and businesses will no longer be eligible to hold or receive database rights in the EU.

Finally, the duration of copyright protection within the UK will largely remain the same. Technically, EU copyright protected works will now be subject to the same rules as other non-EU copyright protected works (rather than the preferential rules which currently apply). Therefore, after a no-deal Brexit, EU protected works will be protected for the lesser of the duration of UK protection or the duration of protection for the country of origin. However, as the durations of protection have been harmonised between the UK and the EU, and the UK position is not changing as a result of Brexit, this will make no difference for the time being.

Patents

The vast majority of patent law within the UK pre-dates the UK’s membership of the EU, and therefore the UK’s exit will not change much of the substantive law. Also, the UK’s membership of the European Patent Convention and the Patent Co-operation Treaty is separate to its membership of the EU, and therefore both of these systems will remain open to UK individuals and business even if the UK leaves the EU without a deal.

There are certain areas where EU law has built on the existing UK system, but where this is the case the UK government proposes to adopt those provisions into UK law to maintain a system essentially identical to the current one.

Trade marks

The current proposal for trade marks is that all existing registered EU trade marks (at the time the UK leaves the EU) will continue to be protected in the UK by way of an equivalent UK right being created. These new UK rights will be created with minimal administrative burden and, although not expressly stated in the guidance, it is expected there will be no, or very limited, additional costs.

In respect of any applications for EU trade marks which are ongoing at the point the UK leaves the EU, the proprietors of such applications will be entitled to refile for UK protection within nine months of the date the UK leaves the EU. This will, however, be a ‘new’ application and as such will be subject to the usual fees for a UK application. Provided an application is made within the nine-month post-exit period, the UK right will be treated as if it had been applied for on the date the EU application was made (which limits the risk that subsequently registered rights could be used to prevent registration of the new UK right).

After the UK leaves the EU, UK-based companies will be able to file for both UK and EU trade marks. However, to gain the same geographical coverage, businesses will have to obtain marks in both areas, which will mean greater fees than are currently payable.

There is also no guidance on what will happen regarding ongoing contentious issues in relation to EU trade marks, such as oppositions or cancellation proceedings.

Therefore, with a view to the potential additional costs in applying for trade mark protection in the EU and the UK in the future, it is advisable to be applying for any EU trade marks as soon as possible. However, we are fast approaching the point at which it will no longer be possible to complete an application for an EU trade mark prior to the current exit date (29 March 2019), and certainly any applications which are opposed are highly unlikely to now be completed prior to the current exit date. There is also a strong argument, given the uncertainty surrounding any ongoing contentious matters as at the exit date, that filing for both a UK and EU trade mark is advisable.

Designs

As you would expect, Brexit will have no impact on existing UK registered and unregistered designs and design rights. For registered community designs that exist at the time the UK leaves the EU, the position is the same as with an EU trade mark, in that an equivalent right will be created with a minimum of administrative burden. Likewise, any organisations or individuals who have pending applications for registered community designs when the UK leaves the EU will have the right within nine months to apply in the UK for the same protection and with the same priority date; there will, however, be fees payable for doing so.

For unregistered community designs that exist at the time the UK leaves the EU, the proposal is that such rights will remain protected and enforceable in the UK for the unexpired period of protection.

As what is covered by an unregistered community design and unregistered UK design right are actually different, as is the period of protection, the UK government is also proposing to create a right which mimics the current unregistered community design right within the UK for designs which are created after the UK exits the EU. This new right is due to be called a supplementary unregistered design right.

There is, as covered above in relation to trade marks, no guidance on what will happen in relation to any contentious matters for community registered designs which are ongoing at the exit date.

The hope obviously remains that a deal will be struck which resolves the issues regarding IP rights, their recognition, enforceability and protection after Brexit. However, the proposals for a no-deal scenario, taken as a whole, will largely maintain the status quo. It will, however, be the case if there is no deal that future trade marks and registered designs will be more costly for the same geographical coverage, due to having to apply separately for UK and EU coverage.

 

James Howarth is a partner and Stephen Ruse is a solicitor at Howes Percival LLP. Mr Howarth can be contacted on +44 (0)1908 872 207 or by email: james.howarth@howespercival.com. Mr Ruse can be contacted on +44 (0)1604 258 064 or by email: stephen.ruse@howespercival.com.

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