Preliminary Assessment of the Impact of Brexit on UK Intellectual Property Rights

Overview
 
On 23 June 2016, the United Kingdom (UK) held a referendum on its continued membership of the European Union (EU). The surprising result was a decision to leave, or “Brexit”. The result has no immediate legal effect. Indeed the two year formal process of exiting the EU has not yet begun. It is unclear what the legal nature of Brexit will be, or how long it will take. In the midst of this uncertainty, but with the assumption that it will eventually happen, this article briefly reviews the possible impacts of Brexit on UK intellectual property (IP) rights.
 
Patents
 
The European patent system will be unaffected by Brexit, because it is based on the European Patent Convention (EPC) rather than EU law. You will still be able to file patents through the European Patent Office (EPO) and, when a European Patent grants, to validate it in chosen EPC member states.
 
But there are many areas where Brexit will still have an impact on UK patents. A key area is in respect of the proposed EU-wide Unitary Patent (UP) and the Unified Patent Court (UPC), a centralised EU patent litigation forum. Recently the UK government indicated an intention to proceed with ratification of the UP and UPC. In the current UK political climate the decision came as a surprise to many pundits, this one included. UK ratification makes it much more likely that the UP and UPC will come into effect in the EU. But, oddly, after Brexit the UK may need to withdraw unless some pretty material fudges are made to the rules.
 
Another key area will be in respect of EU Supplementary Protection Certificates (SPCs). They provide a term extension to medicinal or plant protection patents. SPCs will not apply to the UK after Brexit. However, given their commercial importance, the presumption is that SPCs (in some form) will continue to apply in the UK, possibly by the creation of a UK SPC that is harmonised with, or gives reciprocal rights to, EU SPCs.
 
Trademarks
 
Trademarks can be protected in the UK by filing a UK trade mark or a European Union Trademark (EUTM). The EUTM is effective across the EU. Following Brexit it is expected that new EUTMs will not apply to the UK. It is anticipated, given the considerable commercial importance they have, that the UK will enact transitional provisions for the recognition of the UK portion of existing EUTMs or their conversion to UK registration. Whether such a conversion will be automatic or require positive steps, including payments, is not yet clear. It is also not known whether the owner of a EUTM will need to show that the mark has been used in the UK, or whether EUTMs currently only used in the UK may become vulnerable for cancellation for non-use in the EU.
 
Protected geographical indications (PGIs)
 
Specific EU legal protection is available for foodstuffs from particular regions, or having a specific character, in the form of protected designations of origin (PDOs), PGIs, and traditional specialities guaranteed (TSGs). Well-known examples include Prosciutto di Parma, Welsh lamb and Feta cheese. These unitary EU rights will not apply to the UK post-Brexit. Again, it is likely that transitional provisions will be enacted to recognise existing PDOs, PGIs and TSGs in the UK, or for their conversion into national rights. While it is unclear to what extent any such UK system would resemble the current EU system, or its value (due to the more limited geographic coverage), it is to be hoped that there would be sufficient similarity to allow for mutual recognition of the protected names in both the EU and UK.
 
Designs
 
We anticipate a similar situation with respect to Registered Community Designs (RCD) as with EUTMs, since an RCD is also an EU unitary right. UK registered designs (URD) will not be directly affected by the UK leaving the EU, nevertheless certain changes to the existing UK legislation seem likely. One such change concerns the novelty and the safeguard clause for disclosures that could not reasonably have become known in the normal course of business to persons carrying on business in the EEA and specialising in the sector concerned. This safeguard clause seems likely to be amended to at least include the UK, especially if there is a “hard Brexit” (i.e. the UK leaves the EU Single Market). Another likely change is that, post-Brexit, the UK may decide to remove the EU national and resident requirement from the scope of URD, unless there is reciprocal EU protection.
 
Copyright
 
There are various EU directives and regulations, including the InfoSoc Directive and the Software Directive, whose aim is to harmonise aspects of copyright law in the EU. Post-Brexit, the UK is likely to keep EU law already implemented in UK national law, or implement transitional provisions consistent with the EU copyright framework, even if it is a “hard Brexit”. This is especially likely where the EU rules reflect international copyright treaty obligations (such as the Berne Convention).
 
Database rights
 
Database rights in the UK arise from the EU Database Directive, in particular the “sui generis” database right. It is a right only available within the EEA and those countries providing reciprocal protection. Post-Brexit, the UK will likely retain its own national “sui generis” right, hopefully in such a manner as to ensure reciprocity with the EEA.
 
Trade secrets
 
Recently the EU adopted the Trade Secrets Directive. It lays down harmonised measures against the unlawful acquisition, use and disclosure of trade secrets in a manner quite similar to the English common law duty of confident (with the addition of “whistle-blower” protection). EU member states have two years to implement the Directive into national law. This applies to the UK too, unless Brexit occurs by May 2018, which seems unlikely. Post-Brexit, if the Directive is implemented in the UK, it is likely to be retained because of its commercial advantages (especially if there is reciprocity with the EU).
 
Conclusion
 
The impact of Brexit on UK IP rights remains uncertain, including which EU-based IP rights will survive and the degree of reciprocity in recognising IP rights between the UK and the EU-27. This makes planning difficult. It is also unclear how much say the UK government will allow the Court of Justice of the European Union on UK IP rights, something which appears necessary if the UK is to participate (inter alia) in the UPC and to benefit from any reciprocal IP rights.
 
It seems prudent, therefore, to assume that a “hard Brexit” will occur and to plan accordingly. While international IP frameworks binding the UK (such as TRIPs and the Berne Convention) should ensure a continued minimum level of IP harmonisation between the UK and the EU, a “hard Brexit” is likely to reduce the degree of reciprocity on IP rights. That being the case, it is prudent to consider filing UK registrations to protect EU unitary IP rights in the UK before “Brexit”. In particular, UK filings for EUTMs and RCDs.
 
Sean is the head of the legal department at Mewburn Ellis LLP. An experienced IP lawyer, he advises a wide range of clients on IP, technology transfer and the commercialisation of IP rights. He also works with IP disputes. Sean’s practice ranges across a number industry sectors, but in particular biotechnology, pharmaceuticals, mechanical & structural engineering and materials. Sean has a BSc and PhD in microbiology from Imperial College and the University of Cambridge respectively. He has worked in private practice at large international law firms, in IP boutiques, and in-house as a technology transfer professional. Sean is ranked for intellectual property law in Chambers & Partners, the Legal 500 and Managing IP.
 
Mewburn Ellis LLP is one of the largest IP firms in Europe offering the full range of IP service. They provide commercially focused, creative advice on obtaining, defending, enforcing and commercialisation IP rights including patents, trademarks and designs to a wide range of clients across numerous and diverse industry sectors. Renowned for the high quality of their work, Mewburn Ellis take a very personal approach to business, nurturing long-term relationships. They are committed to providing IP solutions that work – whatever the size or commercial goals of their clients.

Sean is the head of our legal services team and advises a wide range of clients on all types of IP law, technology transfer and the exploitation of IP, including:

• structuring IP deals to maximise their value or potential, and to manage risk
• advising on, drafting and negotiating a wide range of IP contracts relating to buying, selling, developing or commercialising IP
• conducting IP due diligence in connection with the sale or purchase of IP or for investments, IPOs, or M&A
• advising on IP entitlement issues and contractual freedom to operate
• advising on life science regulatory issues including data and marketing exclusivity, human tissue regulations and advanced therapy medicinal products
• advising on invention disclosure processes, IP policies and procedures, managing know how and trade secrets, IP clearance and analysis, and IP portfolio management

He also works with our dispute resolution team on the preparation of settlement agreements in concluding disputes both before and after litigation has started.

Sean has experience across a vast range of industry sectors. He has particular experience in the biotechnology, pharmaceutical, mechanical & structural engineering and the nanotech sectors.

Sean can be contacted on +44 (0) 117 945 1127 or by email at sean.jauss@mewburn.com