What would a no-deal Brexit mean for IP?

Written on 13 Nov 2018

The UK government has published a series of notices to guide companies on IP in the event of a no-deal Brexit. Companies with significant businesses in the UK or looking to expand into the UK, should consider filing UK trade mark applications now for new brands and marks currently only protected as EU trade marks. This is despite assurances that protection of EU trade marks will be maintained in the UK in the event of a no-deal Brexit.

The notices also confirm that Geographical Indications remain an important bargaining chip for the UK in its negotiations with the EU. The EU will of course want its GIs recognised in the UK, whilst the US has indicated that continued recognition of certain EU GIs would be a barrier to an effective UK-US trade deal for food products. The notice leaves that issue ‘up for grabs’.

Below is a summary of no-deal position on each IP right.

Trade marks and designs

The UK will provide holders of registered EU trade marks and registered Community designs will a new UK equivalent right that will come into force at the point of the UK’s exit from the EU. Disappointingly, the notice stops short of saying that this will happen automatically and for free, simply stating that the new rights will be provided “with minimal administrative burden”. In respect of trade marks and registered designs filed through the Madrid and Hague Systems, the notice simply states that the UK is working with the World Intellectual Property Organisation to provide continued protection in the UK.

The UK will give applicants of pending EU trade marks or Community designs a nine month priority period to apply for an equivalent UK right whilst retaining the same priority date as the EU right. These new applications will need to pay the usual office fees.

The notice confirms that all unregistered Community designs that exist as at Brexit will continue to be protected and enforceable in the UK, whether or not those designs were first disclosed in the UK or the EU. It also confirms that a new supplementary unregistered design right will be created under UK law to mirror the current Community unregistered design right. However, after Brexit it will only be designs that are first disclosed in the UK that will be protected by this new UK supplementary unregistered design right.

In respect of ongoing legal disputes, the notice simply states that provisions will be made and more information will be provided before Brexit.

Exhaustion of rights

The UK government confirms that it will initially continue to observe the EEA exhaustion of rights regime for a “temporary period”. This means that goods put on the market in the EEA with the brand owner’s consent can continue to be imported into the UK without breaching trade mark rights (or indeed any other IP right).

However, in a no-deal scenario there is no reciprocity by the EU on exhaustion of rights. As such, goods which have been first put on the market in the UK with the brand owner’s consent cannot necessarily be imported from the UK into the EU without breaching trade mark rights. Indeed, such a ‘UK to EU’ import is likely to amount to trade mark infringement in the EU country of import if done without consent.

Patents

The UK will form its own Supplementary Protection Certificate (SPC) regime on exit day, based on existing EU law.

It is still unknown whether the UK will be able to participate in the Unitary Patent and the Unified Patent Court (UPC) after Brexit.

The notice considers the possibility that the UPC does not come into force at all, in which case, there are no steps to be taken on exit day.

If Germany ratifies the UPC Agreement and the UPC comes into force before exit day (which must be doubted in the event of no withdrawal agreement and no transition period), the UK will explore whether it can stay part of the regime.

If the UK cannot participate in the UPC, the UPC would have no jurisdiction to hear actions for infringement occurring in the UK and those would need to be heard by the UK courts. The notice states that any existing unitary patents that had been granted prior to exit day would continue to be protected in the UK through a new equivalent UK patent right. That equivalent UK right would need to be enforced in the UK courts. Again, the likelihood of unitary patents being granted prior to exit day must be doubted.

Copyright and database rights

The UK’s continued membership of the main international treaties on copyright will ensure that the scope of protection granted: (a) in the UK to copyright works created and/or owned by all foreign nationals and companies; and (b) in the EU to copyright works created and/or owned by UK nationals and companies, will remain largely unchanged.

The notice is silent as to whether the UK will continue to provide database right protection to EEA nationals, residents and businesses, but points out that EEA states will no longer be obliged to provide database right protection to UK nationals, residents and businesses.

Geographical Indications

The notice confirms that the UK will set up its own GI scheme in the event of a no-deal Brexit. It also states that the 86 UK GI producers currently protected under the EU scheme will automatically be given new UK GI status and that these will confer protections similar to those currently provided. However, the notice points out that the UK would no longer be required to recognise EU GIs and that EU producers would need to apply under the new scheme.

The notice sets out that it is the UK’s expectation that all current UK GIs will continue to be protected under the EU scheme but provides some advice on how else to protect such GIs if this turns out not to be the case.