Brexit and IP: impact of a no deal exit

Here are the key points to note on each of the notices:

Trade Marks and Designs

• Registered trade marks and designs: The notice on trade marks and designs indicates that, even in the event of a no-deal Brexit, the government intends to ensure continued protection for unitary rights (EU trade marks and community designs) by creating equivalent protection under UK law that will arise automatically without any involvement or action from the rights holder. However, where applications for unitary registered rights are pending at Brexit, the government has now said that, in the event of a no-deal Brexit, applicants will have to re-file any pending EU applications, within nine months of Brexit day, as applications for UK equivalent rights. Going forward clients may therefore want to factor UK applications into existing filing strategies and consider filing UK applications now in parallel with EUTM and Community registered design applications, or as a separate designation within a Madrid or Hague application. For more detail read our blog on trade mark and design protection planning for Brexit here.
• Correspondence addresses for registered trade marks and designs: currently when a right holder applies for a UK trade mark or design at the UK Intellectual Property Office, they must provide an address for service in the EEA. The UK government has said there will be “no immediate changes” to this regime and the current rules will remain in place after Brexit, at least, it is implied, in the short term. This suggests an EEA address for service which is not in the UK will still suffice post-Brexit.
• Unregistered designs: The government has said that it will ensure that all existing unregistered Community designs will continue to be protected and enforceable in the UK post-Brexit, for the remaining period of the protection of the right. In addition, the UK will create a new “supplemental” UK unregistered design right, equivalent to the unregistered Community design, which will apply to all designs disclosed after Brexit. The government has also said that the current UK unregistered design right will continue to exist post Brexit meaning a design first disclosed in the UK could be protected by both the supplemental unregistered design right for a period of three years and the UK unregistered design right, for a period of up to fifteen years (each for different and overlapping aspects of the design). The UK government has given no further indication of how this overlapping regime will be implemented in practice but it has said that “the UK will amend legislation to ensure that it functions effectively” post Brexit.

Geographical Indications (GIs)

The UK does not, at present, have any domestic legislation to deal with GIs and these are recognised in the UK only as a matter of EU law. Protection of EU GIs in the UK and UK GIs in the EU will therefore be lost in the event of a no-deal Brexit. The UK’s notice on GIs however provides confirmation for the first time that the UK proposes to set up its own GI scheme post-Brexit, to broadly mirror the current EU regime. If EU producers want their product indicators to be recognised in the UK post-Brexit they will need to apply for UK GI status (with the exception of Irish Whiskey, Irish Cream and Irish poteen which will continue to be fully protected in the UK as they can be produced anywhere in Ireland – North or South). On the other hand, the UK government has said that it is still anticipating that UK GIs will continue to be protected by the EU post Brexit (whether or not there is a no-deal Brexit). If UK GIs do not continue to be recognised by the EU, businesses wishing to have their products protected by the current EU legislation can still apply to the EU to regain protection as a “third country” or alternatively apply for EU Collective Marks or EU Certification Marks see our related blog.

Whether we leave the EU with or without a deal on the Withdrawal Agreement, the UK government has said it will introduce a new UK logo for GI products to replace the current EU logo and producers of GI products wishing to use the new logo will need to make preparations to comply with the new rules (to be determined after consultation) around use of this logo.

Patents

• Supplementary Protection Certificates (SPCs): EU law provides an additional period of protection after a patent has run out for patented pharmaceutical products and agrochemicals, in order to compensate for regulatory delays to market entry and subsequent patent exploitation (known as a supplementary protection certificate or “SPC”). The government proposes that the existing EU law on SPCs will be retained in UK law post-Brexit, however, in the event of a no-deal Brexit, this law will form the UK’s own SPC regime post-Brexit, operating independently from the EU regime. Any existing rights and licences in force in the UK will remain in force automatically with no action required from right-holders to preserve that protection in the UK. Going forward, post-Brexit, the new UK regime will apply, but the legal requirements and application processes are intended to stay the same. In our view this should be a smooth exercise, however there are questions around the detail. For example, will a first marketing authorisation in an EEA state remain the basis for obtaining and calculating the duration of a UK SPC? Hogan Lovells partner Stephen Bennett commented to Managing IP this week that “this issue of where first marketing authorisation takes place is worth millions to pharma companies and it is not clear what the UK is going to do about it”.
• Unitary Patent and Unified Patents Court: the government states that, if the Unified Patent Court is ratified and comes into force (which is not yet certain), the UK government “will explore whether it would be possible to remain with the Unified Patent Court and unitary patent systems, in a no-deal scenario”. This language is slightly more conservative than the language used in the government White Paper published earlier this year, which may indicate the UK is uncertain about its position on remaining within the UPC (if it comes into force).

Exhaustion

The UK is currently part of the EEA exhaustion of rights scheme. This means that once goods have been sold (with the rights-holders consent) anywhere in the EEA the rights-holder cannot prevent those goods from being resold anywhere within the EEA. A first sale in any third country does not result in any exhaustion of rights. If there is a no-deal Brexit, the government says that the UK will continue to recognise the EEA exhaustion of rights scheme for an (undefined) period post-Brexit. There will therefore be no immediate change to the rules on importing goods into the UK. However, without a deal with the EU, the EU may restrict the importation of goods from the UK into the EEA from Brexit day. In our view, whilst there is temporary certainty (for the first time) that there will be one-way exhaustion between the UK and the EEA from Brexit day, what is not clear is what will happen in relation to the UK’s relationship with the rest of the world.

The notice is silent on the rules that will apply in relation to non-EEA countries. If the UK leaves the EU without a deal the UK may revert to an ‘international exhaustion’ regime which applied prior to the UK joining the EU. Under the old regime, a first sale in a third country could result in exhaustion of rights worldwide and a right-holder would not be able to prevent parallel imports of genuine goods into the UK or the EEA or elsewhere. Right-holders will be concerned about the risk of cheap genuine goods coming into the UK. That scheme would also not work side by side with the government’s proposed one-way EEA exhaustion scheme, where the EEA can restrict importation of goods into the EEA unless the right-holder has consented. The government says it is currently considering all options for how the exhaustion regime should work after this temporary period and is undertaking a research programme to support the decision. We think an important aspect of that will be working out what should happen where first sale takes place in a third country.

Copyright

The UK’s copyright laws will not change post-Brexit, whether there is a deal or not. UK copyright law is largely derived from a number of EU directives which have been implemented in the UK and will form part of the body of law which the UK has decided to retain on Brexit. However, without a deal, the UK will lose the benefit of any cross-border measures or rules which have been constructed for the benefit of copyright holders and users within the internal market. For example, regimes which simplify rights clearance within the EU or which allow mutual use of protected works, such as the ‘orphan works’ regime. The government’s notice on copyright and a no deal Brexit sets out which cross-border mechanisms will be affected. To read more about the impact of Brexit on copyright read our earlier blog here.

Authored by Stephen Bennett and Sahira Khwaja 

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