Intellectual Property Law Blog

What Does the Brexit Vote Mean for IP Protection?

July 7th, 2016

What-Does-the-Brexit-Vote-Mean-for-IP-ProtectionBy Martin G. Belisario and Bridget H. Labutta

As is well known by now, the citizens of Great Britain have chosen to leave the European Union (EU), a move popularly dubbed the “Brexit.” Despite the economic upheaval and media firestorm surrounding the vote, the realm of intellectual property law is unlikely to see any immediate consequences from the Brexit.

Under Article 50 of the Treaty on European Union, the British government must provide notification to the European Council of its intention to leave, which initiates a round of negotiations concerning a withdrawal agreement. The period in which to reach agreement is two years, but this is extendable indefinitely if the United Kingdom (UK) and the Council agrees. The British government projects the negotiations could extend up to 10 years, while others more realistically place the timeframe closer to four years.

In either timeframe, there will be no significant change to intellectual property law until the formal exit is ratified by all necessary parties. When the exit is formalized, the changes to IP law will depend most directly on whether the UK becomes a member of the European Economic Area or EEA, an agreement for non-EU countries to participate in free trade with the EU. Since many EU laws apply to the EEA, the impact on IP will be less dramatic if the UK adopts this relationship.

Patents

The form of IP least likely to see any major changes is patents. The process of obtaining patent rights at the European Patent Office (EPO) will not be changed, nor will enforcing a European patent in the UK. Further, filing international applications at the UK Receiving Office will remain unaffected. This is due to the fact that Britain’s membership in the PCT system and the European Patent Convention (which governs the EPO) is completely independent of its membership with the EU.

One possible side effect of Brexit, however, is the delay or possible termination of the Unitary Patent (UP) system and the Unified Patent Court (UPC). The agreement, pending ratification of member states, requires a country to be a member of the EU in order to participate. However, under the agreement, the UK must be one of the signatory states, which is impossible if it leaves the EU. The Brexit will at least delay the UP system until the agreement is renegotiated, a prospect likely to consume years. Even if the UK were to become signatory to the EEA, EEA member states are not as yet participants in the UP system.

Trademarks

As of the formalization of the British departure from the EU, new trademarks registered through the European Intellectual Property Office (EUIPO) will no longer enjoy the benefit of protection in the UK. To obtain UK protection, new trademark registrations must be filed directly with the UK Intellectual Property Office. With respect to existing registrations with the EUIPO, referred to as EUTM registrations, the prospect is less certain; but it is reasonable to expect that the EUTM registrations will cease to apply in the UK. When this occurs, it is also anticipated that trademark owners will be allowed to convert the UK portion of their EUTM registration into a UK national registration with corresponding priority. However, until Parliament passes domestic legislation to this effect, it is unclear how this conversion process would work or how much the associated fees would be.

Additionally, depending on the UK’s future relationship with the EEA, the Trade Marks Directive may cease to apply. If Britain joins the EEA, the Trade Marks Directive will still apply, and UK legislation and judicial interpretation of those laws will stay in harmony with the rest of the EU. However, if EEA membership does not occur, Parliament will no longer be constrained by EU laws with regard to trademarks. While UK law would not be expected to deviate greatly from EU law, in light of many international agreements; over time the gap may widen and lead to unforeseen issue with enforcement and registration in the distant future.

In light of the pending changes, it is recommended that those filing for trademarks in Europe and Britain begin budgeting for the future. Specifically, resources should be set aside for national UK registrations going forward in addition to EUTM registrations; additionally, resources should be budgeted for converting old EUTM registrations into national stage UK applications down the road. In addition to these resources, if national stage registrations are to be sought for future marks, steps should be taken to use the mark in the UK if it is not already being marketed there to allow the UK registrations.

Copyright

The arena of copyright law has the potential for radical changes, but these are unlikely to materialize. The EEA, which the UK may join, is subject to many of the EU directives concerning copyrights, for example the InfoSoc Directive 2001/29/EC and Directive 2006/115/EC on rental and lending rights. Even if the UK does not join the EEA, changes are unlikely to occur for two reasons. First, as part of its past compliance with EU directives, the UK already has incorporated many of the EU copyright directives into its own domestic law. Second, similar to trademarks, Britain is the signatory of many other international agreements which will keep its domestic law in harmony with Europe and the rest of the world.

Designs

The EU has a comprehensive system to provide protection to both registered and unregistered designs called the Community Designs Regulation. While registered EU and UK designs will remain in the status quo (except that they apply only in their respective jurisdictions), unregistered design owners may find a need to shift strategy and protection scheme. The EU system protects “the appearance…resulting from…the lines, contours, colours, shape, texture or materials of the product or its ornamentation.” In contrast, the UK system protects the “shape or configuration…of the whole or part.” While complementary, the laws are targeted to different aspects of a design without completely overlapping. Since the design laws do not apply to the EEA, Britain will be forced to reevaluate its domestic design laws in the wake of the Brexit, regardless of whether it joins the EEA.

Entities that traditionally have relied on unregistered design rights for protection are strongly encouraged to consider filing registrations to preserve their rights, especially if the design has been disclosed and there is limited time to prevent a loss of rights.

Trade Secrets

The law of trade secrets is unlikely to see much upheaval as a result of the Brexit, whether EEA membership occurs or not. National domestic law in the UK already is compliant with the minimum standards of the new EU directive which takes effect on July 5, 2016. As such, owners of trade secrets in Europe and in Britain are unlikely to see many, if any, changes.

The withdrawal of Great Britain from the European Union or Brexit promises to bring forth a wave of legal changes across all spheres, especially with regard to intellectual property. For example, past licensing agreements may have generically referred to “Europe” for geographic scope, but, in the future, should be rewritten to account for the distinction between the EU and the UK.

When the formal exit from the EU does take place, it will certainly modify the prospects of international intellectual property protection for decades to come. If you have questions about how the new European landscape may impact your IP portfolio strategy, contact an intellectual property attorney at Panitch Schwarze Belisario & Nadel at 888-291-5676.

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