European Union: The Brexit White Paper, Intellectual Property And Food & Drink

On 12 July 2018 the UK Government published its long-awaited White Paper on "The Future Relationship between the United Kingdom and the European Union", which, according to the foreword from the new Secretary of State for Exiting the EU Dominic Raab, is "a vision that respects the result of the referendum and delivers a principled and practical Brexit."

The paper is intended as a blueprint for further negotiations with Brussels and runs to more than 100 pages. While any final deal will almost certainly be different to the content of the White Paper, it at least identifies the minimum degree of continued harmonisation with the EU that could now be expected from any deal. The White Paper puts forward proposals on some key issues in relation to IP rights, including those of particular importance to the food and drink sector. See our earlier papers on Brexit and IP, and Food & Drink for more on the issues to which Brexit gives rise.

The future of IP and the EU Unified Patent Court

It is probably fair to say that intellectual property (IP) has not been at the top of the Brexit agenda, despite its significant importance for the UK economy (and indeed any other developed economy). The White Paper recognises that IP rights "play an essential part in encouraging the universal benefits of innovation and creativity, as well as protecting the reputation of products and services and helping prevent consumers from being misled about the quality or provenance of goods."

It can be costly to enforce patents in multiple jurisdictions, which is why the EU Member States (except for Spain and Poland) have signed an agreement on a Unified Patent Court (UPC). The UPC is designed to provide a streamlined process for enforcing patents on a pan-EU basis through a single court that will eventually have exclusive competence in respect of European patents and the EU's new unitary patent. The UPC Agreement was signed by 25 EU Member States (including the UK) on 19 February 2013, and remains open only for EU Member States to sign. The UK ratified it in April 2018. Only Germany's ratification is now required to allow the UPC to come into force.

The UK Government's intention, according to the White Paper, is to "explore staying in the Court and unitary patent system" after Brexit. More detail will have to be produced on how the UK Government would propose to remain part of the (so far) exclusively-EU UPC. Nonetheless, it seems the political will is there (at least on the UK side) to ensure the UK stays part of what is hoped to be a much improved, less expensive and more streamlined EU-wide patent system.

The paper also notes that "arrangements on future cooperation on IP would provide important protections for right holders, giving them a confident and secure basis from which to operate in and between the UK and the EU". It does not provide any more detail on what these new arrangements might involve, though the draft withdrawal agreement did previously offer some limited comfort in relation to the continued protection of some IP rights including EU trade marks (EUTMs) and registered Community designs (RCDs).

The importance of Geographical Indications for the food and drink industry

Geographical Indications (GIs) play a significant role in the field of IP in giving specific protections to some agri-food and drink products. The White Paper states that "GIs recognise the heritage and provenance of products which have a strong traditional or cultural connection to a particular place". Well-known examples are Champagne, Cognac and Parma Ham, or for more Scottish tastes, Scotch Whisky, Arbroath Smokies, Stornaway Black Pudding and Orkney Lamb. GIs are increasingly important to the Scottish and UK food and drink industry, as they offer brand protection and serve as proof of high quality. This enables producers to command a premium price, and protects consumers from being misled about the quality or origin of a product.

Under EU law, UK GIs can be enforced throughout the EU (as they can in other countries around the world where they have been recognised). GIs can be used to prevent others from emulating the protected product and taking advantage of the reputation for quality and assurance of provenance that a GI mark provides. A current example is the ongoing legal dispute between the Scotch Whisky industry and a German distillery in relation to selling German whisky under the Scottish-sounding designation "Glen Buchenbach".

To be legally protected as a GI in the EU, the name of a food or drink product must first be registered as such under an EU Regulation. The Register is EU-wide. Once a GI is registered Member States are responsible for taking action against its unlawful use, and so the national courts deal with GI enforcement disputes (with references to the EU courts where necessary, as in the Glen Buchenbach case).

The White Paper's proposals on GIs

It is good news that the UK Government, in its White Paper, is now proposing to establish "its own GI scheme after exit, consistent with the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPS)." Indeed, the new scheme is even intended to "go beyond the requirements of TRIPS, and [...] provide a clear and simple set of rules on GIs, and continuous protection for UK GIs in the UK. The scheme will be open to new applications, from both UK and non-UK applicants, from the day it enters into force."

If the UK had no plans to set up its own national GI system and Register (including all pre-Brexit registrations) there would be no reciprocal recognition of these rights under TRIPS. That recognition is needed to ensure that UK GIs continue to be protected in the rest of the EU and globally. Such protection tends to be based on countries recognising each other's registered GIs on a reciprocal basis. A UK GI system and Register is therefore needed for UK GIs to be valid and enforceable in the UK and elsewhere, and for EU and other GIs to be enforceable in the UK, post-Brexit.

Whilst the detail of these proposals remain to be confirmed, the statements in the White Paper should be somewhat reassuring for food and drink businesses in Scotland, the UK and across Europe. It remains to be seen whether current owners of GIs would need to reapply for a new UK-specific protection, but it seems more likely that it would be provided automatically for all GIs currently registered with the EU, without adding any extra administrative steps or cost.

Outlook

The White Paper states that the UK is "one of the best places in the world to protect and enforce IP rights." While any development in the Brexit negotiations is welcomed, the White Paper may raise more questions than it answers in relation to IP rights, the UPC, and GIs. It remains to be seen what Brussels makes out of the UK Government's proposals, but the Scottish food and drink industry, in particular, will want to follow developments in this area closely.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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