It has been almost two months since the UK officially left the EU on Friday, 31 January 2020, yet it remains in a period of transition. For intellectual property professionals, rights holders and applicants alike, this has represented a time of uncertainty as they seek clarity around important questions concerning process and regulation.
The UK's relationship with the EU is currently governed by the Withdrawal Agreement, which provides for a stand-still period in relation to the application of EU law in the UK. Changes to the current regime are due to take effect from 31 December 2020. What these changes will be will depend on the terms of any agreement(s) reached (or not reached) between the UK and the EU addressing their legal relationship from 31 December 2020. In a document released at the end of February, the UK Government stated it is seeking an agreement that "secures mutual assurances to provide high standards of protection for IP rights, including registered IP rights such as patents, trademarks or designs."
So what does this currently mean in practice for intellectual property? Well, for now, not a lot, but here are five key things to be aware of in the areas of patents, trademarks and designs as we wait for the Brexit dust to finally settle:
- Patents: No change to European patents granted for the UK
The European patent system is governed by the European Patent Convention and is entirely independent of the EU. It has always had non-EU members such as Switzerland, Norway and Turkey, and there is no current reason why the UK could not continue to be a part of this regime post-Brexit.
The UK patent system comprises the national system (applications made to the UK IPO) and the European system (applications made to the EPO). As both systems largely fall outside the remit of EU law, and questions of infringement and validity of each national designation are a matter for the courts of each relevant country, the impact of Brexit for the existing patent systems is likely to be minimal.
However, the European patent system is developing with the introduction of the Unified Patent Court (UPC). While the previous UK government had expressed their intention to remain invested in the UPC project, the current administration confirmed that the UK "will not agree to any obligations for our laws to be aligned with the EU's, or for the EU's institutions, including the Court of Justice, to have any jurisdiction in the UK." It therefore seems highly unlikely that the UK would become part of the UPC system upon its entry into force.
- Trademarks: EU trademarks (EUTMs) will retain protection
Companies concerned about having to re-register EUTMs in the UK in the event of a no-deal Brexit need not worry. All EUTMs registered as at 31 December 2020 will automatically be protected as "cloned" UK trademarks without any loss of priority, filing or seniority dates at no additional cost. The new UK TM rights will have a prefix to indicate that it is cloned and will require its own separate renewal.
For EUTM applications that are still pending at the end of the transition period, proprietors will have nine months to file a UK application for the same trademark or design maintaining the benefit of the same filing, priority and seniority date.
- Trademarks: UK rights and "earlier rights"
Where oppositions or proceedings against EU trademark applications or registrations are based on prior UK rights, the proceedings will automatically be dismissed once the transition period ends. UK rights will cease to be "earlier rights". We have already seen some adversarial proceedings based on UK rights stayed by the EUIPO. UK rights holders should be reviewing their involvement in any EU trademark proceedings with their attorneys in order to determine whether they will be affected and to identify alternative options at their disposal.
- Designs: UK rights remain protected
Similarly, existing EU design rights will be automatically "cloned" into UK national rights to ensure that no rights simply cease to exist.
EU registered design rights in place before Brexit day will become "Re-registered Design" rights, and will act as if it was a UK registered design.
EU's unregistered design rights will become "Continuing Unregistered Community Designs" to give protection in the UK. It will be possible to obtain the same protection following Brexit by way of the newly formed "Supplementary Unregistered Design" right.
- Exhaustion of rights
At present, the UK operates within a regional exhaustion system in the European Economic Area (EEA). Post transition period should the UK be moving to national exhaustion or international exhaustion? While IP owners would undoubtedly like to see their national markets protected, others believe that an international exhaustion system would see greater competition and a reduction in prices for consumers.
It is a controversial issue and it is no surprise that the Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2019 provides that the current system of EEA exhaustion will continue as far as possible. This means that at the end of the transition period, rights in goods put on the market in the EEA will be exhausted in the UK. However, it is unclear whether the EU will take the same approach. If it does not, putting goods on the market in the UK would not exhaust IP rights in the EEA. This means that UK rights owners would not be able to prevent parallel imports from the EEA but owners of rights in the EEA would be able to prevent UK exports from the UK into the EEA. Importers from the UK into the EEA would therefore need to consider whether they require specific permissions from rights holders. It remains to be seen how this issue will be approached in the trade negotiations.
Given the UK's current hard Brexit stance in relation to the negotiation of a future trade agreement with the EU, in which there appears to be no role for the CJEU and no dynamic legislative alignment, it is likely that the future may see divergence between UK and EU patent, trademark and design jurisprudence. Where exactly they will diverge is yet to be seen. It is also possible that the timetable for Brexit will change in light of the impact of COVID-19.
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.