Countdown to Brexit – intellectual property

IP post-Brexit: What we know

The publication of the 19 March 2018 version of the ‘Draft Agreement on the withdrawal of the [UK] from the [EU]’ has led to more clarity about the status of various IP rights post-Brexit. Key points include:

  • all EU trade mark (EUTM) registrations, community plant variety rights (CPVR) and registered community designs (RCD) will automatically (i.e. without any re-examination or other vetting process) become “a comparable registered and enforceable [IP] right in the UK” at the end of the transitional period. (It has been agreed there will be a transitional period until at least 31 December 2020, but the date of the end of that period is yet to be settled.);
  • those with unregistered community designs will benefit from a corresponding UK right for the balance of the period of protection under the existing EU right;
  • the potential unfairness of a later priority date has been resolved by agreement that the new automatic UK rights will benefit from the same filing or priority date as the EU rights they originate from;
  • those with an application for an EUTM pending at the end of the transition period who file an application for a UK mark (it must be the same mark and in respect of identical goods and services) within the following nine months will benefit from the same filing and priority date as the equivalent EUTM; and
  • ‘comparable’ UK marks will not be liable to revocation for non-use in the UK before the end of the transitional period. However, UK prior rights will not be taken into account in decisions of the European Union Intellectual Property Office (EUIPO) or the EU courts on invalidity or revocation made after the end of the transition period.

It remains to be seen how the ‘comparable mark’ system will be administered but it is the EU’s position that all necessary steps should be taken by the UK with no charge being made to rights holders.

Presently UK law does not allow for arrangements in respect of indications of origin, geographical indications and traditional specialities. There is, as yet, no agreement on the position in this regard in the post-transition period.

In other welcome news, the impact of Brexit in relation to international protection of design rights has been reduced by the UK having joined the Hague Agreement for Industrial Designs. As part of the EU, the UK has indirect membership of, and benefits from, the Hague system. The UK has now independently joined the scheme, meaning even after Brexit, UK and EU businesses can use the Hague system to file a single application through WIPO (World Intellectual Property Organization). They can also obtain design protection in the EU and UK by selecting both territories in one application. Without this system, separate applications would have to be made.

First tasks for working groups include:

  • identify what IP you own or license in from third parties. Registered rights such as trade marks and patents will be easy to spot, but many businesses have significant value tied up in unregistered rights such as copyright, trade secrets and data. Preparing a comprehensive schedule of all rights will be vital. Many businesses rely on EU rights such as EU trade marks or Community Design Rights, and whilst these will be replicated in the UK post-Brexit, it is prudent to know what rights you have now to ensure this happens and that none of your rights fall through the net. Also bear in mind the new automatic UK rights referred to above will have the same renewal date as their originating EU rights. The Trade Secrets Directive has recently been adopted and EU member states are required to implement it by 2018 – it is currently unclear whether the UK will, or will be obliged to, comply with this requirement.
  • if your business is considering making an application for an EU trade mark or EU registered design in the coming months (i.e. before the end of the priority period) consider the benefits of making it without delay to take advantage of the nine-month period referred to above.
  • identify all contracts (‘licences’) under which you license IP into or out of your business, whether by way of goods, services, data, software, materials or otherwise. These contracts may take a variety of forms and titles, including: distribution agreements; reseller agreements; sponsorship/endorsement agreements; joint venture/collaboration agreements; franchise agreements; and know-how and technology transfer agreements. It may be necessary to review these contracts if they are adversely affected by Brexit. Examples might include definitions of ‘territory’ which refer to the EU or EEA, clauses which specify the payment of charges and taxes, or ‘force majeure’ and ‘change control’ provisions.
  • identify all licences which are in the process of being negotiated. Consider whether any provisions should be amended, included or deleted in response to Brexit. Likewise, re-evaluate any proposed business decisions such as investments or acquisitions. It may be advisable to expressly include or exclude Brexit from the definition of ‘force majeure’ and from the scope of the termination provisions.
  • prepare an internal and external communications strategy to keep your customers, suppliers, employees etc. apprised of the situation.
  • consider the impact on your business of the UK leaving the single market. If the UK remains within the EEA, there should be no change covering ‘grey goods’ and ‘parallel imports’. However, if the UK opts to trade internationally under WTO rules, ‘exhaustion of rights’ rules may allow businesses to prevent the importation of goods between the UK and EU.

If you would like to discuss any aspect of this article, please get in touch with Graeme Fearon, Megan Jefferies or your usual Thrings contact.

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