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What will the intellectual property landscape be like post-brexit?

April 19, 2016

Anne Hargreaves wonders how a "leave" vote in the upcoming EU referendum might affect the international IP framework.

 

In the referendum on 23 June British voters will make a choice that will resonate for a generation – whether to remain a member of the European Union or to leave (“Brexit”).  Under the provisions of the Lisbon Treaty, treaties cease to apply once a withdrawal agreement has been negotiated between the UK and EU, or otherwise after a period of two years, unless extended.  A decision to leave would have wide-ranging effects, in particular on cross-border activities.  What are the effects on IP likely to be?

 

The protection of intellectual property takes place mainly in an international environment, and the intellectual property context in the UK is currently framed by a number of different elements, which would be affected in varying degrees.

 

Those rights granted in the UK by the UK Intellectual Property Office (UKIPO), whether patents, trade marks or design rights, would remain valid, and obtaining protection for future rights would be unchanged.

 

International treaties governing copyright (Berne, UCC – Universal Convention on Copyright) are independent of the EU, as are the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) and World Intellectual Property Organization (WIPO), and there would be no change in these provisions.

 

The European Patent Organisation is also independent of the EU and has member states that are not members of the European Union (for example Switzerland, Norway).  In the event of Brexit it would still be possible to obtain a UK patent under the European Patent Convention (EPC) system.  British European patent attorneys would still be able to represent their clients in proceedings at the European Patent Office (EPO).  New arrangements would be needed for Supplementary Protection Certificates, which are governed by the EU and allow an extension to the term of patent protection for pharmaceutical patents in certain circumstances.  New arrangements would also be needed to deal with the exhaustion of rights and parallel trading, which relate to international trade in patented items and concern the point at which patent rights are treated as extinguished.

 

The situation as regards trade marks differs from the position for patents.  Currently the Community Trade Mark (CTM) system administered by the Office for Harmonisation in the Internal Market (OHIM, soon to be the European Union Intellectual Property Office – EUIPO) is a unitary system that takes effect throughout the EU.  After a Brexit, the CTM would be unlikely to still have legal effect in the UK.  A procedure for conversion to a UK trade mark would need to be agreed, and the same would apply for Community Registered Designs, geographical indications and designations of origin (e.g. Jersey Royal potatoes, Melton Mowbray pork pies).  The costs of conversion would have to be met.  After conversion the rights holders would need to deal with separate renewals for their EU and UK rights.  For future rights protection in the UK, rights holders would have to make separate applications for the UK and for the EU, incurring increased costs.  Possibly English would cease to be a working language of OHIM on the departure of the largest English-speaking state.

 

The Unitary Patent and Unified Patent Court are in the process of establishment by the EPO in order to provide a simplified overarching filing environment for 25 of the member states of the European Union that have joined the scheme. The Unitary Patent is only open to EU member states.  As one of the three countries in which the greatest number of European patents are validated, together with France and Germany, the UK is due to ratify the Unitary Patent agreement.  In the event of a vote to leave, the UK will no longer be a party and will be replaced by the next-ranking country, probably the Netherlands.  It is likely that Brexit would delay the implementation of the EU Unitary Patent.  As regards the Unified Patent Court (UPC), this is intended to make enforcement cheaper, easier and more uniform, removing the need for separate proceedings in each member state, and is expected to reduce the costs of enforcement in the UK to the level prevailing elsewhere in Europe.  These advantages would be lost on leaving the EU.  One of the divisions of the Court is set to have its seat in London.  Its future would be uncertain in the event of Brexit.

 

Some commentators have raised concerns as to the effect of a Brexit on the case law of the Court of Justice of the European Union (CJEU) in the UK.  Past decisions of the CJEU are at present incorporated into the IP landscape Europe-wide, the concept of originality itself depending on CJEU decisions.  The concern is that if EU and UK decisions begin to diverge, this will introduce legal uncertainty in the patent field.

 

 

References and further reading

 

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