Brexit implications for IP: arrangements agreed so far

20 March 2018

The United Kingdom and the (remaining) EU have reached partial agreement on the text of a treaty that will govern the Brexit process. It provides broad clarity regarding arrangements for the transitioning of unitary EU rights in trade marks, designs and plant variety rights into UK rights.



Maintenance of the status quo for the transition period

The effect of the "Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community" is that:

  • Although the UK will exit the European Union on 29 March 2019, and from that date will no longer participate in European Union decision making processes, EU law will very largely remain applicable to and in force in the UK for the term of the "transition period", which will end on 31 December 2020.
     
  • The UK will remain within the EU's intellectual property regimes until the end of the transition period: in this respect, for IP, there will be no change from the status quo until 31 December 2020.

The Draft Agreement also sets out, as between the EU and the UK, the arrangements in respect of unitary EU intellectual property rights at the expiry of the transition period.

Arrangements for EU-wide IP rights

With the end of the transition period, owners of EU trade marks, registered EU ('Community') designs, and EU ('Community') plant variety rights will, pursuant to UK law, become the owner of an equivalent national right covering the UK without any re-examination.

Thereafter, the first renewal date in the UK in respect of the UK daughter trade mark or registered design right will be that of the corresponding parent EU trade mark or registered Community design.

A UK daughter trade mark will enjoy the date of filing or priority (or, where appropriate, UK seniority) of its EU trade mark parent. Owners of applications for EU trade marks pending at the end of the transition period will have nine months in which to file a UK application for the same trade mark, in respect of identical goods and services, with the benefit of the same filing date and priority date (and where appropriate, seniority) as the equivalent EU application.

A UK daughter trade mark will not be liable to revocation on the ground that the corresponding EU trade mark had not been put into genuine use in the UK before the end of the transition period. The owner of an EU trade mark with a 'reputation' in the EU at the end of the transition period will be entitled to rely on that reputation in the UK, but thereafter the reputation of the UK daughter trade mark will be based on use in the UK.

There is no agreement for the EU to recognise, following the expiry of the transition period, genuine use or reputation of an EU trade mark which is founded on such use in the UK.

The term of protection of a UK daughter plant variety right will be at least equal to the remaining period of protection conferred by the parent Community plant variety right, and it will benefit from the same date of filing or date of priority. For Community applications pending at the end of the transition period, owners will have six months in which to file a UK application and benefit ad hoc from the same priority date as the parent Community application for the purposes of distinctiveness, novelty and entitlement.

The administrative arrangements for the transitioning of such EU rights into UK rights have not been agreed. The EU's position is that such steps should be carried out by the UK free of charge on any right holder.

The UK will continue to recognise unregistered Community design rights and sui generis database rights arising before the end of the transition period.

At the present time agreement has not been reached regarding arrangements in respect of geographical indications, designations of origin, and traditional speciality guaranteed, upon the expiry of the transitional period. At present, UK law does not provide for national rights of this nature.

International registrations

The UK will take measures to ensure that owners of protection for international registrations for trade marks or designs designating the EU pursuant to the 'Madrid' system (for trade marks) or the 'Hague' system (for designs) before the end of the transition period, enjoy protection in the UK for their trade marks or registered designs after the expiry of the transition period.

Exhaustion

The maintenance of the status quo means that for the duration of the transition period, the present exhaustion regime will continue - broadly speaking this is EEA-wide exhaustion. Where an IP right has been exhausted under this regime before the end of the transition period, this will remain the case at the end of the transition period.

Following the expiry of the transition period, the exhaustion regime applicable in the UK will depend upon any arrangement reached with the EU regarding future trade arrangements and steps taken by the national legislature.

Is this what was expected?

It remains to be seen whether the UK and the EU will reach an agreement pursuant to which the UK remains within any of the unitary intellectual property regimes upon the expiry of the transition period.

In the event that no such agreement is reached and the UK exits the unitary regimes at the end of the transition period, arrangements agreed so far for the transitioning of EU rights into UK rights are broadly in keeping with the common sense line advocated by stakeholders since the UK's 'leave' vote in the June 2016 referendum.

The fact that arrangements have not so far been agreed in respect of pending applications for supplementary protection certificates and ongoing protection for geographical indications (and the related food protection regimes) is consistent with these areas perhaps being more appropriate for holistic review, in view of the shape of the UK's trade arrangements in the future.

Finally, what does the Draft Agreement mean for the new (and not yet ratified) Unified Patent Court and unitary patent system?

It would seem to buy some time for the participating countries to resolve the legal complexities.

The new system is a complex mix of international agreement, EU constitutional safeguards and EU law. For the UK to be within the new system following the end of the transition period, agreement would need to be reached regarding, for example, the role of the CJEU in the UK and jurisdiction and enforcement of judgments following the end of the transition period. This is beyond the scope of the Draft Agreement on the withdrawal of the UK from the EU.

Nevertheless, should the UPC and unitary patent system become operational, the Draft Agreement would appear to facilitate the UK's continued involvement in it for the term of the transition period.

So the Draft Agreement is a good start, for the operation of the transition period and the broad arrangements in respect of most types of unitary (i.e. EU-wide) registered intellectual property right at the end of that term. However the detail of such arrangements remains to be settled. More generally, the shape of the relationship between the UK and the EU following the end of the transition period, and therefore the shape of intellectual property law in the UK in the longer term, remains to be settled.


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