UK Issues Guidance on IP Implications of a No-Deal Brexit

by Morgan Lewis
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UK authorities have recently released statements on how patents, trade marks, Community designs, and copyright will be handled if the United Kingdom and the European Union fail to reach a deal before Brexit.

Negotiations between the United Kingdom (UK) and the European Union (EU) are underway to reach an agreement before Brexit that is scheduled for March 29, 2019. The UK government assures the general public that negotiations are progressing well, but it is simultaneously preparing in the event that no deal is reached.

Recently, the UK Department for Business, Energy & Industrial Strategy (BEIS) issued several statements addressing how intellectual property will be handled if no agreement is reached prior to Brexit. According to these statements, intellectual property owners will largely benefit in the UK from the IP rights that they already enjoy in the EU, but there will be certain steps that IP owners will have to take to secure those rights.

The statements issued by the BEIS are summarized below. It will be important for IP owners to track the timing of Brexit, the final outcome of the negotiations, and the laws and procedures put in place, so that they may take advantage of the benefits that any such laws and procedures provide and otherwise avoid any diminution of their IP rights.

Patents

The BEIS statement on patents provides guidance on (i) Supplementary Protection Certificates; and (ii) the Unified Patent Court and Unitary Patents.

i. Supplementary Protection Certificates

A Supplementary Protection Certificate (SPC) is an industrial property right that is granted for a product that has obtained authorization to be placed on the market as a medicinal product. It extends the protection conferred by a patent, but only in respect of the authorized product and any use of that product as a medicinal or phytopharmaceutical product. SPCs are available for various regulated and biologically-active agents, namely human or veterinary medicaments. The UK’s published guidance indicates that the relevant EU legislation on SPCs (or its domestic implementation) will be retained in UK law under the EU Withdrawal Act of 2018. The existing systems will therefore remain in place, operating independently from the EU regime, with all the current conditions and requirements. Any UK legislation supporting the existing systems will also continue to function as normal.

ii.  Unified Patent Court and Unitary Patents

 The Unified Patent Court (UPC) is a proposed common patent court open to all EU member states. Germany has not yet ratified Unified Patent Court Agreement so the UPC is not yet in force. Once it is, EU patent holders will be able to request a unitary patent from the UPC, and the UPC will hear infringement cases and revocation proceedings of European patents (including unitary patents) that are valid in the territories of the participating states. Court rulings will be directly applicable throughout those territories.

If the UK exits the EU without an agreement, businesses will no longer be able to use the UPC and unitary patent to protect their inventions within the UK. Nevertheless, existing unitary patents at the time of Brexit will give rise to equivalent UK patents to ensure continued protection in the UK. In addition, UK businesses will have access to the UPC and unitary patent to protect their inventions within the contracting EU countries. However, in the UK, businesses will only be able to protect their inventions using national patents. UK businesses will still be open to litigation within the UPC based on actions they undertake within the contracting EU countries. Likewise, EU businesses will not be able to use the UPC and unitary patent to protect their inventions within the UK. Rather, EU businesses will need to apply for domestic UK rights as they currently can, via the UK Intellectual Property Office and the non-EU European Patent Office.

Trade Marks and Community Designs

The BEIS also issued a statement addressing issues related to registered and pending trade marks and Community designs and unregistered Community designs.

i. Registered and Pending Trade Marks and Community Designs

Upon Brexit, registered EU trade mark and Community design right holders will be notified that a new equivalent UK right will be granted pending “minimal administrative burden.” At present, it is unclear what the “minimal administrative burden” will be and whether that will require a fee or any type of filing. These equivalent UK trade marks and Community design registrations will benefit from the priority date of the corresponding EU registration, but will be subject to the UK renewal process. The EU trade mark registration will continue to form the basis of proceedings before the UK courts and the UK Intellectual Property Office’s Tribunal.

There will also be a new equivalent right available to applicants with a pending EU application at the time of Brexit. However, applicants will not be notified of this new equivalent right and it will not be automatic. Rather, in order to retain the EU application priority date, applicants must file in the UK for the same protection within nine months from the date of Brexit. It is not yet clear what the cost of that filing will be. Depending on how negotiations progress and if there is no deal prior to Brexit, there may be a rush of applications. If no deal is reached, we would recommend filing earlier in the application period to avoid any injurious bureaucratic delays.

Brexit is anticipated to have no effect on existing registrations and applications in the remaining EU member states. Likewise, UK, EU, and other applicants may continue to apply for protection in the EU through current procedures.

ii. Unregistered Community Design Protection

With regard to unregistered Community designs, the UK intends to create a “supplementary unregistered design right” that will protect designs disclosed in the UK after Brexit. Details have not been released about this new right, but the UK government has indicated that it will largely mirror existing protection under EU unregistered Community design law and will not require any specific action by right holders.

Copyright

In the UK, copyright protection is currently available through international treaties and a body of EU law that includes several cross-border copyright mechanisms. The UK’s continued membership of the key international treaties ensures that copyright protection will remain largely unchanged. In addition, under the EU Withdrawal Act of 2018, the UK will retain the EU Directives and Regulations on copyright as UK law. However, upon Brexit, the reciprocal element of the EU’s cross-border copyright mechanisms will cease to apply to the UK. A few examples of these mechanisms are listed below:

  • Sui generis database rights: European Economic Area states will no longer be obligated to provide database rights to UK nationals, residents, and businesses. Accordingly, UK owners should consider other forms of protection.
  • Portability of online content service: Online content service providers will no longer be required or able to offer cross-border access to UK consumers. UK consumers may see restrictions to their online content services when visiting the EU.
  • Copyright clearance in satellite broadcasting: UK-based satellite broadcasters that currently rely on the country-of-origin copyright clearance rule when broadcasting into the EEA may now need to clear copyright in each member state to which they broadcast.

Resources

For more than three decades, Morgan Lewis has represented companies and institutions doing business in the United Kingdom and globally. Our Brexit team of lawyers have been advising clients on a variety of legal issues in the run up to the decision and have continued to assess the complex short- and long-term implications of the Brexit vote. Our Brexit Resource Centre will continue to provide guidance on the legal and business implications of the United Kingdom’s decision to leave the European Union. Please feel free to speak to your usual contact at Morgan Lewis or to contact any one of the Brexit Team via Brexit@morganlewis.com.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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