On June 23, 2016, the United Kingdom (UK) voted to leave the European Union (EU). The British exit of the EU is being referred to as “Brexit,” with England and Wales separating from the EU in a 52 percent to 48 percent vote in favor of Brexit.
To add further uncertainty, the results of the Brexit vote are now subject to a lower court ruling requiring Parliament to again vote on what has already been decided. The UK Supreme Court is presently reviewing the lower court ruling. Regardless of the outcome, it is obvious the relationship of the UK to the EU will change. The following sets forth issues relevant to the procurement and protection of intellectual property in Europe should the UK government formally withdraw from the EU.
Implications of Brexit
Given the uncertainty of Brexit, many are left wondering what implications this will have for intellectual property rights across the UK and EU.
However, the UK government has not yet triggered Article 50, which formally starts the beginning of a two-year period of negotiations. This gives the UK control of the timing of their departure. For now, the UK remains an EU member state and EU laws will continue to apply to the UK until negotiations are complete.
The Conservative Party elected a new Prime Minister on September 9, 2016, and the appropriate measures for the final exit from the EU are still being evaluated. The Article 50 notice is likely to be issued before the end of March 2017, after which laws will be amended and enacted, and international agreements will be negotiated.
The political environment may make an agreement difficult to attain; however, the UK continues to be an attractive trading partner with the fifth largest GDP, globally.
Four freedoms are required of EU member states and European Economic Area (EEA) member states. These freedoms are the free movement of goods, persons, services and capital through the EU and EEA. EEA member states, while reserving some independence from the EU, must comply with these freedoms. The UK electorate has rejected some of these freedoms and likely will not be allowed to join the EEA. Absent negotiated treaties, intellectual property will likely be governed as though the UK has no affiliation with the EU. Given the complexity of Brexit as a whole, governing intellectual property is not presently a high priority of either the EU or the UK at this time. The following sets forth some issues and likely outcomes regarding intellectual property as the result of Brexit.
UK National Patents
The law on UK national patents and applications filed in the UK will be unaffected by Brexit.
European Patent Protection
The European Patent Office (EPO) grants patents for European countries and is an international organization not associated with the EU. The UK is still committed to the EPO’s Administrative Counsel and the EPO already works with non-EU countries such as Switzerland, Norway and Iceland. Going forward, European patents will continue to be validated in the same way they are today and existing European UK patents will not be affected.
Presently, the EPO grants a European patent that is then registered and litigated at a national level within the EU member states. The Unitary Patent Scheme is anticipated to be ratified and implemented during early 2017. The UK and Germany are the last two EU member states that need to ratify the agreement. Ratification would replace national patents with European unitary patents covering the EU as a whole. Three Unified Patent Courts (UPC) in which patent litigation would be conducted are to be located in Paris, Munich and London. After the Article 50 negotiations, the UK may be prevented from taking part in the Unitary Patent Scheme (UPS). As a result, the UPC would not likely extend its jurisdiction to the UK.
Although it is difficult to predict how the UPS might be implemented absent the UK, it is likely some accommodation would or could be made to accommodate the UK. Most likely, Brexit will cause a delay in the UPC commencement and London’s UPC may be relocated to a country within the EU, with further amendments to the UPC Agreement.
Patent applicants will continue to need UK patent protection and the exit from the UPS may deem the unitary patent less attractive. Applicants may also have additional challenges in seeking both a patent from the UK and from the UPC. The UPC will affect all owners of EP patents, and unless they have opted out, they will be subject to the jurisdiction of the EU.
UK national trademarks and designs will not be affected, and when Brexit negotiations are complete, EU registrations will no longer extend to the UK (absent a negotiated agreement to the contrary). EU trademark registrations formerly known as Community Trademark Registrations will not extend to the UK. Therefore, a trademark registration in the EU will provide no protection in the UK. It is unclear at this time whether automatic extensions of existing registrations or re-registrations to the UK will be available. For the next two years, patentees may continue to file EU trademark applications and will be extended protection in the UK until Brexit is complete. However, we recommend considering filing a parallel UK trademark application to assure protection in the UK after Brexit is complete.
The UK is a member of International Treaties, which protects copyrights. Copyrighting is not fully harmonized in the EU; therefore, local laws will apply to the UK as it pertains to copyright law.
The long-term effect of Brexit on intellectual property is yet to be determined, given the two-year period before its implementation. However, IP owners and brand managers should work with legal professionals to identify which patents are likely to be affected.