If your business uses intellectual property, it is vital you are aware of the changes that Brexit might bring to trademarks, copyright, patents and the like. Our Brexit Director Peter Wilding examines some of the issues to see just what you should be doing now.
Does your business use intellectual property? Are trademarks, copyright and designs mission-critical to your profitability?
You probably know that most intellectual property protection comes under the EU’s umbrella. So what happens if Britain leaves the EU without a deal? Will businesses still be protected?
I believe the chances of a no deal are actually rising unless a political event intervenes to change the parliamentary arithmetic. However, in the unlikely case that May’s deal is approved without recourse to another referendum or a general election, both the UK Government and the EU have agreed to have a ‘transition’ or ‘implementation’ period which would last at least until 31st December 2020.
Current EU laws surrounding IP are likely to continue throughout this period, and therefore if a deal is struck, then Brexit Day will be extended to 31st December 2020.
This uncertainly is hopeless if you rely on the widest and most secure intellectual property protection. This is because for many businesses, intellectual property protects more than just an idea or a concept – it protects genuine business assets that may be integral to the core services of the business and overall long-term viability.
Intellectual property can consist of many different areas, from logos and corporate identity through to products, services and processes that differentiate your business offering.
It’s when these ideas are used without permission that an organisation can suffer. Almost all businesses have undoubtedly benefited from the internet, where products, services and marketing communications can reach vast audiences at relatively low costs – but this has also increased the chances of intellectual property theft.
Companies of all sizes are at risk of having their unique ideas, products or services infringed upon, even if they are on the other side of the world, making intellectual property protection more important than ever.
The EU angle – trademarks and community designs
Both EU Trade Marks and Community Designs (registered and unregistered) are granted by the EU Intellectual Property Office (EUIPO) and are governed by EU directives and regulations. Therefore Brexit is likely to have the most impact on Trade Marks and designs.
An EU Trade Mark provides protection throughout the whole of the EU by means of a single, unitary registration, offering trade mark proprietors a cost effective way of protecting their trade marks in 28 different countries.
There are two types of design protection in the EU, namely, Registered Community Designs (RCDs) which are obtained by filing an application at the EUIPO and Unregistered Community Designs (UCDs) which automatically come into effect as soon as a novel product is made available in the EU.
Whether or not a ‘deal‘ is reached, both the EU and the UK government agree that existing right-holders should not lose out. The draft agreement on the UK’s exit, approved on the 25th November last year, stated that in the event of a ‘no deal’ Brexit, existing right-holders would be granted a separate, but equivalent UK right, at minimal cost and administrative burden.
The UK Intellectual Property Office has now confirmed that it will protect the rights of trade mark and design holders, even in the event of a ‘no deal’. As such, all existing registered EUTMs and RCDs will be automatically granted an equivalent UK right. This will involve an automatic ‘cloning’ of the existing registration, at no cost to the right holder. However, pending applications will need to be re-filed within a 9 month period.
Right holders will, however, be able to ‘opt out’ if they do not want protection in the UK. The same provisions will apply to International trade mark and design registrations which are protected in the EU. These cloned registrations will, however, become standalone national UK rights, rather than International registrations designating the EU and UK.
So far so good. But, if no EUTM or RCD application is filed on Brexit day, separate EU and UK applications will need to be filed directly. If you have a pending EUTM or RCD application on Brexit day it will need to be re-filed in the UK within the following 9 months.
The EU angle – Unregistered Community Designs (UCDs)?
Although UCDs are free, and come into effect automatically, they offer a shorter term and more limited form of coverage compared to RCDs. That said, they are useful rights, and provide pan-EU protection instead of, or alongside, RCDs.
It is worth noting that there is also an unregistered UK Design Right, which is similar to the UCD, but has a longer term (up to 15 years compared to 3). Therefore, it may seem that loss of the UCD may not pose a problem. This would be wrong.
Aside from the term of protection, the unregistered UK Design Right differs from the Unregistered Community Design right in so far as the former does not cover ‘surface decoration’. Therefore, the loss of UCD would leave designers of novel surface decoration (who choose not, or are unable, to file a registered design) exposed.
So if a UCD subsists on Brexit day, the UK will continue to recognise the right, such that it is protected and enforceable in the UK for its entire term. If the UCD does not yet subsist on Brexit day, newly generated UCDs will not cover the UK after this date. The UK government intends to create a supplementary unregistered UK Design Right which will mirror the UCD’s coverage of surface decoration.
The EU angle – patents
European and UK Patents are not governed by EU law. The European Patent Convention (EPC) is a non-EU agreement, and the European Patent Office (EPO) is a non-EU body. As such, with respect to patents, it’s “business as usual”.
However, there are two systems which are likely to come into force later this year: the The Unitary Patent (UP) and Unified Patents Court (UPC). The Unitary Patent promises to move closer to an ‘EU patent'. It is unlikely that the UK will be covered by the Unitary Patent, and should protection in the UK be desired, it will need to be designated as a separate state (as it is at the moment). UK companies will be able to designate the Unitary Patent via the existing European Patent process, and therefore will be able to take advantage of this system.
Currently, European Patents cannot be enforced centrally. A country-by-country approach must be taken. The Unified Patents Court promises to solve this problem- offering a single court to enforce both UPs and ‘traditional’ European Patents.
The UK has played a key part in the UP and UPC processes, and the UK Government has stated that it is keen to remain a part of the UP and UPC. Whether that is possible remains to be seen.
Across intellectual property law, a no deal Brexit would, in the longer term, provide some scope for divergence from the EU's legislation and the case law of the European Court of Justice. Where the interpretation of EU law continues to require references to the court, such as in some aspects of trademark law, the UK courts may reach a settled solution sooner following Brexit than would otherwise be possible. However, where the interpretation of EU law is settled, the preservation of the acquis will incorporate this and the scope for divergence with EU jurisprudence can be expected to be minimal for as long as the underlying legislation remains aligned.
All stakeholders should be aware of the impact of Brexit for transactional terminology, including in respect of intellectual property:
• Existing documents, including licences, distribution agreements and other transactional arrangements, should be audited to identify those in which unclear or inappropriate terminology is used. The parties should consider seeking a suitable clarification agreement now. For new agreements, care must be taken with geographical terms, for example listing by name the countries covered by the agreement, not simply the "EU".
• Brexit will not necessarily impact the need for parties to ensure that documentary records are kept on the existence and status of both registered and unregistered intellectual property rights. This facilitates timely review of scope of protection vs maintenance fee cost for registered rights and ensures that the subsistence and scope of unregistered rights can be established should a dispute arise, irrespective of whether the regime is UK national or EU-wide.
Here at FBC Manby Bowdler we have a stellar team of experts on our dedicated Brexit Advisory Team who can help you take control of your business whatever the politicians decide.
If you would like to contact Peter or the rest of the team to discuss any of the above please call 01694 724440, 07901 008220 or email firstname.lastname@example.org.