Guide to a no deal Brexit
As part of the UK Government’s preparations for a possible “hard Brexit”, it has published a set of guidance notes on 24 September 2018 on how intellectual property rights would be affected if the UK leaves the EU in March 2019 with no deal. This is part of a series of technical notices being issued by the UK Government to assist businesses in their preparations.
No Deal Brexit Government advice: trade marks & designs
The UK Government has published draft legislation, The Trade Marks (Amendment etc) (EU Exit) Regulations 2018, which confirms the UK government guidance notes, published on 24 September 2018, on trade marks in the event of a no deal Brexit.
The draft legislation provides that an existing EU trade mark registration will be treated on and after exit day as if it had been filed and registered as a UK trade mark. The new registered trade mark will be referred to as a “comparable trade mark (EU)”, and will be created automatically and at no cost to the registered owner.
There is a provision to opt out if the EU trade mark owner does not wish to own a comparable trade mark (EU), however it is not possible to opt out if the mark has been put to use in the UK on or after exit day by the registered owner or with their consent; if the mark is subject to an assignment, licence, security interest or other agreement or document; or if there are pending proceedings based on the comparable trade mark (EU).
In relation to EU trade mark applications which are pending on exit day, applicants may file a new UK trade mark application within a period of nine months from exit day, maintaining the filing date, priority date or seniority date.
The draft Regulations do not make reference to international trade mark registrations or applications (trade marks protected or filed through the Madrid system).
In relation to registered Community designs, the UK Government has confirmed in the guidance notes that it will ensure that an equivalent enforceable registration will be provided for existing registrations. The creation of the equivalent design registration in the UK will be at minimal administrative burden. The registered owner will be informed that a UK right has been granted, but will have the option to opt out.
For Community designs which are pending at the time of the actual exit from the EU, the Government will provide an option for the applicants to apply for the same protection in the UK within a period of nine months from the exit date, maintaining the date of filing (and, it is anticipated, priority) of the EU application. These proposals mirror the provisions set out in the Draft Agreement on the withdrawal of the UK from the EU (discussed here: IP & Brexit: the draft agreement on UK withdrawal).
It has been made clear that the filing of a new UK trade mark or design application, in the designated nine month period, will be at the usual cost and subject to the usual application processes in the UK.
In relation to trade marks and designs that have been protected or filed through the Madrid or Hague systems, the Government states its intention to work with, amongst others, WIPO to provide continued protection of existing registrations and find “practical solutions” for pending applications. Although this is another positive statement from the Government, the added complexity of working with WIPO, a non-EU body, could delay matters, particularly for pending applications. As such, it may be advisable to reconsider filing strategies when using these systems to cover the EU until the position becomes clearer.
The Government has confirmed that any unregistered Community design right arising before the exit date will continue to be valid for the remaining period of protection. In addition, the UK is proposing a “supplementary unregistered design right” which mirrors the features of the unregistered Community design; this is a welcome proposal as it should mean that design features including surface decoration (for example, 2D logos) can be protected under unregistered design law in the UK going forward.
There has been discussion that some UK practitioners may be unable to act before the EUIPO post-Brexit. This will not affect D Young & Co, who will continue to be able to handle EU trade mark and design work before, during and after the Brexit process whatever the outcome of the Brexit negotiations.
No Deal Brexit Government advice: exhaustion of rights
Currently, IP rights are considered “exhausted” once goods have been placed on the market by the IP owner or with his consent anywhere within the European Economic Area (EEA), namely the member states of the European Union plus Iceland, Liechtenstein and Norway.
In a no-deal scenario, the UK Government has confirmed that the UK will unilaterally continue to recognise EEA regional exhaustion from exit day “to provide continuity in the immediate term for businesses and consumers”. Accordingly, IP rights in relation to goods which are being imported into the UK from an EEA country will continue to be considered as exhausted, at least for a temporary period (currently of unspecified length). This clarification will no doubt be welcome news for businesses such as those who parallel import pharmaceutical products into the UK. The UK Government is also considering options for what exhaustion regime should apply after the end of such temporary period.
However, the position relating to exports from the UK may well be different, if the UK and EU fail to reach agreement. (Under the terms of the proposed Withdrawal Agreement, published in March 2018, exhaustion was to continue to apply in relation to any goods for which the IP rights had already been exhausted both in the EU and the UK prior to the end of a transition period running to the end of 2020.) Therefore, there could be restrictions from exit day on the parallel import of goods from the UK into the EEA. In its technical notice, the UK Government advises that “business undertaking such activities may need to check with EU rights holders to see if permission is needed”. This could of course have potentially important implications for UK businesses who export to the EEA, as well as for business in the EEA who rely on supplies of products from the UK.
No Deal Brexit Government advice: geographical indications
The UK Government has published guidance (www.gov.uk) on the likely issues which will arise with regard to GIs. If there is no deal, after 29 March 2019, the Government has confirmed that it will set up its own GI schemes which will be WTO TRIPS compliant, broadly mirror the current EU regime and be no more burdensome to producers.
It identifies, among others, the following issues:
A public consultation will be held to include the UK GI logo and appeals process. The protections will be similar to those enjoyed now by UK GI producers, with all 86 UK GIs given new UK GI status automatically. In the unlikely event of a no deal scenario, there are two issues for UK producers of GI products to consider:
- the use of a new UK logo on products marketed in the UK
- the preparation of an application for GI status in the EU, or other steps that producers may wish to take in order to protect product integrity – for example, applying for trade mark protection.
On this second point the guidance anticipates that all current UK GIs will continue to be protected by the EU’s GI schemes. If that does not occur producers might consider protecting their products by applying for EU collective marks or EU certification marks.
A further point is that the UK would no longer be required to recognise EU GI status. EU producers would be able to apply for UK GI status. The UK Government will be publishing guidance on the UK GI schemes in early 2019. This particular point has been highlighted by the EU negotiators as being very important and requires a clear resolution before a final deal is reached. We assume there is a concern, for example, that without a deal, in theory, ‘British Champagne’ may be a possibility.
The guidance advises that “further information on the new UK schemes will be published in the coming months. We aim to give businesses and individuals as much certainty as possible as soon as we can, and to ensure that any new requirements are not unduly burdensome.”
No Deal Brexit Government advice: patents & the UPC
The overall message is one of continuity and business as usual, with the Government seeking to maintain the pre-Brexit status quo.
The UK Government also explicitly notes that, separate to UK patent matters, European patent attorneys based in the UK, such as D Young & Co, can continue to represent applicants before the European Patent Office, since it is not an EU body; this has also been confirmed by the EPO itself (www.epo.org).
Unitary patent and Unified Patent Court
The Unified Patent Court will hear cases relating to European patents and the new unitary patent – both administered by the non-EU European Patent Office (EPO).
The Unified Patent Court will be an international patent court established through an international agreement (the Unified Patent Court Agreement) between 25 EU countries. However it is unclear whether the Unified Patent Court and unitary patent will start before 29 March 2019.
If there is no Brexit deal, then the UK Government considers two possible scenarios:
There is a possibility that the Unified Patent Court will not be fully ratified and never come into effect. In this case there will be no changes for UK and EU businesses at the point that the UK exits the EU.
However if it is fully ratified (for its part, the UK has already ratified), then it is currently unknown if the UK would be required to withdraw from one or both of the unitary patent and Unified Patent Court schemes.
If full withdrawal is required, then businesses will not be able to use the Unified Patent Court and unitary patent to protect their inventions within the UK, and so in effect the UK will keep its current status as a separate state to be validated upon grant of an application by the EPO, much like Spain.
However, UK business will still be able to use the Unified Patent Court and unitary patent to protect their inventions within the other contracting EU countries.
Hence in the event that the Unified Patent Court comes into force, but the UK needs to withdraw from the Unified Patent Court and unitary patent, then UK, EU and third country businesses will still be able to use the Unified Patent Court and unitary patent to protect their inventions within the EU, and they will be able to validate the UK upon grant of an EP application as before.
In the unlikely event that the Unified Patent Court comes into force before the end of March 2019, the UK Government explicitly assures that any existing unitary patents will give rise to a corresponding separate UK right automatically.
Correspondence addresses and confidentiality
As noted above, European patent attorneys based in the UK can continue to represent applicants before the European Patent Office, since it is not an EU body. Conversely meanwhile, although prosecution of UK patents is by UK patent attorneys, it is possible for the owner of a UK patent to have an address for service elsewhere in the EEA.
In light of this, the UK Government has now provided assurance that this will continue, and that there is no plan to change current client-attorney privilege for non-UK attorneys in the EEA.
EU Biotech Directive
The UK Government proposes to retain the existing EU law (EU Biotech Directive) relating to biotech inventions after March 2019. Therefore, the legal requirements for patenting biotech inventions will remain in place - these requirements are already implemented in UK national patent law. Patent examiners will continue to apply the same law when examining patent applications in this area. Third parties who wish to challenge the validity of a patent will be able to do so on the same grounds as at present.
No Deal Brexit Government advice: SPCs
The UK Government proposes to retain the existing EU law relating to SPCs after March 2019. Therefore the SPC regime in the UK will continue to operate as before, even if the event of no deal.
The UK Government states that “… all other EU legislation relevant to patents and supplementary protection certificates will be kept in UK law..”
The UK Government also states that existing SPCs and licences in force in the UK will therefore remain in force automatically after March 2019, and the legal requirements and application process for new SPCs in the UK will remain essentially the same.
The UK Government has also indicated changes that may occur in the regulation of human and veterinary medicines and the various forms of regulatory-based protection available. For medicines, existing marketing authorisations (MAs) granted centrally by the European Medicines Agency (EMA) will automatically be converted into UK MAs after March 2019. Existing UK MAs based on the mutual recognition or decentralised procedures will be unaffected.
The UK Government also states that regulatory data and market exclusivity will remain available based on UK MAs after the UK exits the EU, and the period of “8+2+1” years for this form of regulatory protection will remain unchanged. After the UK’s exit from the EU, the start of this period will be the date of authorisation in the EU or UK, whichever is earlier.
The UK Government also states that paediatric medicines will be regulated by a UK system after the UK exits the EU, and incentives will remain to encourage such medicines onto the UK market. It can therefore be envisaged that the 6-month extension will remain available for SPCs for medicines on which agreed paediatric studies have been carried out, although the UK Government indicates that details will be subject to consultation.
The UK Government also states that consultation will take place on the proposed regulatory approach to orphan medicines (for the treatment of rare diseases) after the UK exits the EU. This will include incentives to encourage such medicines onto the UK market. It can therefore be envisaged that some form of market exclusivity for orphan medicines may remain, but details will be subject to consultation.
Finally, the UK Government has indicated that they will retain the existing “EU Bolar” law which exempts from patent infringement trials carried out on generic medicines in order to obtain regulatory approval, for marketing after the patent expires.
No Deal Brexit Government advice: .eu domain names
If you are a UK resident, UK company or organisation in possession of (or planning to acquire) a .eu domain name, you may no longer be eligible to renew (including acquire and register) .eu top level domains. According to the UK Government’s latest guidance on .eu top level domains, in the event of a no deal EU exit, in order to be eligible to hold a .eu top level domain:
- Undertakings / organisations will need to have either been established within the EU or have its registered office, central administration or principle place of business within the EU; and
- Individuals must reside within the EU.
Consequently, as of 31 March 2019, the registry for .eu top level domains will be entitled to revoke, on its own initiative and without the dispute to any extrajudicial settlement of conflicts, all domain names where the registered proprietors do not reside, or are not established (or have their registered office, central administration or principle place of business) within the EU. This means that, save for the exception of "well known marks" (as defined under Article 6bis of the Paris Convention), IP rights holders will no longer be able to rely on their UK registered or unregistered rights when seeking to challenge .eu domain names that are subject of speculative and abusive registration.
Holders of .eu top level domains are therefore strongly advised to check whether they will continue to meet the above eligibility criteria. If not, you may wish to discuss transferring your registration(s) to another top level domain such as .com, .co.uk, .net or .org or transfer ownership of such domains to an EU based individual/entity.
No Deal Brexit Government advice: copyright
First published on 25 September 2018, this article has been updated and republished 08 November 2018 following further advice from the UK Government issued 26 October 2018.
With regard to copyright, the government explains that, as a result of the UK’s membership of the main international treaties on copyright (which will not be affected by Brexit), the scope of protection will remain largely unchanged. Further, the EU Regulations and Directives on copyright and related rights will be ‘ported’ into UK law under the EU Withdrawal Act 2018. It explains, therefore, that the immediate issue will primarily be one of reciprocity of those EU Regulations and Directives.
It identifies, among others, the following issues:
Sui generis database rights
Currently, businesses in European Economic Area (EEA) member states (such as the UK) are eligible for database rights in each member state (broadly, these rights do not arise in relation to databases created by non-EEA businesses).
On the UK’s departure from the EEA, database rights currently in existence will continue to exist in the UK but only UK citizens, residents and businesses will be eligible for new database rights. Similarly EEA member states will be under no obligation to recognise existing or grant new database rights to UK businesses in those member states. In light of this the UK government recommends reviewing existing licensing arrangements and, where possible, imposing licensing terms which mitigate this potential loss of rights.
Portability of online content service
At present, UK consumers can access their online content services (for example, Netflix) when they temporarily travel to another EU member state. The same is true for EU customers temporarily visiting the UK. Int he event of a no deal Brexit, portability of online content services between the UK and EU will cease when the UK leaves the EU. Consequently UK customers visiting the EU and EU customers visiting the UK may see restrictions to the content ordinarily available to them when in their home state.
Country-of-origin principle for copyright clearance in satellite broadcasting
Currently, if a satellite broadcaster clears the copyright requirements in its ‘home’ member state it can broadcast into any other EEA member state. This will cease to apply to broadcasts from the UK and UK-based satellite broadcasters that currently rely on the country-of-origin copyright clearance rule when broadcasting into the EEA may need to clear copyright in each member state to which they broadcast. The UK will continue to apply the country-of-origin principle to broadcasts from any country. Wider issues regarding broadcasting and video on demand are addressed in the UK government’s specific guidance on this issue.
At present, cultural heritage institutions established in a member state of the EEA are entitled to digitise orphan works in their collection and make them available online across the EEA without the permission of the right holder. The government explains that UK-based cultural heritage institutions that continue to do this may be infringing copyright.
Therefore, except for those in specialised industries (such as broadcasting) or with specific copyright portfolios (such as those with database rights), businesses are unlikely to be significantly affected, at least immediately, by a ‘no deal’ Brexit.
No Deal Brexit Government advice: plant variety rights and marketing of seed and propagating material
Any Community Plant Variety Rights (CPVR) which have been granted, including those held by UK business, would be automatically recognised in the remaining 27 EU member states and would be automatically recognised and given protection under the UK Plant Varieties Act.
CPVR applications which have not been granted by 29 March 2019 would not be extended to cover the UK. To obtain protection in the UK, a separate application for rights in the UK would need to be made following the usual process for UK plant variety rights, using the same priority date and distinctiveness, uniformity and stability (DUS) test.
For new varieties post 29 March 2019, two separate applications – a CPVR and a UK PVR - would need to be made to achieve the same geographical coverage which is presently achieved by one application. The cost implications for breeders are being reviewed by the Animal and Plant Health Agency (APHA). It appears that DUS tests from the EU may be accepted by the UK but that the Community Plant Varieties Office will not accept the results of UK DUS testing.
Marketing seed and propagating material
Business wishing to market seed and propagating material in both the EU and the UK would need to separately apply for listing in the EU Common Catalogue and the UK National Listing.
The UK would apply for its certification processes to be considered as a “third country recognised by the EU as equivalent for seed certification”.
Varieties that are already registered on the EU Common Catalogue but are not on the UK National Listing, are currently being added to the UK list which will allow them to be marketed for a period of two years after a no-deal Brexit. Any business wanting to add varieties to the National List in this way should contact APHA. After the two year interim period, businesses would need to comply with the new UK arrangements.