Impact of Brexit on IP Practice in the EU
Following the result of the Brexit referendum in the UK, the way IP matters are understood and addressed in the EU will change. The British Government is expected to formally notify the intention to leave the EU to the European Council according to Article 50 of the Treaty on the European Union by the end of this year. Since then, a two-year term will start allowing negotiations with the EU regarding the UK’s withdrawal.
In the following sections we provide a summary of the main changes that will affect the protection of IP rights in the EU market and the UK, once the negotiations have ended and the UK does not definitely belong to the EU.
Generally speaking it can be presumed that after the two-year period, all the EU Directives and Regulations will no longer have effect in the UK. Its legislative bodies will have the power to adapt its entire legislative framework to a national scale and its courts will not be bound by the case law of the Court of Justice of the European Union (CJUE). However, it should be recalled that the exact impact of Brexit on the protection of IP rights will depend on the results of the EU-UK negotiations:
1. EU IP Rights
EU Trade Marks
EU trade marks (EUTM) will still have effect in the UK until the exit date. It is possible that conversion of EUTMs into UK trade marks will be allowed for EUTM holders. This depends on the outcome of EU-UK negotiations or on a unilateral decision by the UK.
If the UK market is of special interest, double filing of UK and EU trade marks is recommended in order to stay on the safe side and to maintain trade mark protection in both jurisdictions. For the same conservative purposes, it is suggested that the earlier UK marks be carefully renewed.
After 5 years from the exit date (i.e. approximately end of 2023) EUTM holders will not be able to rely on the use of their trade marks in the UK for the purposes of proof of use, and EUTMs may be subject to revocation for non-use.
Also in matters of reputation, from the exit date (i.e. approximately end of 2018) reputation of a mark acquired in the UK will not serve to substantiate its reputation in the EU market.
Finally, it is advisable that the EUTM holders review all trade mark coexistence and license agreements to verify that these contracts remain valid and effective from the exit date of the UK from the EU.
Community Designs
Similar considerations to those outlined above can be drawn in respect of the effects of Community designs until the exit date, the availability for conversion and both filing and renewal strategies.
From the exit date it will not be possible to claim rights in a Community unregistered design incorporated in a product disclosed or used in UK.
As regards the issue of prior art in respect of the novelty and individual character requirements in connection with disclosure of a Community design, the specialized circles in the UK market will no longer be taken into account.
Geographical Indications
In general terms, the European Geographical Indication (GI) system allows for applications for registration of GIs concerning a geographical area situated in a third country, as would be the case for the UK. Therefore, following the UK’s withdrawal from the EU, new UK GIs will be protected in the EU by following the registration rules set out for GIs originating in third countries.
However, we have to draw a distinction between GI protected under Regulation 110/2008 for spirit drinks and those that are protected under Regulation 1151/2012 for foodstuff when considering whether the protection afforded at the EU level could be extended to the UK jurisdiction.
Whilst in the UK a national system protecting GIs for spirt drinks already exists it will be needed to create one for GIs concerning foodstuff since for these latter no legal framework has been so far implemented at national level. Therefore, it will be a matter of negotiations between the UK and the EU or unilateral decision of the UK to set the criteria to protect GIs for spirits and foodstuff in the UK.
European Patent with unitary effect
If the Unitary Patent system finally enters into force, the protection granted by the European Patent with unitary effects will not extend to the UK. Therefore, in order to obtain patent protection in the UK patentees either will have to file a national patent application before UK IPO, or a European patent application before the EPO and then validate it in the patent in the UK.
The foregoing does not prevent UK patentees from filing and being granted a European Patent with unitary effects in order to get patent protection throughout the EU.
A different issue is whether the Agreement for a Unified Patent Court can enter into force without the UK. The reason is that according to Art. 89 to enter into force the Agreement must be ratified by the three countries with the higher number of European patents in 2012. Those countries are UK, France and Germany. It is presumed that once the UK leaves the Union, the third Member State with the highest figure of European patent will be taken into account: Italy.
Finally it is doubtful that the Central Division of the Unified Patent Court will finally be located in London, since the UK will not be a Contracting State. According to Article 7 of the UPC Agreement one of the UPC’s sections should have its seat in London and this circumstance may not change since there is no strict requirement that the Court should be physically located within a contracting state. However, this solution would result to be impractical if the UK eventually withdraw from the EU so that it is likely that the section of the UPC will be seated in a EU Member State. At first sight, this amendment can be adopted by the Administration Committee following Art. 87.2, without a new treaty being needed.
Community Plant Varieties
The unitary protection derived from Community plant variety right will not extend to the UK jurisdiction, when UK finally withdraws from the EU. However, UK breeders will still be able to file an application for a Community plant variety registration by appointing a representative, domiciled or seated or established within the territory of the European Union.
2. Copyright and Related Rights
In matters of protection of copyright and related rights, the Brexit’s consequences will be quite harsh. If the negotiations during the next two years do not provide a different outcome, all relevant EU directives detailing the rules on copyright and related rights will cease to have effect in the UK.
While UK legal framework will remain harmonized with that of the EU in the short-term, UK authorities would not be bound by the CJEU’s case-law. Furthermore, the UK will not be obliged to implement any new EU legal text entailing copyright and related rights. This include the proposed Regulation that prohibits “geoblocking” or the expected measures to amend the InfoSoc Directive or the Satellites Directive. European Companies willing to development copyright-related business models in the UK will not benefit from the multi-territorial licensing scheme provided for in Directive 2014/26 or the freedom to provide services.
3. IT-based legislations
As previously mentioned, depending on the negotiations between the EU and the UK, different scenarios may materialize and affect the relevant legislations in matter of e-commerce and data protection.
Data Protection
The brand new General Data Protection Regulation (GDPR) will not be applicable in the UK. This means that by 2018, when the GDPR will finally become applicable in the EU Member States, the UK might set its own standards for personal data protection that will be implemented by the corresponding Data Protection Authority (ICO). In any case, the GDPR will apply to UK-based enterprises directing their activities to the EU.
In order to facilitate data transfer from and to the UK, an international agreement EU-UK is feasible since it is expected that the level of protection of the new UK legislation in the field will be similar to that in the GDPR.
E-commerce
The e-commerce Directive will no longer constitute the basis of the e-commerce legislation in the UK. This might imply that the UK may decide to modify its national legislation establishing new rules in relation to access to e-commerce activities, exemptions to liability of Internet service providers, or measures related to digital enforcement.
Consumer protection in the digital environment
Same considerations can be drawn in respect of the interdependence between the consumer protection directives – in particular Directive 2011/83 – and the UK national law. This is particularly relevant for the proposal for a Directive on certain aspects of contracts for the supply of digital content. If finally adopted, it is our opinion that this Directive will entail huge amendments to the consumer protection national legislations. Since UK will not be bound by those EU directives, European companies offering their online services to UK residents will have to adapt their contracts to the new legislation that can be adopted in the island.
4. IP enforcement and cross-border litigation
Enforcement measures in the EU and the UK will remain harmonised in the short term as a consequence of Directive 2004/48. However, UK courts will not be obliged to follow the CJUE case law in this matter, and the UK will not be obliged to implement any directive that the EU may adopt in the future.
In relation to cross-border enforcement, the following situations shall exist:
- Actions concerning the validity or the registration of the rights: the courts of the Member State of registration will still have exclusive jurisdiction regardless of whether the plaintiff or the defendant is domiciled in the UK (art. 24 Regulation 1215/2012, Brussels I). If the IPR is registered in the UK, Brussels I will not apply anymore but it is presumed that UK courts will have exclusive jurisdiction as well.
- Infringement actions: three situations need to be distinguished:
- i) if the complaint is filed in a Member State against a defendant domiciled in the UK, Brussels I Regulation establishes that the court of that Member State shall determine its jurisdiction in accordance with its national legislation. Presumably, jurisdiction shall exist if the infringement has been committed in the territory of that Member State. The applicable law will be determined according to Art. 8 Regulation 864/2007 (Rome II): the law of the country for which protection is sought.
- ii) if the complaint is filed in a Member State by a person with domiciled in the UK against a person domiciled in a Member State, the court shall apply the Brussels I Regulation to determine its jurisdiction and the Rome II Regulation to determine the applicable law.
- iii) the complaint is field in the UK against a person domiciled in a Member State. UK courts will determine their jurisdiction and the applicable law in accordance with UK national legislation. Neither the Brussels I Regulation nor the Rome II Regulation apply in the UK anymore. The hypothetical recognition and enforcement of the judgement in a Member State will not benefit from the automatic system established in the Brussels I Regulation. Such exequatur shall be determined in accordance to the national legislation of each Member State.
- Validity of jurisdiction clauses in favor of English courts will not be determined by the Brussels I Regulation but by national national rules of the Member States.
Finally, judicial cooperation between Member State courts and UK courts will become more difficult since they will not be governed by Regulation 1393/2007 (notification of documents) and Regulation 1206/2001 (taking of evidences abroad) but by international conventions in the field.
Related Posts:
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- On the Different Interpretation of Forum Delicti Commissi in Relation to EU Trademarks and National Trademarks
- New Briefing Paper on the EU Trade Secrets Directive
- The Adoption of Provisional Measures in Cross-border IP Disputes in the Framework of the Brussels I Regulation