Following years of speculation and acrimony, the UK finally withdrew from the European Union (EU) on 31 January 2020. Yet, in accordance with the Withdrawal Agreement, which stipulates a transition period ending on 31 December 2020, EU law will still be applicable to the UK in relation to EU trademarks and Community designs and any related proceedings. As such, Brexit will not affect these intellectual property rights until the end of the transition period, which will effectively operate as a standstill period. Once the implementation period has ended, what impact will Brexit have on intellectual property (IP) rights? How will European patents be affected?
It is difficult to know exactly what IP rights will look like post-Brexit, but from a patent perspective, little will change even after the transition period. National UK patents and European patents covering the UK will still be available in the current manner as membership of the European Patent Convention is not conditional on membership of the EU, and neither system will be significantly affected.
However, the UK will not be a member of the Unified Patent Court (UPC) system due to the influential role played by the Court of Justice of the European Union (CJEU) in the UPC agreement. In a statement announcing the decision, the UK government said: “The UK will not be seeking involvement in the UPC system. Participating in a court that applies EU law and bound by the CJEU is inconsistent with our aims of becoming an independent self-governing nation.” The announcement raised the eyebrows of those in the European patent community who had expected the UK to hold to its ratification, despite Brexit. But Alexander Ramsay, head of the UPC Preparatory Committee, said: “Ever since the Brexit referendum in 2016 we were aware that something like this could happen, so the decision of the UK government does not come as a total surprise.”
“Brexit has upended the international order and forced a drastic rethink of established European institutions, with the outlook for IP no different.”
Withdrawing from the UPC will increase financial pressure on other UPC member states. They must also decide which city will host the UPC’s London division, with Milan and Paris considered most likely.
It is not clear how exactly the UK will be able to extricate itself from the UPC agreement, which contains no provisions for a member state to drop out. The UK’s exit may delay the implementation of the UPC, assuming German ratification is forthcoming. Disagreements over the future of the UPC’s pharmaceutical division, and perhaps the feasibility of the entire UPC project, will flare. Of course, the UPC agreement could be amended to allow the UK to continue to participate in the system, though this is highly unlikely given the UK’s unwillingness to submit to the jurisdiction of the CJEU.
The Brexit withdrawal agreement will also leave copyright law relatively untouched throughout the transition period. However, from January 2021, the UK’s copyright laws will begin to diverge from the EU’s. Already, the UK has confirmed that it will not implement the EU’s controversial new Directive on Copyright in the Digital Single Market. As the directive’s implementation deadline falls after 31 December 2020, it will not be enshrined in domestic UK policy. According to the government, “any future changes to the UK copyright framework will be considered as part of the usual domestic policy process”.
Database rights will also be impacted by Brexit once the implementation period comes to an end. Under the terms of the withdrawal agreement, IP rights exhausted in the EU and the UK before the end of the transition period shall remain exhausted in both areas. As such, UK businesses and individuals will not qualify for database right protection in the European Economic Area (EEA) and will need to instead rely on their other IP rights or contractual rights. The UK will, however, continue to provide equivalent protection in the UK for databases of UK businesses and individuals.
Regarding trademarks, the transition period means that little will change until 1 January 2021, but some divergence between UK and EU trademark rules is likely thereafter. Furthermore, as EU trademarks will no longer protect trademarks in the UK, the UK will create a comparable UK trademark for all registered EU trademarks.
Brexit has upended the international order and forced a drastic rethink of established European institutions, with the outlook for IP no different. Because of the implementation period there will be very little material change in the coming months, and the UK will remain an attractive venue for business and for obtaining and enforcing IP rights in Europe. That may change, to some extent, from January 2021.
© Financier Worldwide
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Richard Summerfield