On 23 June 2016 the UK public voted in favour of the UK leaving the EU (commonly referred to as ‘Brexit’). If and when the UK formally starts the exit procedure, there will be at least a two-year negotiation period before the exit itself occurs. So, any changes won’t be implemented for some time yet.

Any UK national IP rights will be unaffected by Brexit. Some EU IP rights that have effect in the UK will be affected to different extents. Crucially, no IP rights will be lost as a result of Brexit, although some transitional measures are inevitable.

IPcopy takes a look at the key impact Brexit will have on IP, and what you should be considering now.

Patents

The current process for obtaining European patents at the European Patent Office (EPO) is governed by the European Patent Convention (EPC). Membership of the EPC is not tied to the EU (In fact, the EPC already covers many countries not in the EU such as Switzerland, Turkey and Norway). The UK will remain a part of the EPC after Brexit, and UK patent protection will be obtainable via a European patent application in the same way that it is now.

The UK’s membership of the PCT system is also independent of EU membership, and both UK national-phase filings and European regional-phase filings based on PCT applications will remain entirely unaffected.

The future Unitary Patent (UP) and Unified Patent Court (UPC), on the other hand, are tied to EU membership, and the UK’s exit from the EU is likely to mean that in the long term it could no longer be a part of the UP or the UPC. London was originally a location of one of the three branches of the Central Division of the UPC, and this was written explicitly into the UPC Regulation, so the UK’s exit will have an impact on the UPC. It is likely that the start of the UP and UPC will be delayed while the remaining EU countries renegotiate and amend the Regulation: potentially by two years or more. Alternatively, to allow the UP and UPC to get off the ground by mid-2017 as currently planned, the UK could potentially remain a part of the system for the first couple of years while it negotiates its EU exit. Exactly what will happen remains to be seen.

Ultimately, if the UP does come into force and the UK exits the EU, the UP will not cover the UK: if you opt for a UP, complementary protection in the UK would be obtained by a separate UK validation of the European patent in exactly the way that it is now. The UK part of the European patent would not fall under the jurisdiction of the UPC, but would fall under the sole jurisdiction of the UK courts. In principle, this means that a successful invalidity action at the UPC would not automatically affect the UK part of a European patent, and also means that an injunction obtained at the UPC would not have effect in the UK. However, it is possible that other arrangements may be made.

All this means that patent protection in the UK via a European Patent will carry on in exactly the same way that it does now. Patent applications filed directly with the UK Intellectual Property Office (UKIPO) will of course be unaffected.

Patent term extension for medicinal, veterinary and plant protection products in the form of Supplementary Protection Certificates (SPCs) would need to revert to new UK law as they are currently based upon EU Regulations. Given the complexities and controversies of recent CJEU decisions in the field of SPCs, it is likely that the UK would seek to improve the current system with a radical overhaul.

Trade Marks

After Brexit, existing and future EU Trade Mark registrations (EUTMs) will remain in place but will no longer cover the UK. Accordingly, separate trade mark protection will be required for the UK.

For existing EUTMs (and those filed between now and the date that the UK exits the EU), the UK will in all likelihood enact laws that provide for the ‘conversion’ of an EUTM into a national UK right which maintains the original application date. This conversion process will be determined in more detail over the course of the exit negotiation period.

Designs

As with EUTMs, existing and future Community Design Registrations (CDRs) will no longer cover the UK after Brexit. For designs filed after that point, a separate UK design application will need to be filed to cover the UK. For existing designs and those filed between now and Brexit, the UK will need to enact a provision that allows the UK part of a CDR to be ‘converted’ into a national UK right. This process will be determined in more detail over the course of the exit negotiation period.

The UKIPO has made a timely announcement that it will soon cut its design filing and renewal fees drastically. This will make UK design rights fantastic value for money, supported by an experienced and cost-effective IP Enterprise Court (IPEC).

Exhaustion of rights

Under European Law, goods already put on the market in the European Economic Area (EEA) by or with permission of an IP rights holder may be dealt with freely within the EEA without infringing those IP rights. However, this exhaustion principle does not currently apply to goods first put on sale outside the EEA.

It is currently undecided whether the UK will remain a part of the EEA: this will be one of the subjects of the exit negotiations. If the UK does not remain a part of the EEA, the UK will no longer be obliged to apply the EEA-based exhaustion of rights provision. It will be up to the UK to decide whether or not to apply any kind of exhaustion of rights beyond the territory of the UK, and what scope that exhaustion will have: it could decide to introduce broader freedoms and introduce an international exhaustion of rights, or it could decide to narrow exhaustion of rights to apply to the UK only.

What should you be thinking about now?

• Recent/future trade mark and design filings – for new trade marks and designs, consider filing applications now in the UK along with EU applications. For EU trade marks and designs filed within the last six months, consider filing new UK applications claiming priority from the EU applications. There will be options down the line to convert any EU trade marks and designs into UK rights, but the processes are not yet settled and there will be costs and administration associated with the conversion process that can be avoided by filing UK rights immediately.
• Plan and budget for converting trade mark and design filings – whatever the process for converting EU trade mark and design rights into UK rights, there will most likely be options to apply for the conversion process before the actual exit of the UK from the EU, so as to ensure there is no break in protection. For older registrations, it is worth considering sooner rather than later which EU registrations should be converted into UK registrations when the time comes. It will also be important to budget for this conversion process, and longer term to budget for additional renewals of UK rights.
• Trade mark use in the UK – For trade marks where a UK conversion will be necessary, but there is no current use of the mark in the UK, consider taking steps now to establish use.
• Agreements – for future IP agreements, when setting out territorial scope the UK will now need to be specified separately from the EU. Where agreements previously might have stated ‘Europe’, care should be taken to clarify whether this means only the EU, or whether the UK and other territories are to be included in the territorial scope.

Keep up to date with developments on IPcopy.