A 'no deal' Brexit and IP protection

Over 70% of a company’s net worth is related to intellectual property, as the impact of Brexit remains uncertain businesses need to prepare for the implications of Brexit on their IP rights, to ensure they are fully prepared when the UK becomes a third country.  

EU registered trademarks and designs will remain valid in the remaining 27 EU member states. All EU registered trademarks or registered community designs will have a new UK equivalent trademark or design granted when Brexit is implemented.

The new UK trademark or design will have the same effect as if the trademark or design was registered under UK law. Therefore, the new UK trademark or design will be subject to a separate UK renewal date and renewal fee and, as a new distinct IP right, it may be assigned and licensed separately from the current EU trademark or community design.

EU trademark and community design applications

On the date that we exit the EU, if a business has a pending EU trade mark application or community design application, for nine months (from the date of exit) it will be able to refile a UK trademark  or design application, retaining the original date from when the EU application was filed.

The UKIPO will acknowledge the EU filing date and any claim to earlier priority.  However, businesses would need to pay the applicable UKIPO fees for the refiled UK trademark or design. Businesses will still be able to apply for an EU trademark or community design after Brexit.  It is important that businesses are advised to refile UK trademark or designs within 9 months of the exit date.

The protection afforded to unregistered design rights, which arises automatically once the design has been recorded or an article has been produced, differs between the UK and EU. 

In the UK, the unregistered design protects the shape or configuration of the whole/part of an article, whereas, the EU unregistered design extends the protection to encompass the appearance (surface decoration) of the whole/part of the product. While the EU unregistered design protection is wider in its application, the scope of the protection is limited to three years after the design was first made available to the public within the EEA. In the UK, the design protection does not encompass surface decoration, however, protection is granted for up to 15 years.

The UK government has stated that it will ensure that all unregistered community designs in place at the time of Brexit will continue to be protected within the UK for the remainder of the design right.  The UK will also create a new unregistered design right in the UK to mirror the rights afforded by unregistered community designs, known as the supplementary unregistered design right.

Copywrite and patents

Within the UK, copyright and related rights are governed by the Copyright, Designs and Patents Act 1988 (the CDPA). Copyright subsists in literary, dramatic, musical, artistic works, films, sound recordings, broadcasts and published editions, encompassing, databases, computer programs (source code), drawings, photographs and works of artistic craftsmanship.  Copyright arises automatically (subject to certain conditions) with no registration or fees to pay and is a national right which is harmonised internationally by numerous treaties. Therefore, after Brexit any UK and EU copyright protected works will remain protected due to the international treaties that govern copyright, which are not dependent on our membership of the EU.

‘Sui Generis’ (unique) database rights were introduced by the EU and implemented into UK law (via the Copyright and Rights in Databases Regulations 1997), which protects databases in the same way as the CDPA, however, the scope of protection is broader as protection arises if a business has qualitatively or quantitatively made a substantial investment to obtain, verify or present a database (created by a national of the EEA).  However, the sui generis database protection is limited to a period of 15 years. 

Post Brexit the sui generis rights currently recognised will continue to be recognised in the UK, however, the creation of any new databases with not be protected by this right. Businesses may wish to seek alternative legal protection via amendment of their current licensing agreements.

Patents encompassing the UK are granted by the UK Intellectual Property Office (UKIPO) and the European Patent Office (EPO).  The EPO is subject to the European Patent Convention, not the UK’s membership of the EU. It will remain possible to file patents at the EPO, designating applicable territories. Therefore, Brexit will have no effect regarding an ‘EU’ patent (application or registration).

The UK government has confirmed that all EU legislation relevant to patents and supplementary protection certificates (where the EU provides an additional period of protection or patents relating to pharmaceutical and agrochemicals) will remain in UK law.

However, it is highly likely that Brexit will impact on the implementation of the proposed (EU) unitary patent and the Unified Patent Court in London.

Parallel goods are genuine goods manufactured or held under a licence by the rights holder, which are sold by the rights holder. At present, you exhaust your intellectual property rights once your IP protected goods are placed on the market within the EEA.

Post Brexit, UK IP rights holders will not be able to prevent the import of parallel goods from the EEA.  Whereas, EEA IP rights holders will be able to prevent the import of parallel goods from the UK into the EEA. Even though the goods would have been placed on the market in the UK, thus exhausted, post Brexit this will not be considered exhaustion in the EEA.

EU regulation 608/2013 establishes the rules and procedures allowing EU customs authorities to enforce IP rights at the EU border, via an Application for Action (AFA). The AFA would allow the applicable customs authorities to seize, and if authorised, destroy counterfeit goods at the EU border.

If a business has a national UK right (UK registered trademark), it would file a national AFA, if it has a union right, for example an EU registered trademark, it would file a union AFA. Post Brexit, it will no longer be possible to submit either a national or union AFA to UK customs.  In addition, any previously UK filed AFA’s will no longer be valid within the EU. For a union AFA to remain valid post Brexit, businesses would need to refile the AFA in one of the remaining 27 member states.

What should businesses be doing now:

• Review the current status of EU trademark and design applications;
• Review licence agreements;
• Review all current agreements to ensure they are Brexit proof;
• Refile a Union AFA.

What should businesses be doing post Brexit

• Refile UK trademark and design applications;
• Ensure there is no breach of any licensing agreements regarding parallel imports.

Karen Holden is founder and Christine Zembrzuski is an IP specialist at A City Law Firm