Brexit, consequences on Intellectual Property

Brexit, consequences on Intellectual Property

  • 01/07/2016

Undoubtedly, one of the most striking news in recent weeks has been the so-called “Brexit” or “British exit”, a term inspired by the predecessor “Grexit”, which was used in Greece as its also attempt to leave the European Union in 2015.

Although initially the issue of UK departure is political and economic, the implications that this movement will have will reach many more areas, not only threatening the positions of the United Kingdom with respect to e-commerce and the Internet, but it could also affect the industrial and intellectual property sector, especially when a large number of multinationals have used the UK as a gateway to Europe in order to market their products and services.

Intellectual and Industrial Property of countries belonging to the European Union share and are directly affected by such figures as the European Patent, the European Union Trademark, the Community design and the domain name “.eu” without forgetting the complexity that the processes like Supplementary Protection Certificate (SPC) have or the Intellectual Property directives, as well as the transposition of the Directive on Trade Secret or the same Unitary Patent.

In principle, the departure of the United Kingdom from the European Union should not affect the membership of this country to the European Patent Convention (European Patent), nor should be affected UK national figures based or influenced in European directives – although in the long-term, problems could arise depending on the guidelines that the European Union (EU) could follow -. As for the figures like European Union Trademarks, the Community design or the Community Register of Plant Variety could not continue in the EU if a transition for them is not established, aspects that we will deal in more detail below.

With regard to the European Union Trademarks remark that, because of its purely unitary character cannot be split by country, it would imply that, after the withdrawal of the UK from the EU, the new trademark applicants who would like to enjoy protection they should make two records: one in the UK and another one in the EU (British national Office and the EUIPO). Something similar would happen with the holders of EU Trademarks, which could well stop having effects in the UK after the abandonment by the application of Regulation 207/2009, unless the UK implement some type of domestic legislation to determine the granted and in force European Union Trademarks regime. Here may arise questions like:  Will European Union Trademarks automatically become national trademarks while maintaining the priority date of the EUTM registration or will it be necessary to do some kind of specific process? How will the actual use of the European Union Trademarks be proved in order to avoid the expiration of the Trademark or in case of opposition against third parties?,  Will such use still be considered real and effective in the UK? How will it affect the course of exhaustion of trademark rights that currently occurs with effect in the European Economic Area, hereinafter EEA?

At this moment, there are many unknowns and there are only few answers because currently there is not a design of legal instruments that allow us to be certain about the course of events that will take place over the next few years, a period in which the withdrawal of the United Kingdom from the European Union will materialize.

Regarding the Community design, it must simply be added that, as European Union Trademarks, it also confers a unitary right so as mentioned above it would also be applicable for Community designs.

Finally and regarding European Patents, it is important to dwell a little more in order to explain the effects. In principle, as United Kingdom will continue appear as a signatory party to the Munich Convention on the European Patent, European Patent applicants will not have yet any problem to validate a European Patent in the UK. Since the European patent does not grant a unitary right unlike the other cases, the application procedure and grant is unified after being granted by the EPO requiring the patentee to rule on which of the signatory countries of the Convention wants protection (this means that for each country where protection is wanted, it will be necessary to perform the relevant formalities which may be required such as payment of fees, for example).

The only obstacle that could cause the Brexit movement is that somehow it paralyzes the process of creating the right of a unitary patent (the entry into force was planned for 2017), which has not yet been implemented, but the goal is that the patent get the same status valid throughout the Union, as enjoyed by EU Trademarks and Community designs. That being said, the UK has again a new problem pending to be decided regarding whether to continue with the agreement of the Unified Patent Court (UPC) or not.

Be advised as well that, in case that supplementary protection certificates were governed by a European regulation, would cease to have effect in the UK and would remain pending for a new national regime. It remains to see if the permanent abandonment of the UK from EU also implies the abandonment of the EEA.

In the best case, after Brexit, the European Union and the United Kingdom could contract a kind of free trade agreement producing an accession to the European Economic Area, as happened with Norway. In other words, the United Kingdom should harmonize legislation within the framework of the free movement of persons, goods, services and capital, and to recognize the sovereignty of European legislation in relation to these areas, in order to continue maintaining the advantages of the common internal market.

On the other hand, although the Trademark European Union Regulation, regulates the enlargement of the Community as a result of the incorporation of new states as members, is not covered -in the last change made recently by Regulation (EU) 2015/2424 of the European Parliament and the Council and that has entered into force recently- the possibility of abandonment of any State and the consequences that this situation could entail.

In principle, the Brexit would not leave without effects the sector of intellectual property and copyright, while the output would mean for this matter a non-submission to the decisions on Intellectual Property of the European Union Court (CJEU) from the United Kindgom, which means that this harmonization effort that the CJEU has been doing for years would not be guaranteed and would be a risk in the construction of certain terms. The same uncertainty is also the same in the case of digital products and services in the EU, i.e., figures such as electronic commerce, data protection may follow very different paths that have recently been developed.

In conclusion, it is likely that, the agreement governing the departure of the United Kingdom from the European Union, exploits and regulate how to proceed regarding the rights of Industrial Property Unit of trademarks, designs and patents origin. What is clear is that European trademarks and designs managed by EUIPO, would cease to have effect in UK so that the owners of them would lose the extent of territorial protection in this State. Ergo, all British, Spanish and anywhere in the world companies that have its mark protected in the UK by a European Union trademark would no longer have it protected, also the United Kingdom departure from the European Union would entail the involvement of all treaties ratified, including the Maastricht Treaty and the Treaty on the Functioning of the European Union and quashed the provisions relating to the creation of titles of the Union in order to protect the rights of intellectual property. Now, as we advanced, it is likely that the UK establishes a procedure of re-registration of EU trademarks and designs in the UK, which is expected not being too expensive.

While it is expected that in the hypothetical abandonment agreement of the Union is collected the process in detail that will include provisions for extensions of rights protection, priority registration, etc., in order to provide the maximum legal certainty to the owners of such trademark rights, it is certain that there is any forethought circumstance that generates an undeniable instability today.

In response, European Union Trademark owners and applicants for new European Union Design should consider following different alternatives:

  1. Continue to apply the same protection standards in the confidence that, as part of the agreements governing the departure of the United Kingdom from the European Union, is contemplated: either an immediate European Union trademark recognition in its territory or rather the ability to validate -through a relatively automatic administrative procedure- European Union Trademarks on its territory.
  2. Apply preventive policies so that Trademarks that are requested or trademarks that are registered from now on in the European Union be also registered in the UK independently avoiding any risk either through direct protection in the Intellectual Property Office or through the Protocol Trademark.

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