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Expert opinion: How will Brexit affect intellectual property laws?

Written by Stephen Welfare on .

Stephen WelfareStephen WelfareBack in 2016, the referendum result caused many businesses to be concerned about their European Community Registered Intellectual Property Rights.

A year and a half on, and with negotiations between the UK Government and the EU moving along at a pace considerably slower than a skeletal sled, has any progress been made and is anything more certain?

The importance of intellectual property to the UK economy cannot be overstated.

In 2014, UK businesses invested an estimated £133Bn in knowledge assets, compared to £121Bn in tangible assets.

The UK’s total annual investment in IP rights is more than four percent of the UK’s gross domestic product.

The UK economy includes successful businesses who operate internationally for whom IP protection and exploitation is highly important.

Pan European IP rights are common, and the licensing of such rights is often done on an inclusive basis.

The UK is a strong provider of IP services, be it protection and/or enforcement in the UK’s designated IP Courts, or by commercialisation so that the UK Government has to have regard to IP in the Brexit talks.

In December last year, the main stakeholders in IP law in the UK – the Law Society, the Intellectual Property Bar, Chartered Institute of Patent Attorneys, Chartered Institute of Trade Mark Attorneys and the UK IP Federation – submitted a paper to the UK Government of requests for action in the field of Intellectual Property within the Brexit talks.

The key recommendations made to the UK Government are:

1. Continuation of EU derived IP rights. The harmonisation of IP rights across theEU has been of considerable benefit to UK businesses. The Government must make arrangements to make sure these rights and interests are not adversely affected or prejudiced by Brexit, and that there is minimum cost and disruption to the IP system. Specifically:

a. The Government is to seek to negotiate a package of rights to secure the continuation of all existing substantive and procedural Pan European rights and defences to them.

b. If a. is not achievable, the Government should legislate for the automatic continuation in the UK of EU Rights.

It is considered key that negotiations on IP are not held up pending other discussions concerning Brexit.

2. Unitary Patent/Unified Patent Court Agreement. The UK is to be central to the Unified Patent Court with the participation of UK judges and lawyers. The objectives should be:

i. continuation of the Court in London;

ii. continued involvement of UK judges; and

iii. continued rights of participation of legal professionals qualified and based in the UK in all parts of the Court’s procedures on the same terms.

3. Exhaustion of rights. If the current position, whereby a trademark owner places goods on the market under a trade mark anywhere in the EU, it cannot enforce the equivalent UK trade mark against someone who purchases those goods and imports them into the UK, it is to change; then there should be no change during any transition period.

4. Rights of representation. The UK Government should ensure the continued right of representation by UK IP professionals. The rights of UK IP professionals in all EU bodies should continue.

5. Mutual recognition of judgments. The current arrangements under the Rome and Brussels regulations should continue.

Given the complexity of the negotiations and the volume of work involved in dealing with them, a transitional period of several years is universally considered necessary.

In September last year, the European Commission published a position paper that included a ‘wish list’ for transitional arrangements for European IP rights.

IP is a living beast. The law is constantly evolving as it tries to keep pace with the changes in business practice, commerce and the technical revolution.

For example, the EU has recently issued a directive and draft regulations on trade secrets. There is not presently any European law on trade secrets, but in the UK we have a robust and well established legal framework that allows for enforcement of trade secrets in our common law.

The UK Intellectual Property Office (IPO) has launched a technical consultation seeking views on the approach to be taken in the regulations.

So for as long as the UK is a member of the EU, it will and must continue to play an active role in the making of EU law, and that will need to continue through any period of transition.

As phase 1 talks about the terms of the UK’s withdrawal are ongoing, according to politico.eu, phase 2 talks have already begun “behind closed doors”. Phase 2 is set to deal with the “technical matters” that will include IP.

We do not know what the Government has been saying to the EU about IP, or indeed if anything at all yet. But, based on the submissions above and from the vast volume of work being undertaken by the UK IPO, we can be sure nothing will be resolved very soon.

Stephen Welfare is a partner in the technology and media and dispute resolution team at Royds Withy King. He is an experienced commercial litigator with a particular specialism in contentious intellectual property law.