October 4, 2018

The government has published a series of technical notices setting out its position on a range of topics in the event that the UK leaves the EU without an agreement. On 24 September, it published the relevant notices covering intellectual property, the key points of which are covered in this article. The full technical notices are available online at the following links:

• trade marks and designs
• patents
• copyright
• exhaustion of intellectual property rights
• protecting geographical food and drink names

The notices say that a ‘no deal’ scenario is highly unlikely, but that it is necessary to publish the information to enable businesses and citizens to be prepared. This note follows our previous articles published on 5 March 2018 and 21 March 2018, covering the European Commission’s draft Withdrawal Agreement and the updated text published following negotiations with the UK Government. The IPO has since then published a news story on 2 August and updated on 25 September 2018, called IP and BREXIT: The facts, which summarises the Government’s latest position regarding intellectual property in the light of Brexit, in which it seeks to reassure businesses and organisations that, whether or not there is a deal in place when the UK leaves the EU, the government will aim to ensure continuity of IP protection so that existing EU rights continue to have protection in the UK as far as possible.

Trade marks and designs

• Proprietors of existing registered EU trade marks and Community designs will be granted an equivalent UK trade mark or registered design after 29 March 2019. The notice states that this UK right will be provided with “minimal administrative burden” and that it will be possible to opt out, but does not explicitly say whether there will be a fee. However, it is difficult to see how a fee (or any substantive administrative requirement to convert your trade mark) would be consistent with an opt-out system.
• Proprietors of pending applications for EU trade mark and registered Community design applications will have a period of nine months following the UK’s exit from the EU to re-file an application with the UK IPO for the same right in the UK, retaining the priority date claimed in the equivalent EU application. This means that applicants will need to pay the normal UK application fees if their application is pending at the date the UK leaves the EU. It is therefore likely that many EUTM applicants who would like protection in the UK will choose to file their applications both at the EUIPO and UKIPO in the run up to March 2019.
• For trade marks and designs filed through the Madrid and Hague systems which designate the EU there is no clear position yet, save that the UK government is working to provide continued protection in the UK from March 2019 onwards for these rights, including practical solutions for pending applications.
• Unregistered Community designs which exist at the date the UK leaves the EU will automatically continue to be protected and enforceable in the UK for the remaining period of their three-year term.
• Furthermore, the UK will create a new ‘supplementary’ unregistered design right which mirrors the characteristics of the unregistered Community design. This will require new legislation to be introduced, although it is questionable whether this can be completed in time for March 2019. The name of this new right is a reminder that it will exist alongside any unregistered design right that would already arise in the UK under the Copyright, Designs and Patents Act 1988.

Patents

• The EU legislation or its domestic equivalent relating to patents will be retained under UK law when the UK leaves the EU. This includes EU laws relating to biotechnology patents and applications, compulsory licensing of patents relating to the manufacture of a patented medicine for export to a country with public health problems, and infringement exceptions relating to the testing of pharmaceutical products.
• EU law on Supplementary Protection Certificates will be retained in UK law to create a UK supplementary protection certificate regime.
• European patents will continue as normal. Businesses will still be able to apply to the European Patent Office (“EPO”) for patents covering the UK and other participating countries, and existing European patents will be unaffected. This is because the EPO is a non-EU institution governed by the European Patent Convention. The same applies to national UK patents and patent applications, which will continue as normal.
• The key area of uncertainty is the Unitary Patent and Unified Patent Court (“UPC”). If the Unified Patent Court Agreement is fully ratified, the IPO has made it clear that the UK will seek to stay in the Unified Patent Court and system, even in a ‘no deal’ scenario. However, the notice acknowledges that if this is not possible, then unitary patents will not cover the UK. Instead, the government has said that in a ‘no deal’ scenario where the UK is also unable to stay in the Unitary Patent Court, it will ensure that any existing unitary patents will give rise to equivalent UK patent protection.

Copyright

• The main international copyright treaties (e.g. TRIPs, WCT and Berne) to which the UK and EU member states are party operate independently of the UK’s membership in the EU. As a result, whether there is a Brexit deal or not, the principle of ‘national treatment’ (enshrined in the Berne Convention and other treaties) requires that authors of works originating in one of the Berne Union countries enjoy the same protection for their works as authors in each of the other Berne Union countries. It is worth noting that national treatment under related right treaties may not be as far-reaching as under Berne. Moreover, there are no related right treaties for audiovisual producers and broadcasters.
• After March 2019, the EU Directives and Regulations on copyright and related rights will be preserved in UK law. The government has said they will make adjustments to ensure that the retained law can operate effectively.
• Whilst not addressed in the notice, it is relevant to note that, pursuant to section 6 of the European Union (Withdrawal) Act 2018, UK courts and tribunals will not be bound by any principles laid down or any decisions made on or after exit day by the CJEU, and will not be able to refer any matter to the CJEU after that day. Further, the Act states that UK courts will not have to pay any heed to decisions made by the CJEU after the UK has left the EU, but “may have regard to anything done on or after exit day by [the CJEU] … so far as it is relevant to any matter before the court or tribunal“. The UK Supreme Court will not be strictly bound by any retained CJEU case law after exit day. In deciding whether to depart from previous CJEU decisions, the Supreme Court will give CJEU decisions the same status as its own prior decisions.
• The key change would be in the context of EU cross-border mechanisms, which only apply to member states of the EU or EEA. In the event of a no deal Brexit, the UK would not be a member state of either the EU or the EEA, so the UK’s position with regard to these benefits and protections would change dramatically. The government’s position is summarised below:
• Sui generis database right: Currently, nationals, residents and businesses of EEA member states are eligible for database rights in all EEA member states. In the event of a ‘no deal’ Brexit, EEA member states will not be obliged to provide database rights to UK businesses and UK owners of UK database rights may not be able to enforce their rights in the EEA. The guidance suggests “UK owners may want to consider relying on other forms of protection (e.g. restrictive licensing agreements or copyright where applicable) for their databases“.
• Portability of online content services: The current laws allow consumers to access their online content services (such as Netflix) when they are temporarily in another EU member state, for example when on holiday. The guidance confirms that the Portability Regulation will cease to apply to UK nationals when they travel to the EU. This means that UK consumers’ access to their online content service subscriptions may be restricted when they temporarily visit the EU. By the same token, EU consumers will not be able to access their home subscriptions when they visit the UK.
• Country-of-origin principle for copyright clearance in satellite broadcasting: This principle simplifies the clearance of rights for cross-boarder satellite broadcasting. A ‘no deal’ Brexit would mean that UK-based satellite broadcasters that currently rely on the country-of-origin copyright clearance rule when broadcasting into the EEA may instead need to clear copyright in each member state. However, the converse does not appear to be the case for foreign satellite broadcasters subject to certain safeguards.
• Orphan works: The orphan works copyright exception enables cultural heritage institutions established in the EEA to digitise orphan works (works with unknown owners) and make them available online throughout the EEA. In a ‘no deal’ scenario, this exception may no longer be available to UK–based Cultural Heritage Institutes, and the guidance suggests they may need to remove works from their websites or consider limiting access in the EEA. The UK however does have its own scheme.
• Collective management of music authors’ rights: UK Collective Management Organisations (“CMOs”) – bodies that manage the collective licensing of copyright works on behalf of right holders) would not be able to mandate EEA CMOs to provide multi-territorial licensing of the online rights in their musical works, as is the current position, in the event of a ‘no deal’ Brexit. The guidance suggests that UK CMOs that currently rely on this right should implement new contractual arrangements to ensure the continued existence of such arrangements.
• Cross-border transfer of accessible format copies of copyright works: Currently, accessible format (e.g. Braille) copies of copyright works can be transferred cross-border between EU member states and other countries that have ratified the WIPO Marrakesh Treaty. The guidance states that the UK intends to ratify the Marrakesh Treaty after exit but ratification will not have taken place before 29 March 2019. Therefore, between exit and the point of ratification, it may not be possible to rely on the EU Regulation when transferring accessible format copies between the EU and UK.

Exhaustion

• The European Economic Area (EEA) exhaustion scheme currently means that once a product, a work or other protected subject matter is placed on the market in the EEA with the rights holder’s permission, that rights holder’s IP rights are exhausted throughout the EEA for that product. The UK government has stated that it intends to continue to recognise EEA exhaustion after March 2019 in a ‘no deal’ scenario. This means there will be no change to the rules relating to imports of products from the EEA to the UK, so rights holders will not be in a position to object to parallel imports of goods from EEA countries into the UK. The UK Government observes in the ‘no deal’ notice on exhaustion that “there may however be restrictions on the parallel import of goods from the UK to the EEA.” Indeed, under the current regime, which the UK Government has no power to change, rights holders are entitled to prevent the parallel importation of goods from outside the EEA into any EEA member state. So in a ‘no deal’ Brexit, they will be in a position to object to parallel importation of goods from the UK into EEA countries after March 2019.
• It is questionable whether such a ‘one-way’ exhaustion plan is permissible underWorld Trade Organisation (“WTO”) rules, as it would arguably favour the EEA countries over other third countries outside the EEA without justification.

Protecting geographical food and drink names

• A new UK geographical indication (“GI”) system will be created after 29 March 2019, which will largely mirror the current EU regime, with more detail expected to follow in early 2019. All 86 UK GIs currently protected at EU level will be given automatic protection under this regime. However, EU GIs would need to apply for new UK GI status, with the exception of Irish Whiskey, Irish Cream and Irish Poteen, which will automatically continue to be protected in the UK (as well as the EU).
• A new UK logo for GI productswill need to be used, whether or not the Withdrawal Agreement is agreed. Producers will need to comply with the rules relating to this UK logo, which will be the subject of further consultation.
• It is expected that UK GIs will continue to be protected by the EU’s GI schemes. However, if this is not agreed, UK producers will need to re-apply for GI status as a ‘third country’ producer.

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