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BREXIT | WHERE ARE WE NOW?

The UK remains divided over the issue of Brexit, in the wake of the UK Prime Minister’s resignation and the outcome of EU parliamentary elections.

The default position in law is that the UK will leave the EU on 31 October 2019, if not before, unless a further extension of time is agreed with the remaining EU 27 Member States – or Article 50 is revoked altogether.

The Prime Minister has confirmed she will step down on 7 June 2019, and the Conservative Party is now set to elect a new leader over the course of the next few weeks.  The majority of leadership candidates have expressed an intention to renegotiate the Withdrawal Agreement, brokered last year between Mrs May and the EU, with some indicating that the UK should leave without a deal at the end of October, if the current draft terms cannot be improved.

Bearing this in mind, the risk that the UK will leave the world’s biggest trading bloc without a deal has arguably increased, particularly following the EU election results, in which the Brexit Party – strongly in favour of a “no-deal” Brexit – secured the largest share of UK votes.

At the same time, the chances that Brexit will not happen and the UK will stay in the EU also appear to have risen substantially. Political parties strongly in favour of remaining in the EU collectively received the largest proportion of UK votes in the EU elections, and prominent politicians are increasingly calling for a second referendum or “People’s Vote” to break the impasse in Parliament.

IMPACT ON INTELLECTUAL PROPERTY 

Fortunately, for rights holders and practitioners alike, Brexit’s impact on intellectual property is much more predictable, whether the UK leaves the EU without a deal or on the basis of (an amended form of) the Withdrawal Agreement. Even if critical terms of the Withdrawal Agreement are reworked, it is not anticipated that changes are likely to affect the provisions on IP rights substantively.

We summarise below the position in relation to key IP rights as matters stand.

EU Trade Marks (EUTMs) & Registered Community Designs (RCDs)

After Brexit, UK nationals and businesses will still be able to own and file EUTMs and RCDs but these rights will no longer cover the UK.

If the UK leaves without a deal, EUTMs and RCDs will cease to have effect in the UK on exit day. If a form of the Withdrawal Agreement is ratified, there is expected to be a transition period, keeping the UK in the EUTM and RCD systems until at least the end of 2020; during this time, EUTMs and RCDs will continue to be recognised and enforced in the UK courts.

EUTM and RCD registrations will be cloned into comparable UK registrations – either on exit day, or at the end of the transition period, as applicable. These comparable registrations will retain the same filing, priority and/ or seniority dates as the corresponding EU rights. The process will be automatic and without cost. 

Pending EUTMs and RCDs will not automatically be cloned; applicants will have 9 months – either from exit, or from the end of the transition period, as applicable – to file new UK national applications, in order to retain the same filing, priority and/ or seniority dates. The usual official fees will apply and applications will need to go through the UKIPO’s examination process.

Comparable UK rights will be wholly independent of, and capable of being assigned separately from, the corresponding EU rights.

Unregistered Community Design (UCD) Rights 

UCD rights protect designs first disclosed in the EU for a period of 3 years of being made available to the public.

Under the terms of the draft Withdrawal Agreement, UCD rights already in existence at the end of the transition period will automatically give rise to equivalent UK rights of at least the same duration.

In a no-deal scenario, UCD rights already in existence on exit day will automatically give rise to equivalent UK rights of at least the same duration.

After Brexit, UK nationals and businesses will still be able to benefit from UCD protection, but only if the designs in question were first made available in the EU.

In a no-deal scenario, the UK government has drafted legislation for the creation of a new UK Supplementary Unregistered Design right, providing protection for designs first disclosed in the UK (and a limited number of other “qualifying countries”) after exit. Note that “qualifying countries” do not include the remaining EU 27 member states.

Patents

European patents are not affected by Brexit. The UK remains a signatory of the European Patent Convention (EPC), which is not governed by EU law. A number of countries from outside the EU (such as Norway and Switzerland) are already members of the EPC. 

The pan-European Unitary Patent System has been postponed, but the UK government is working to try to ensure the UK’s participation if / when the system comes into effect.

Supplementary Protection Certificates

Supplementary protection certificates (SPCs) are national rights which are granted by the UK Intellectual Property Office. However, the underlying legislation is an EU regulation.

The UK government is aiming to preserve the status quo where possible. Current guidance from the UK governments states that even in the case of a no-deal Brexit, the existing systems will remain in place, operating independently from the EU regime, with all the current conditions and requirements.

Nonetheless, in practice there may be some changes, especially for new SPC applications – draft UK legislation suggests that there may need to be a granted UK marketing authorisation (as opposed to an EEA marketing authorisation under the existing system) before an SPC can be granted in the UK.

Plant Variety Rights

New plant varieties that are distinct, uniform and stable may be protected in the U.K., either at a national level, through the UK Plant Variety Rights Office (PVRO), or on a regional level through the Community Plant Variety Office (CPVO).  The CPVO, which is an agency of the European Union, currently grants a single, unitary Community Plant Variety Right (CPVR) covering all 28 member nations of the EU.  A plant variety can only be protected through either a national right or a regional right and cannot receive dual protection in the same territory.

In short, if the U.K. leaves the EU without a deal, CPVRs will no longer cover the UK.  Plant breeders will then need to make two applications to gain the same coverage across the 28 EU member states currently covered by a single CPVR:

(1)      one application for protection in the UK, by applying to the UK PVRO; and

(2)      one application for protection in the remaining 27 EU member states by applying to the CPVO. 

Pending applications for a CPVR will be treated as follows:

(1)      CPVRs granted 2 months or more before the UK leaves the EU with no deal will be protected under UK law, becoming UK rights; or

(2)      for CPVRs that have not been granted at least 2 months before the UK leaves the EU with no deal, an application must be made to the UK PVRO to protect the variety in the UK.

For more detailed guidance, see the following published by the Department for Environment, Food and Rural Affairs (DEFRA): https://www.gov.uk/guidance/plant-variety-rights-and-marketing-plant-reproductive-material-if-the-uk-leaves-the-eu-without-a-deal.

RECOMMENDATIONS

Whilst the UK remains a full member of the EU, business here in the IP field continues very much as usual. However, anyone beginning a new trade mark or design filing programme, or involved in contentious proceedings at the EUIPO, should note our recommendations below:

Trade Marks

We now advise dual filing new trade marks in the UK as well as at EU level, where key brands are at stake or if conflict is anticipated in the UK, to maximise the chances of having enforceable UK trade mark rights on exit day. This is because an EUTM normally takes around 5 months to register, or indeed longer if objections or oppositions are encountered.

We recommend reviewing on-going EU trade mark opposition and cancellation proceedings, especially those based solely on UK rights. Such UK rights may not pose valid bases for opposition or cancellation after exit – particularly in a no-deal scenario. Parties may wish to take steps to expedite or slow down the proceedings, for tactical reasons.

Designs

Unless key designs are at stake, we are not routinely recommending the dual filing of UK design applications along with RCDs. This is because an RCD may register in as little as 24 hours, where no objections are raised by the EUIPO. This advice may change as 31 October 2019 approaches, in the absence of a withdrawal agreement being approved. 

Where there is a question over the registrability of a design, or objections may be foreseen, filing simultaneously in the UK and at EU level can be advantageous. We recommend a discussion is had, on a case by case basis, with your usual Greaves Brewster contact prior to filing.

Greaves Brewster continues to follow the ongoing political and legal developments in the UK as they unfold, and will ensure our clients are kept fully updated on the practical implications of any changes impacting IP rights on our records. 

This update is for general information and does not constitute legal advice. If you have any questions regarding these issues, or on a particular case, please get in touch with your usual Greaves Brewster contact.