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The impact on IP if the UK leaves the EU

November 10th, 2015 by IPKM blog

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The referendum on whether the UK shall exit or remain as part of the EU will take place within the next two years.[1] Britain leaving the EU will have no effect on IP rights granted by the UKIPO.

The EPO is not an EU institution. As per Article 2(2) EPC a European patent granted by the EPO has the same effect and is subject to the same conditions as a national patent, in which State it is sought registration for. If and when the UK leaves the EU, it may still be signatory to the EPO, and therefore applicants from the UK can apply for patents in the Member States of the EPO; much like other non-EU (but EPO) Member States, such as Albania, Norway and Switzerland. As long as the UK remains signatory to the EPO, nothing here changes.

In relation to the moving forward of a Unitary Patent, it is believed the process will slow down further if the UK were to exit.[2] The Unitary Patent will be one single patent valid for all countries signatory to the treaty, as opposed to having multiple national patents as currently. However, the treaty can only come into effect if the agreement is ratified by the UK, France and Germany, and a minimum of ten other EU countries.[3] There would also be the benefit of Unitary Patent Courts which will have jurisdiction over all Member States that sign the treaty. It is planned that one court will be situation in London, which will have to be re-examined and located elsewhere. There are likely to be delays in the ratification and thus implementation of the Unitary Patent, due to the uncertainty over the UK’s continued membership. If the UK stays put, then ratification of the agreement should follow. If not, then the UK will be replaced by ratification by the Netherlands, and the commencement will nonetheless continue.[4]

An exit would require amendment of Patent Act 1977 or even a new act, so that Supplementary Protection Certificates (SPC) for medicine and plant protection continue to apply in the UK (currently governed by EU regulations). SPC are highly important to UK based inventors, so there will need to be a transitional provision so that current SPC do not suddenly cease to have effect in the UK.[5]

Community Trade Marks (CTM) and Community Registered Designs (CRD) are obtained through OHIM. The only time an applicant would need to file for a UK national right is if they are unlikely to obtain a CTM or CRD, or have already failed in trying to achieve the same. Otherwise, CTM and CRD are the most practical. However, the Community Trademark Regulation 207/2009 and Community Designs Regulation 6/2002 contain no provision for a country leaving the EU.

If the UK exits, then registration at the UKIPO will be necessary. If a UK applicant does business in more than one EU country then it may apply for Community rights through OHIM.[6] What would happen to current CTM and CRD? It is presumed that a system would be established so that the same could be converted at least into UK national trade marks and design registrations.[7]

It would be more advantageous for IP right holders for the UK to remain in the EU. An exit would mean separate national trade mark and design registrations, for some UK right holders who only have Community rights, and for external right holders where their CTM and CRD would no longer reach the UK. This would obviously be a costly matter. Even though UKIPO received a 14% decrease in the number of international applications between 2013 and 2014 (this is believed to be because of filing with OHIM),[8] at the point when an exit is announced, it can be expected that UKIPO will have a huge workload and burden. It would be best if companies in the very near future are mindful about applying through OHIM of the upcoming referendum, as they may soon need to register in the UK as well as the EU;[9] it would be better if these applications happened progressively instead of suddenly in 2017. However, it is understandable that right holders would want to wait to file for UK protection, in case the UK does not exit the EU and therefore filing may actually be a waste of time and resources.

It is believed that an exit would raise the issue of exhaustion of rights.[10] Article 13(1) Community Trademark Regulation states that CTM shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Community by the proprietor or with his consent. IP rights in goods placed on the UK market would not be exhausted and so parallel trade into and out of the UK could decline; the UK wouldn’t be subject to the EU’s principle of free movement of goods. Furthermore, if international exhaustion were applied right holders wouldn’t be able to prevent parallel imports of products.[11]

UK judges have in the past had a rather blasé approach to competition in the realm of IP.[12] One issue with the UK courts is that on references to the CJEU judges haven’t always liked to take account of what was advised, even as a member of the EU. Taking the Arsenal[13] case as an example, the CJEU stated that if consumers take the (potentially) infringing articles away from the stadium there can be confusion as to origin; but the UK court didn’t like the CJEU delving into the facts of the case and decided otherwise (before being reversed on appeal). If the UK exits, courts will no longer refer matters. Even though they may follow precedents, they hadn’t so far so it’s probably unlikely they will after. This will cause less certainty and less harmonisation, which is jeopardising to right holders across the EU.

By Monica Ezsias

 

[1] The Guardian, ‘What would happen if Britain left the EU?’ (19 Apr 2015) <http://www.theguardian.com/politics/2015/apr/19/what-would-happen-if-britain-left-the-eu-consequences-of-exit> (accessed 07 Nov 2015)

[2] Adamson-Jones, ‘Brexit: What would it mean for UK IP rights?’ (27 Oct 2015) <https://www.adamson-jones.co.uk/blog/brexit-what-would-it-mean-for-uk-ip-rights> (accessed 8 Nov 2015)

[3] EPO, Unitary patent <https://www.epo.org/law-practice/unitary/unitary-patent.html> (accessed 8 Nov 2015)

[4] Adamson-Jones (n 2)

[5] Reddie & Grose, ‘Brexit – what could this mean for intellectual property?’ (31 Jul 2015) <http://www.reddie.co.uk/news-and-resources/ip-developments/brexit-what-could-this-mean-for-intellectual-property> (accessed 8 Nov 2015)

[6] OHIM, Trade marks in the EU <https://oami.europa.eu/ohimportal/en/trade-marks-in-the-european-union > (accessed 8 Nov 2015)

[7] Adamson-Jones (n 2)

[8] World Trademark Review, ‘The UK’s top trademark filers revealed, as numbers rocket’ (9 Jun 2015) <http://www.worldtrademarkreview.com/Blog/detail.aspx?g=7b73cddc-7be8-41e7-bd14-5dcaf2e32efe> (accessed 7 Nov 2015)

[9] Ibid

[10] World Trademark Review, ‘What a Brexit would mean for UK and EU trademark law’ <http://www.worldtrademarkreview.com/Magazine/Issue/57/Features/What-a-Brexit-would-mean-for-UK-and-EU-trademark-law> (accessed 8 Nov 2015)

[11] Ibid

[12] See, for instance: Elizabeth Florence Emanuel v Continental Shelf 128 Ltd [2006] 56 ETMR 750

[13] Arsenal Football Club plc v Reed [2003] ETMR 19

One thought on “The impact on IP if the UK leaves the EU

  1. Pingback: IP and IT implications of a Brexit vote | Andres Guadamuz

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