Knowledge & News

IP and Brexit Interview

1 October 2019

Partner Graham Burnett-Hall recently gave an interview Lexis PSL - the below article is the result of that interview and was first published by Lexis PSL on 5 September 2019. 

What mechanisms will be put in place in the UK to ensure that the holders of EU trade marks (EUTM), registered Community designs (RCDs) and Community plant variety right (CPVRs) are recognised as the holder of comparable rights in the UK, following a no-deal Brexit? 
 
The Act of Parliament passed in 2018 to effect the UK’s withdrawal from the EU, the European Union (Withdrawal) Act 2018, empowered the government to pass statutory instruments to make consequential amendments to UK law. A number of statutory instruments have now been passed relating to IP. These amend primary legislation relating to trade marks, designs and plant varieties, as well as other IP rights.
 
The effect of these amendments is that EUTMs, RCDs and CPVRs, if in effect immediately before the UK’s departure from the EU, will all be treated as if they had been granted as national UK trade marks, registered designs and plant breeders’ rights under the relevant respective legislation. In each case the creation of these new continuing UK rights will happen automatically.
 
Is it possible to opt out of the scheme? 
 
Yes, proprietors will be able to file opt-out notices in respect of trade marks and design rights that come into being as a result of these automatic provisions.
 
Will right holders have to pay a fee? 
 
No fee will be payable on the creation of these new UK rights. However, renewal fees will be payable as they fall due if proprietors wish the rights to remain in force. As a result, there seems to be little need for proprietors actively to file opt-outs if they are uninterested in maintaining protection in the UK, as the rights that are created automatically will also automatically expire if no renewal fee is paid.
 
Will there be any effect on priority or seniority? 
 
The implementing legislation aims to ensure that there will be no effect on priority or seniority in the UK—the comparable UK rights created will enjoy the same priority and/or seniority that was enjoyed by the Community rights from which they derived.
 
How will genuine use and reputation be assessed for new comparable trade marks? 
 
The need to assess whether genuine use of a registered trade mark has been made can arise when a party seeks to revoke a trade mark for non-use or when a trade mark is being raised as an earlier right by a party opposing the registration of a new trade mark. If no genuine use has been made of the mark for five years, then that mark’s registration is liable to be revoked and an opposition relying on that mark as an earlier right will fail.
 
Where the registered trade mark is a comparable trade mark derived from an EUTM that was in force at the time the UK left the EU, the new legislation provides that, for that proportion of the five-year period that falls before the UK’s departure, genuine use will be assessed by reference to use in the European Union (including the UK) of the corresponding EUTM.

Provision is also made regarding treatment of the reputation of the comparable trade mark, where this has to be considered in the context of registration or enforcement of trade marks. Where the reputation of a comparable trade mark falls to be considered in respect of any time before the UK’s departure from the EU, the relevant reputation will be that of the corresponding EUTM in the EU (including the UK).
 
How will pending proceedings in relation to EUTMs and RCDs be dealt with? 
 
Pending proceedings can continue in the UK courts and the court will have jurisdiction to provide remedies in so far as they affect the UK. However, in a no-deal Brexit scenario, the UK courts will cease to be Community courts and will not be able to grant EU-wide remedies. Proprietors will need to decide whether the potential UK remedies will be sufficient, which for example may well be the case if the defendant is domiciled in the UK, or whether fresh proceedings will need to be commenced in one of the EU27 countries.
 
What will be done to ensure that the supplementary protection certificate (SPC) and paediatric extension systems continue to operate effectively? 
 
Patents are largely unaffected by Brexit. Both national patents granted by the UK Intellectual Property Office (IPO) and European patents granted by the European Patent Office (and validated in the UK) will continue to be in force in the UK. Applications for patent protection will be made exactly as before. It should be noted that the European Patent Office, set up by the European Patent Convention (EPC), is not an EU body and the EPC contracting states include many non-EU countries, such as Norway, Switzerland and Turkey. The UK will just become another non-EU contracting state.
 
Supplementary protection certificates, on the other hand, and although they are national rights, are creatures of EU law and express provision has had to be made to cater for their continued operation in the UK after Brexit, including any extra duration provided for by reason of paediatric extensions. The UK has passed a statutory instrument to provide for this. The aim is to keep the SPC regime, including paediatric extensions, essentially the same as it was before, save for changes that are necessary to reflect the fact that the UK will no longer be in the EU or, as things stand, the European Economic Area (EEA). Importantly, the relevant marketing authorisations to take into account of under the revised SPC legislation are marketing authorisations to place the relevant medicinal product on the market in the United Kingdom. Previously the relevant market was the EEA.
 
Paediatric extensions will in future be governed by UK legislation rather than EU legislation, but with essentially the same effect regarding SPCs, so there are some consequential changes to the SPC legislation to reflect that.
 
How will compulsory patent licences and cross licences function following a no-deal Brexit? 
 
Compulsory licences can be granted where a patent owner is found not to be meeting demand for a patented product in a county and is refusing to grant a licence on reasonable terms to allow that demand to be met. The current compulsory licence regime is a consequence of the Agreement on Trade-Related Aspects of Intellectual Property Rights that forms part of the World Trade Organisation (WTO) regime. This includes a rule that requires any such compulsory licence to be limited to the manufacture in, and for, the relevant country (where the demand is not being met). However, a 2003 WTO decision permits countries to waive this restriction, in particular to allow patent-protected medicines to be exported to countries that need such medicines but are not able to manufacture those medicines themselves.

The EU has given effect to this decision by way of Regulation (EC) No 816/2006 on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems (the Compulsory Licensing Regulation). The UK wishes to continue to give effect to this regulation and to do this, various amendments have been made to the relevant UK legislation. For example, the UK’s ICO is expressly defined as the competent authority for receiving applications for compulsory pharmaceutical licences, with any appeal being to the UK courts, and references to the European Commission have been removed.Regarding cross-licences, UK regulations exist to give effect to an EU directive that provided for cross-licences to be available in circumstances where the exploitation of a patent is being blocked by a Community plant variety right, or vice versa.

Following Brexit these regulations will take effect in amended form but to provide essentially the same remedy. The amendments, for example, take into account that the relevant plant variety right will no longer be the Community plant variety right but the UK plant variety right that will be derived from the Community plant variety right and automatically take effect on Brexit.

What practical steps should the holders of registered IP rights be taking to prepare for a negotiated exit?

If a negotiated Brexit comes to pass and the terms of the UK’s exit follow those of the Withdrawal Agreement that was agreed between Teresa May’s government and the EU (but rejected by the UK Parliament), there will be a transitional period until the end of 2020 during which registered IP rights will continue to take effect and be recognised by the UK and EU27 courts, as if the UK were still a member of the EU. It would follow that, in theory, no immediate action would be needed by holders of registered IP rights. However, the problem is the considerable uncertainty as to whether a negotiated exit will happen and, by the time it might become clear that it will not, it risks being too late to take remedial action.

We at Marks & Clerk have therefore long advised that it would be prudent for IP rights holders to take steps to ensure that at least their key assets are protected, where possible, with UK national rights as well as Community rights.

What practical steps should the holders of registered IP rights be taking to prepare for a no-deal Brexit?

With the risks of no deal mounting, it is imperative that IP rights holders ensure that they will have continuity in both the UK and the EU27 following Brexit. Community rights such as EUTMs and RCDs will continue in force in the EU27 but there may be complications, for example, where an EUTM claims seniority from a UK national trade mark registration. It would therefore be sensible for rights holders to carefully review the scope of their trade mark portfolio and consider whether further filings should be made.

A further issue for Community rights is the identity of the professional representatives on the record for those rights. Essentially the professional representative on the record is required to be authorised to practise in, and domiciled, in an EU27 or EEA country. For international firms with attorneys and offices in EU27 countries (as well as the UK) this will not be a concern, but where the current professional representative is solely based in the UK, appropriate changes will need to be made to comply with the rules.

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