Have you reviewed your IP agreements following Brexit?

It has now been over five years since the UK's departure from the European Union (Brexit) and the end of the transition period. If you have not reviewed your intellectual property (IP) agreements that were in existence prior to Brexit, then it may be wise to do so now, particularly as they are likely to have been drafted and negotiated when the prospect of the UK leaving the EU was remote.

Why should I review my IP agreements?

Agreements concerning your IP should be regularly reviewed to ensure that the terms are being adhered to, to ensure that the terms still make commercial sense to your business, and to ensure that the parties contracted to the agreement are still appropriate. If not, it may be possible to terminate the agreement, amend the agreement, or novate the agreement to an appropriate third-party.

Following Brexit, agreements covering the EU should have been reviewed to assess the effect of Brexit on any rights and obligations under the agreement. In particular, the territorial scope of the agreement should be considered. Prior to Brexit, many agreements referred to the territorial scope as “the EU” without further distinguishing member states or the relevant date of constitution.

Following Brexit, if any of your IP agreements cover “the EU” without further clarification, then there may be a degree of uncertainty as to the territorial scope of the agreement. Courts may interpret agreements covering “the EU” differently depending on the drafting of the agreement as a whole and the intent of the parties at the time of executing the agreement. This could lead to enforcement challenges as, in some scenarios, “the EU” may be held to no longer include the UK.

What should I do if the territorial scope of my IP agreement covers “the EU”?

Upon auditing existing IP agreements, if any such agreements cover “the EU” it may be beneficial to create an amendment explicitly including the UK (if this is desired) and amending the definition of “the EU” to more appropriately cover circumstances where countries leave or enter the European Union. For example, you may wish to define the EU as constituted at a specific date, so that it is clear which countries fall into the scope of the agreement. In case other Member States also leave the EU, it would be advisable for agreements to provide for what happens to any country which quits the EU. This will somewhat ‘future-proof’ the agreement if further changes to the EU constitution occur in future.

Other factors to consider

Brexit has had wide ranging impacts including restrictions on the movement of people (potentially making the retention of key staff more difficult), the UK gradually diverging from the EU legal and regulatory terms (think VAT, data protection and competition law), trade barriers, and the pounds value. These factors may have an effect on the suitability of existing contractual provisions, and it is important to consider whether any clauses need renegotiating as a result. If renegotiation is not possible, consideration should be given to whether the agreement should be terminated on notice (if possible), or if force majeure or break clauses could be relied on.