On 29 March 2017, the UK Government served formal notice under Article 50 of The Treaty on European Union to terminate the UK's membership of the EU (following the June 2016 UK referendum on EU membership). Based on Article 50, the EU Treaties shall cease to apply to the UK and the UK exit will take effect in March 2019 (subject to the unlikely possibility of the withdrawal agreement being concluded sooner and unless all Member States agree to extend the period). Negotiation of a new trade agreement with the EU could take several years beyond 2019 although the Prime Minister has declared the objective of achieving such an agreement within the two-year period.
Leaving the EU will have significant consequences in many areas of trade and commerce which are governed to some extent by EU law. This is particularly so in the case of designs and trade marks which have for many years benefited from availability under EU law of unitary 'Community' rights, enforceable throughout the EU. Once the UK leaves the EU, such Community rights will likely no longer offer protection in the UK and separate rights will be needed for ongoing protection here. The removal of the Community design right in particular will inevitably leave a hole in the armour of designers seeking to protect and enforce their designs in the UK. It remains to be seen whether, post-Brexit, design owners will simply have to rely instead on the pre-existing national UK design regime or whether new legislation will be introduced to plug the gaps left by the outgoing Community design regime.
What does this mean for design owners operating in the UK now?
The good news is that, in the short term, nothing changes. Until at least March 2019, whilst negotiations between the UK and the EU take place over the terms of the UK's withdrawal, the UK will remain a fully functioning member state of the EU and so Community designs (both registered (RCDs) and unregistered (UCDs)) will continue to give protection in the UK for that period.
And what about when Brexit actually happens?
No one yet knows exactly what the subsequent relationship between the EU and UK will look like.
It is possible, albeit unlikely, that a bilateral agreement could be reached between the EU and UK whereby the existing Community design regime is extended to cover the UK as well as the EU. From a design perspective, everything would effectively carry on as before. More likely however is that upon leaving the EU, the Community design regime will immediately cease to apply in the UK (although Community designs will of course continue to protect designs throughout the EU). This has ramifications for both registered and unregistered design rights.
The impact on registered designs
Fortunately, UK law already provides for a national UK registered design (UKRD) regime which mirrors the RCD regime in all substantive areas including both the requirements for validity and the rules for infringement. This is set out in the UK's Registered Designs Act 1949. Whilst the popularity of obtaining UKRD protection waned somewhat following the introduction of RCD protection in 2002 (which was roughly the same cost as UKRD protection but gave protection throughout the EU), UKRD has always been available and will continue to be post-Brexit.
In planning for Brexit, it is highly likely the UK government (through the UK IPO) will introduce a mechanism by which existing RCDs can be 'converted' into the equivalent UKRDs, whilst maintaining the original filing/priority date. This would leave the design owner with the existing RCD (giving protection in the EU), but also with a new UKRD (giving protection in the UK).
How this conversion will operate (automatic or opt-in, re-examination or not, fees payable, etc) will be the subject of much discussion over the coming months/years, but there will not be any firm answers for quite some time. There is therefore a degree of uncertainty here.
In terms of new designs being created in the run up to Brexit, the designer has a choice: (i) continue to file RCD applications only and hope to be able convert these RCDs into UKRDs later on; or (ii) file both RCD applications and UKRD applications now to avoid having to rely on any future conversion mechanism and the uncertainty as to what that might entail. The option chosen is likely to depend on the commercial importance/value of the design in question. Some larger design owners are opting for the security of getting the UKRD now (alongside the RCD), despite the potential for duplicate protection in the UK.
The impact on unregistered designs
Protection afforded by unregistered design rights is a critical weapon for those companies for which, either due to the cost of filing or the short expected lifetime of the design, design registration cannot be justified. Unfortunately, the impact of Brexit on the unregistered design protection regime is more complex and potentially problematic for designers than is the case for the registered design protection regime. This is principally because, whilst national UK design law already provides for an UK unregistered design right (UKURD) under the Copyright, Designs and Patents Act 1988, this right does not mirror the UCD right. For instance, UCD protects the appearance of the whole or a part of a product (so 2D or 3D designs), whereas UKUDR only protects shape/configuration excluding surface decoration (so effectively only 3D designs). The validity requirements for UCD are that the design be novel and have individual character over prior designs, whereas for UKUDR the design must be original (i.e. not copied) and not commonplace. Finally, for UKUDR, there are a number of complex 'qualification' criteria which in some cases mean that designs created by non-EU designers will not qualify for UKUDR protection at all.
A consequence of mismatch is that some designs may potentially only attract UCD protection but not UKUDR protection. Whilst UCD protection remains available (i.e. whilst the UK is in the EU), this may not matter much in practice. Post-Brexit though, when UCD protection ceases to be available, those same designs may not have any protection whatsoever (unless the designer sought registrations) – they would be sitting ducks for copycats.
A further difficulty is that, under the current EU design legislation, it is likely that new designs first made available to the public (e.g. displayed at a trade show) outside the EU, will immediately lose any UCD protection entitlement which they might have had if they had first been displayed inside the EU. Once the UK leaves the EU, this would mean therefore that a new design first displayed within the UK would not then obtain UCD protection in the EU. Unless an RCD had therefore been obtained to protect that design in the EU, it too could be wholly unprotected.
It remains to be seen whether the UK government will attempt to rectify these and other issues with new UK design legislation (perhaps even creating a new Community-style UK unregistered design right). Assuming it does not, or at least does not do so in time for Brexit, designers are advised to start registering their most commercially valuable designs now, to avoid the uncertainty over the scope and applicability of future unregistered rights.
- Nothing will change until at least March 2019 – Community designs will continue to give protection in the UK for that time.
- Your RCD portfolio remains as valuable as ever. Continue to file for RCD protection as normal. RCDs will be convertible into equivalent UK registered designs post-Brexit.
Options for unregistered design protection may be weaker post-Brexit. Starting now, consider obtaining registrations for commercially valuable designs.
 A similar conversion mechanism is also anticipated for EU trade marks.
This article is part of our Brexit series