Brexit: English Intellectual Property law implications

By Sally Shorthose

01-2021

The UK exited the EU on 31st January 2020. The transition period in the Withdrawal Agreement ended on 31st December 2020. Existing EU Treaties, EU free movement rights and the general principles of EU law now no longer apply in relation to the UK. EU regulations only continue to apply in UK domestic law (by virtue of the European Union (Withdrawal) Act 2018) to the extent that they are not modified or revoked by regulations under that Act.

The EU and the UK negotiating teams have agreed the terms of a detailed post-Brexit Trade and Cooperation Agreement which has been given effect from 1st January 2021 (the "TCA").

This article is part of our Brexit series. It advises readers on the immediate considerations and anticipates how Brexit will impact on the IP/IT market now that the transition period has ended. For an explanation of the finalised Withdrawal Agreement, please see this link.

Relationship with EU law

IP laws were harmonised to a large extent across the EU, and much of the UK legislative framework in this field has been composed of directly effective EU Regulations and transposed EU Directives. To the extent those EU Regulations relevant to IP were not transposed into English or Scottish law, a regulatory vacuum may have been created; this is one of the purposes of the Withdrawal Agreement – to avoid such a vacuum. The Withdrawal Agreement which has repealed the European Communities Act 1972 ("ECA 1972") as from the end of the transition period, includes provisions to convert the existing body of currently directly applicable EU law into domestic UK law, by means of statutory instruments. This mainly applies to EU Regulations which would otherwise cease to apply on the UK’s departure from the EU, and also to statutory instruments implementing EU Directives, where the statutory instruments were adopted pursuant to the ECA 1972 and would otherwise fall away on repeal of that Act.

In due course, MPs will go through each law on a piecemeal basis and amend or repeal them as necessary based upon national interests. This is intended to facilitate a smooth transition with all EU laws, including the relevant IP Regulations and Directives remaining in force. However, as the UK is no longer a member of the EU, this will affect the unitary character afforded to IP rights.

The TCA provides that intellectual property rights will continue to be protected to at least the standards required by the international agreements that the UK and the EU are both parties to, and in many cases to a higher standard.

The agreement covers a broad range of intellectual property rights, including patents, trade marks, designs, unregistered rights such as copyright, trade secrets and unregistered designs.

The UK and the EU have agreed to protect the intellectual property rights of each other’s nationals no less favourably than their own.

The TCA also includes mechanisms for co-operation and exchange of information on intellectual property issues of mutual interest.

Implications of the Brexit

Some implications of Brexit will apply to organisations in the same way whether they are based in the UK, in the EU or elsewhere in the world. For example, the changes to unitary patents are pertinent to any company seeking pan-European patent coverage, whereas the exclusion of the UK from the European Digital Single Market, will be more acutely felt in the UK. Below is a summary of some of the main implications.

Patents

Patents will to a great extent continue as before - patents covering the UK will continue to be granted both by the UK Intellectual Property Office (UKIPO) and the European Patent Office (EPO). Applications for patents can be filed directly with the UKIPO or EPO, or can be made pursuant to an international patent application filed under the Patent Cooperation Treaty. Neither the UKIPO, nor the EPO, is an EU institution and their operation will be unaffected by Brexit.

The UK will continue to be one of the 38 contracting states to the European Patent Convention, which is the international treaty that established the EPO. Applicants will continue to be able to file their applications with the EPO and, on grant, request validation in the UK and other countries of interest.

The standing of granted patents will also be unaffected by Brexit. Following grant and validation in the UK, European patents have – and will continue to have – exactly the same legal effect in the UK as national patents granted by the UKIPO.

Furthermore, the UK will remain a member of the Paris Convention, which supports IP protection around the world. Applicants who have filed for patent protection in the UK will still be able to subsequently claim the priority of that application for a patent registration in other countries and vice versa.

SPC's

The additional protection afforded to patentees by Supplementary Protection Certificates (SPCs) has been part of UK law by virtue of two EU Regulations. By virtues of The Patents (Amendment) (EU Exit) Regulations 2019 all EU SPC law was transposed into UK national law, but to make this retained EU legislation work in practice some processes have had to change.

During the transition period, the UK’s SPC regime was unaffected so UK SPCs granted before the transition period expired will, remain valid, on the same term. Furthermore, in accordance with the Withdrawal Agreement, all pending SPC applications filed in the UK before 31st December 2020 will continue in the same way regardless of Brexit, and will provide the same rights once granted.

The position has changed now that the transition period has ended; while the UK’s SPC regime remains largely unchanged, and many of the processes for applying for an SPC will remain the same, applicants for new SPC applications filed from 1st January 2021 will require (as before), a UK patent granted by the EPO or the UKIPO, and a marketing authorisation (MA) valid in the UK. New SPC applications filed from 1st January 2021 can therefore be based on either:

  • existing European Medicines Authority (EMA) authorisations, if the product has already been authorised by the EMA before 2021 and that EMA MA has become a UK MA by virtue of the grandfathering which was introduced to ensure that authorised products remained on the UK market; or
  • MAs granted by the UK’s Medicines and Healthcare products Regulatory Agency (MHRA).

From the end of the transition period, since Northern Ireland is continuing to be aligned with the EU in relation to medicinal products post-Brexit, UK MAs may have one or two of three different territorial scopes. This means there will be three types of MAs that apply within the UK:

  • MAs for Northern Ireland (NI) granted as part of the EMA’s centralised procedure;
  • MAs for England, Scotland and Wales (Great Britain or GB), granted by the MHRA; or
  • UK MAs valid across the whole UK (where based on grandfathered EMA MAs).

It may be that applicants end up with multiple MAs – a Great Britain MA and a NI MA.

New legislation has had to be introduced (Supplementary Protection Certificates (Amendment) (EU Exit) Regulations 2020), to replicate as far a possible, a regime as familiar as possible to the previous regime. It is intended that an SPC may be granted if there is an MA which allows the product to be sold anywhere within the UK, but such an MA must fulfil the same requirements as in the current system – i.e. it must be valid for placing the product on the market and must be the first such authorisation for its particular territory.

Practical implications – deadline, scope and term

Where the deadline for filing SPCs is set by the first authorisation date, the deadline for filing a UK SPC will be six months from the earliest authorisation anywhere in the UK. As EMA MAs will continue to take effect in Northern Ireland, the grant of an EMA MA will continue to set the deadline for a UK SPC filing in the normal way, unless a GB MA is issued earlier. For the normal situation where the EMA MA is the first MA granted in Europe, this means that the deadline for filing the UK SPC application will remain aligned with the deadline in the EU. Of course, the deadline for filing SPCs is the later of the first authorisation and patent grant, so there will be no change to the deadline for filing the UK SPC where patent grant occurs last.

Applicants should monitor the grant of new EMA and UK MAs in order to ensure that no opportunities for supplementary protection are missed.

The term of UK SPCs will continue to be calculated on the basis of the earliest authorisation date in any part of the UK and the European Economic Area (EEA). The effect of this is that if authorisation in GB lags significantly behind authorisation by the EMA, some exclusivity in GB will be lost. Monitoring of portfolios and opportunities will be especially important under the new regime.

The unitary patent system

The new EU patent regime is intended to provide patentees with the option to apply for a single pan-EU Unitary Patent (UP) covering most of the EU. It would also create the Unified Patent Court (UPC) to hear and determine patent disputes on an EU-wide basis.

The introduction of the new regime, whose future was already uncertain after the Brexit vote in June 2016, was further delayed and complicated by the challenges to the regime going through the German courts. The UK ratified the UPC Agreement in April 2018 but in early 2020 confirmed that it would not seek to be involved in the regime and it withdrew from the UPC and the UP agreements. While UK business will be able to protect their inventions using the UPC, this regime will not apply in the UK and inventions should be protected using national patents deriving either from the EPO or the UKIPO. Further analysis on this is found
here.

Community rights including Trade Marks

As the transition period has now ended, EU Trade Marks (EUTMs) and Registered and Unregistered Community Designs no longer have effect in the UK. The UK government has automatically created a comparable UK trade mark for every registered EUTM, at no charge, with effect from the end of the transition period. The same applies for Registered Community Designs (RCDs). However, this does not apply to pending EUTM applications, so companies with pending applications should apply to register a comparable UK trade mark as soon as possible.

There is, therefore, technically no need for companies with EUTM and RCD registrations which existed at the end of the transition period to re-file for equivalent registrations in the UK, as comparable UK registrations have been automatically granted. For new filings, however, companies are advised to dual-file in the EU and UK if protection is needed both in the UK and the EU. Companies should also review the following:

  • Whether they have any pending oppositions/cancellation actions at the EUIPO: actions which were only based on UK rights will have fallen away and parallel actions against the new comparable UK trade mark will need to be brought.
  • Whether their existing EUTM legal representatives will remain entitled to represent them before the EUIPO and the UKIPO after the end of the transition period. Bird & Bird will be able to represent clients before both the UK and the EUIPO.
  • Their broader enforcement strategy: pan-EU injunctions no longer cover the UK and will not be available in the UK, meaning that separate EU and UK proceedings need to be brought to cover all of Europe.
  • Whether they have an EU customs notice ("Application for Action") in place which was filed via UK Customs: these have fallen away at the end of the transition period and need to be renewed/re-filed via one of the remaining EU countries. A UK filing will also be needed.
  • Whether they have hardware businesses affected by parallel imports between the UK and continental Europe: the ability for trade mark owners to prevent imports from one territory to the other will differ depending which way the goods are going.
  • References to the EU in brand licence agreements will need to be considered to ensure that the territorial provisions continue to reflect the commercial need and understanding.

For more information on trade mark licensing – please see here.

For more information on designs, please see here.

Life Sciences regulation

The UK’s various Life Sciences regulatory regimes have been intimately connected with the EU; the EMA was based in London and has now moved to Amsterdam. A sophisticated and comprehensive pharmacovigilance system was established around this regime.

Further information can be found here.

Exhaustion of rights

Interestingly, as regards exhaustion of intellectual property rights, the UK government has in The Intellectual Property (Exhaustion of Rights)(EU Exit) Regulations 2019 (the 'SI') an asymmetric regional exhaustion. 

The TCA simply provides that the UK and EU are left free to determine their own approaches to the exhaustion of IP rights.

Therefore, although owners of UK IP rights will not be able to prevent parallel imports from the EEA, as the UK are no longer a Member State, owners of rights in the EEA will be able to prevent parallel imports from the UK. The Intellectual Property Office's guidelines on exhaustion and parallel trade post-Brexit, therefore stress the need for parallel importers to review whether they will need the EEA-based IP rights holder's permission to export goods to the EEA.
The government plans to publish a formal consultation in early 2021 regarding the scope of the permanent exhaustion regime.

More detail can be found 
here.

Geographic Indications

The TCA does not include a chapter on geographical indications, but provides explicitly that provisions could be agreed in due course.

The UK and EU are permitted to set their own rules on geographical indications, but may decide to agree joint rules for the protection and domestic enforcement of geographical indications in future.

The UK remains bound by its commitments in the Withdrawal Agreement to protect all existing geographical indications protected by the EU (whether from the EU or elsewhere). British names remain protected in the EU provided they comply with the EU registration criteria. During negotiations of the TCA, it was reported that the UK had wanted to revisit these commitments, but this has not been achieved.

Copyright and database right

It is generally assumed that Brexit will have little effect on copyright in the UK, as so much of the UK’s copyright law has its roots in international treaties and is not dependent on membership of the EU.

There are, however, some aspects of UK copyright law which are derived from EU Directives. Pursuant to the terms of the Withdrawal Agreement, these aspects have been incorporated into UK law with effect from the end of the transition period so the law will not change, at least in the short term.

One exception is sui generis database rights – UK citizens, residents, and businesses will not be eligible to receive or hold database rights in the EEA for databases created on or after 1 January 2021. As such, owners of databases created on or after 1 January 2021 should consider whether they can rely on alternative means of protection in the EEA – for example licensing agreements or copyright, where applicable.

UK legislation will be amended so that only UK citizens, residents, and businesses are eligible for database rights in the UK for databases created on or after 1 January 2021.

However, under the terms of the Withdrawal Agreement, database rights that exist in the UK or EEA before 1 January 2021 (whether held by UK or EEA persons or businesses) will continue to exist in the UK and EEA for the rest of their duration. Anyone in the UK who wishes to use databases protected by these rights will continue to need the permission of the right holder(s) as before.

Copyright in databases

Copyright protection for databases in the UK and EEA is unchanged as it continues to be governed by the terms of international treaties and protection and rights do not depend on the UK’s relationship with the EU or EEA.

Conclusion

As expected, Brexit was not a simple divorce. Now any UK legislation, which has hitherto been dependent on EU legislation, will have to be unpicked. Separation presents the opportunity for the UK's laws to diverge from those of Europe, and such separation may be embraced in some areas. However, in IP, this is unlikely to happen to any significant extent given the interconnection of trade and the universal recognition that harmonisation is beneficial. Going forwards, the UK will no longer be able to influence EU policy, which may undermine the position of UK-based IP and IT companies both within Europe and on the world stage (especially vis-à-vis the USA as the UK may be seen as second class without a voice in Europe) and make it a little more difficult to compete.

Given the continued uncertainty about the long term future, IP owners should identify which of their rights are now likely to be affected and may need further application/registration in order to achieve maximum protection over that right.

For any queries about any matters raised in this note, or other questions about how Brexit may affect your business, please contact Sally Shorthose.

This article is part of our Brexit series

 
Brexit Read more on our Brexit portal