As we have reported previously, the result of the European Union referendum (Brexit) was announced on 24 June 2016 with a vote in favour of the United Kingdom exiting.

We have issued a series of Brexit updates since the date of the referendum.  To access such prior alerts, please visit our Brexit page.

EU position paper on intellectual property rights

On 6 September 2017, the European Commission (“EC”) published a position paper setting out the main principles of the EU’s negotiating position regarding the treatment of intellectual property rights (“IPRs”) post Brexit.

Key proposals

The EC proposes that the following general principles should apply post Brexit:

  1. The holder of any IPRs having a unitary character within the EU (“EU IPRs”) (such as European Union trade marks or registered Community design rights) should, where the EU IPR was granted before Brexit, be automatically recognised by the UK as the holder of an enforceable IPR in relation to the UK territory. The ‘splitting’ of these rights should be at no cost to the proprietor (according to the EC). This principle of reciprocity should be extended to geographical indications and indications of origin (e.g. ‘Champagne’ or ‘Parma Ham’) and other protected terms in relation to agricultural products. The position paper suggests that the UK should implement domestic legislation which gives equivalent protection to these rights as rights holders currently enjoy in the EU. The position paper also proposes that EU unregistered Community design rights should continue to cover and be enforceable in the UK post Brexit, which will be of benefit in particular to the fashion industry, which relies on the automatic short-term protection for surface decoration that these rights provide.
  1. Applicants should be entitled to retain the benefit of any priority date in respect of applications for EU IPRs which are pending as at the date of Brexit when applying for equivalent protection in the UK (but there is no proposal to automatically convert these applications into applications for equivalent UK rights). This proposal is designed to preserve any applications pending at the time of Brexit.
  1. The UK should continue to process pending applications for supplementary protection certificates (or for an extension of their duration) which were made before a UK authority prior to Brexit.
  1. Right holders of databases which are protected under EU law prior to Brexit should continue to enjoy protection in the UK and the EU.
  1. IPRs which were exhausted in the EU before Brexit should remain exhausted, both in the EU and the UK. The conditions of this exhaustion should be determined in accordance with EU law.

High level aims

This position paper sets out the EC’s high level aims for IPRs post Brexit. It is likely that the UK’s starting position will diverge (perhaps not dramatically) from these proposals.

The EC’s proposal that EU IPR right holders should be recognised as the holder of an enforceable IPR in relation to the UK territory appears similar to the Chartered Institute of Trade Mark Attorneys’ (“CITMA”) proposal that “all current EU trade marks and Registered Community Designs [should be] transferred onto the UK register”. This is a likely and sensible practical outcome; the UK is unlikely to remain a part of EU IPR regimes because to do so would mean that the UK would need to accept the jurisdiction of the Court of Justice of the European Union, which is a difficult political sell.

Who should shoulder the burden?

It is unlikely that the UK will agree (at least at the start of negotiations) to shoulder the entire administrative and/or financial burden of processing the grant of equivalent UK rights (there are, for example, over one million registered EU trade marks), or accept that rights will be automatically granted (without any fee).  The UK Intellectual Property Office may ultimately insist on a payment of an administrative fee by EU trade mark holders to process the applications into UK marks, given the considerable cost burden it would place on it.

It is noteworthy that the EC has proposed that the UK should provide protection to various geographical indications and indications of origin post Brexit; clearly (and understandably), the EC is keen to protect its most valuable exports. No doubt the UK will seek to ensure that its protected goods (e.g. Scotch Whisky or Cornish Pasties) retain protection throughout the EU post-Brexit. It is unclear, however, how these proposals might impact a potential trade deal between the UK and the US (who may be less inclined to afford protected status to such goods).

Unanswered questions…

The EC proposals appear to be (largely) uncontroversial and seem to be practical, common sense solutions to the transition of EU IPRs. They also echo many similar sentiments and recommendations that have been mooted by practitioners since the referendum.  However, as with the Brexit process in general, there are many unanswered questions regarding how IPR will be protected and enforced after the UK leaves the EU.  For example, where an EU trade mark has solely or mainly been used in the UK for 5 years or more, how will genuine use and reputation of the mark be assessed post-Brexit? Will the UK adopt a national, regional or international approach to exhaustion of IPRs? What will happen to EU trade mark cases pending before UK Courts (which may no longer have jurisdiction)? Will UK Chartered Trade Mark Attorneys be able to continue to represent their clients before the EU Intellectual Property Office? Notably, there was no mention of the Unified Patent Court, and its application to the UK post-Brexit.  These and many more specific, complex IPR issues will need to be addressed in due course. 

We will continue to monitor and report on the issues raised in this alert from the perspective of our clients, as we have done so in prior alerts relating to Brexit.  To access such prior alerts, please visit our Brexit page. Further updates will follow in due course.

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In the blur of mega firms, Brown Rudnick stands out as a “global boutique” and has in place a multi-disciplinary, international Brexit Team. We are monitoring and analysing the consequences and considerations for businesses and are ready to advise on the potential legal implications of Brexit. The Brown Rudnick Brexit Team is available to advise on the issues across a broad range of sectors within our areas of expertise. 

FOR QUESTIONS OR MORE INFORMATION, PLEASE CONTACT:

Alexander Carter-Silk

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F: +44.20.7851.6100

Mark A. Dorff

P: +44.20.7851.6005

F: +44.20.7851.6100

Steven James

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