From 23.00 on 31 January 2020, the UK will no longer a member state of the EU, although it will be treated as such for the duration of the transition period. From an IP point of view, the status quo will be maintained during the transition period (currently until the end of December 2020). Here we look at how the Withdrawal Agreement acts to preserve IP rights in the UK which were previously based on EU rights, and what changes are anticipated post-transition, as well as the aspirations of the Political Declaration.
The Withdrawal Agreement
Articles 54 to 61 of the Withdrawal Agreement (WA) deal with EU-wide intellectual property rights and their replacement in the UK at the end of the transition period (end of December 2020). Until the end of transition the status quo is maintained, with applications for registered EU unitary rights – EU trade marks, EU registered design and Community plant variety rights – continuing as normal and all rights having effect and being enforceable throughout the EU as usual.
The WA confirms that all these registered EU-wide rights (registered before the end of the transition period) will automatically be replaced by UK rights, equivalent in every respect including term, first renewal date at no cost to the right owner and without re-examination. The trade mark replacement right will be known as “comparable trade mark (EU)” and the registered design one as “re-registered design”. Community plant variety rights in the UK will be replaced and become UK registered “plant breeders’ rights”. If the equivalent EU right is invalidated, revoked or cancelled etc. then the UK one will also be. In relation to trade mark and registered design applications pending at the end of the transitional period, there will be a 9 month period within which an application can be made for the equivalent right in the UK, with priority (and, where appropriate, in relation to trade marks, seniority) being maintained. See the UK Government’s guidance on trade marks issued on 30 January 2020 here. The WA also states that the UK will take measures to ensure that protection obtained via international registration systems (such as the Hague system for designs and the Madrid Protocol for trade marks) will be recognised in the UK. This will be done before the end of the transition period. See also the UK Government guidance in this respect, issued on 30 January here (which also covers registered designs).
Unregistered community design rights (UCD) which arise before the end of transition will be recognised in the UK with the same level of protection and term as the UCD would have had. These new rights will be termed “continuing community unregistered designs”. To fill the gap left by the lack of UCD protection (which differs in scope and application from the UK’s own UK unregistered design protection) post-transition, the UK Government will create a “supplementary unregistered design right”. Where designs are first disclosed will be significant post-transition. UCDs arise when the design is first made available in the EU. Qualification for the new UK right, supplementary unregistered design, will be dependent on first disclosure in the UK, or other qualifying country, but first disclosure in the EU will not establish the right and may destroy the novelty in the design should registered rights be sought subsequently. See the UK Government’s guidance on these changes, issued on 30 January 2020, here.
In relation to exhaustion of IP rights in goods lawfully placed on the market in the EU before the end of transition – rights in these will continue to be exhausted post-transition. The WA says that goods in the distribution chain at the end of the transition period will be allowed to continue to end-users without interference. However, IP rights in goods placed on the market in the UK post-transition will not be exhausted vis-a-vis the EU. Thus holders of IP rights in EU Member States will be able to use those rights to prevent entry of goods into their jurisdictions. See the UK Government’s guidance on exhaustion of IP rights here (which is silent on whether the UK will apply exhaustion to goods entering the UK from the EU post-transition – although the UK SI which deals with exhaustion of IP rights – the Intellectual Property (Exhaustion of rights) (EU Exit) Regulations 2019 which will come into force at the end of the transition period – provides for continued UK recognition of exhaustion of IP rights in goods put on the market in the EU post-transition).
Geographical indications protected in the EU prior to the end of the transition period will continue to be able to be used in the UK by the persons to whom they are granted, from the end of the transition period, without any re-examination, and will be granted at least the same level of protection under the law of the United Kingdom, unless or until they cease to be protected in the EU. This also applies to protected designations of origin, traditional specialities that are guaranteed and traditional terms for wine. The European Commission’s publication Questions and Answers on the United Kingdom’s withdrawal from the European Union published on 31 January 2020, states that “This agreement will also benefit the geographical indications bearing a name of UK origin (e.g. Welsh lamb): they will also obtain protection under UK law in the United Kingdom and maintain the existing protection under EU law in the EU“.
Sui generis database rights are more problematic as qualification for these is dependent on the creator being EEA-based. The Withdrawal Agreement allows for these rights, if they arise before the end of the transition period, to be maintained in the UK for at least the same period as they would have done but for Brexit whether their creators are UK or EEA-based and sui generis database rights existing at the end of the transition period which were created by UK-based entities will continue to be effective in the EEA. At the end of the transition period, sui generis database rights in the EEA will not arise where the creators are not EEA-based although an equivalent right will be created in the UK for databases created by UK entities. See the UK Government’s guidance issued 30 January 2020 here. To protect rights in the EEA in relation to databases created by UK entities post-transition, the UK Government has previously recommended that UK entities consider relying on other forms of protection, such as restrictive licensing agreements, or copyright (where applicable).
Copyright is an area where there is little clarity. It does not feature in the WA since it is not a (truly) harmonised right and there is no unitary EU copyright. There are issues relating to qualification for copyright and in particular in relation to broadcasting and rights clearance which we deal with in our other Brexit publications. The UK Government recently made a statement confirming that it would not be required to implement the Digital Copyright Directive since the implementation deadline is beyond the end of the transition period, and that it had no plans to implement it. This leaves the UK’s position on copyright open for now, although the UK is still bound by the various international copyright treaties to which it is party independently of any EU status. See the UK Government’s copyright guidance issued 30 January 2020 here.
Patents: There is little in the way of patent provision in the WA as the unitary patent is not yet available (awaiting the introduction of the Unified Patent Court to enforce it, which in turn appears to be awaiting the outcome of Brexit, and perhaps even subsequent UK-EU trade negotiations). The EPO system for central application for European patents will continue unaffected. Supplementary protection certificates (SPCs) for both plant protection and medicinal products are dealt with in the WA however. These are national rights granted by national IP offices under rules set out in EU Regulations. As such they will continue as national rights in the UK if granted before the end of transition. Where there are applications which were submitted to the UK IPO before the end of transition they will be judged according to the current EU Regulation rules and any certificate granted will give the same protection. See the UK Government’s guidance on patent law and SPCs issued on 30 January 2020, here.
UK Statutory Instruments
UK Government has already made provision for these changes via a series of statutory instruments which will come into force at the end of transition, whether there is a deal with the EU or not. See the Intellectual Property and Pharma section of the HSF Legal Guide to Brexit for details of these SIs and details of other changes that impact on the pharmaceutical sector.
The Political Declaration
The Political Declaration which sets out a framework for future agreements on post-transition relations between the UK and the EU, states:
VII. INTELLECTUAL PROPERTY
42. The Parties should provide for the protection and enforcement of intellectual property rights to stimulate innovation, creativity and economic activity, going beyond the standards of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and the World Intellectual Property Organisation conventions where relevant.
43. This should preserve the Parties’ current high levels of protection, inter alia, of certain rights under copyright law, such as the sui generis right on databases and the artists’ resale right. Noting the protection afforded to existing geographical indications in the Withdrawal Agreement, the Parties should seek to put in place arrangements to provide appropriate protection for their geographical indications.
44. The Parties should maintain the freedom to establish their own regimes for the exhaustion of intellectual property rights.
45. The Parties should establish a mechanism for cooperation and exchange of information on intellectual property issues of mutual interest, such as respective approaches and processes regarding trademarks, designs and patents.
Note the freedom to establish independent exhaustion regimes; the UK Government has in the past talked about recognising all goods put on the market in the EU as exhausted for a period post-transition (possibly in order to prevent undue restrictions on movement of goods at that time) but has not committed to this in the long term. The emphasis on copyright related rights, database rights and geographical indications reflects the aspiration for longer term solutions to the application of these rights across Europe.
The contents of this publication are for reference purposes only and may not be current as at the date of accessing this publication. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2020