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Brexit Update: IP discussions underway

September 19, 2017


Partners Richard Watts

Intellectual property

With Brexit now only 557 days away (and counting), progress is starting to be made on what will happen to European intellectual property rights on Brexit Day (B-Day). Fundamentally, both the UK and EU agree that registered European intellectual property rights should remain protected in the UK following B-Day, but the mechanics and detail of how this will happen are still unclear. Depending on what's decided, those details could have significant cost implications for IP owners.

The European Commission issued a position paper earlier this month setting out its views on how the division of trade marks, designs and geographical indications should take place following B-Day.

What did the European Commission say?

There are five key points arising from the position paper:

  1. The position paper applies to trade marks, designs (registered and unregistered), plant variety rights and geographical indications, but not patents.
  2. Existing EU registrations for these rights should be automatically recognised as enforceable intellectual property rights in the UK.
  3. The process should be at no cost to the rights holder (which means the UK will be landed with the cost of implementing the changes).
  4. Applicants should be entitled to keep the benefit of the priority date of any pending EU applications for these rights when applying for an equivalent intellectual property right in the UK after B-Day. Automatic recognition is not proposed.
  5. Rights resulting from intellectual property rights which were exhausted in the EU prior to B-Day should remain exhausted in the EU and UK. For example, this means that when a product branded with a registered trade mark is imported into a European Economic Area country with the trade mark owner's consent, the trade mark owner cannot oppose the re‐importation of these products into another European Economic Area country.

At first glance, this looks good for rights holders as European intellectual property rights will remain fully protected in both regions, at no cost to rights holders. But that is not to say the process will necessarily be easy or cheap. There is still an enormous cost and administrative burden to be dealt with somehow.

Gnarly issues still to be decided

While the European Commission's position paper is helpful, there are still many uncertainties about the process. For example:

  • What will happen to opposition and cancellation proceedings before the European Union Intellectual Property Office (EUIPO) which are still pending on B-Day? Currently, there are more than 20,000 pending oppositions before the EUIPO.
  • Will English continue to be an official language of the EUIPO after B-Day? This is important for proceedings conducted before the Office as the other official languages for EUIPO proceedings are currently French, German, Spanish and Italian.
  • The UK currently does not recognise geographical indications under its laws. Will new legislation be brought in to address the EU's requirement that geographical indications continue to be protected in the UK? The UK press have jumped on this suggestion, calling it the "Parma Drama".
  • How will the division process work from a practical perspective? There will need to a huge number of changes made to the United Kingdom Intellectual Property Office's databases of registered intellectual property in a very small timeframe. More than 1 million trade marks will be added to the UK trade marks register, while the UK designs register will grow from 40,000 designs to almost 800,000.
  • Will the UK agree with the European Commission's recommendation that it bear the cost, or will there be cost implications for rights owners? (There will be extra renewal costs for the additional registrations in any case.)

What about patents?

The European Patent Organisation (EPO) is not administered by the EU. Instead, it is an inter-governmental organisation with a broader membership than just EU countries, meaning that the UK could continue as a member after B-Day. This is the expected position but it is still to be confirmed.

What next?

We will not have a clear idea of how the process for division of EU intellectual property rights will work until the UK issues its own position statement. The timing for this is unknown.