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BREXIT: What should you be telling your clients to plug the vulnerability for UK Intellectual Property rights?

It is not news to say that the outcome of Brexit is uncertain.  But, do you know what you should be saying to clients to help them deal with vulnerability to their intellectual property rights in the intervening period? 

Clients from a range of sectors are impacted.  Perhaps the biggest impact will be for businesses trading on a brands, retail sectors, food industry, fashion, designers and technology.   

We have set out below some of the key points to consider:

Trade Marks

Following completion of Brexit negotiations, the UK will no longer be an EU member state. Consequently the unitary European Union trade mark (EUTM) will no longer cover the UK. So, if no action agreement is reached, which is a possibility, EUTMs will no longer provide any protection to intellectual property rights in the UK.

Warning for your clients

Businesses should consider reviewing trade mark portfolios to identify any brands which only have EU protection and no separate UK protection.

The safest approach is to file new applications for EUTMs and a separate application for the UK trade marks.

It is possible that through a bilateral agreement between the UK and the EU EUTMs will continue to have effect in the UK post Brexit.  A good outcome would be that EUTMs automatically mirror as UK trade marks. Another good result would be that intellectual property rights owner opting-in to apply for recognition of their existing EUTMs as UK trade marks.  But, the problem is, nothing can be guaranteed at this stage.  For many businesses, the risk of vulnerability will outweigh the cost of registering a UK trade mark.

Designs

Similar issues arise in relation to registered community designs (RCDs). New and existing RCDs will no longer have protection in the UK following Brexit.

Warning for your clients

Unlike EUTMs, a separate issue arises for registered community designs.  This issue is that a design cannot be registered unless it is ‘new’ at the time of its UK application.   A design right is no longer considered new once registered for a year or more.  A year is not a very long period of time in the real world.

There is not much that can be done for existing registered community designs unless Brexit comes up with a deal.  But, for “new” registered community designs businesses should consider supplementing applications for registered community designs with separate UK applications for registered designs.  The benefit of this advice is that the business will be able to obtain the same geographical coverage for both the UK and separately for the EU for their design.

Copyright

Copyright is likely to be the least affected area of intellectual property law because it is a territorial right meaning that copyright ownership originates in the country of creation. Enforcement can be worldwide. There is no registration regime in the UK or throughout the EU.

There are new copyright reforms afoot at present in the EU. Brexit would mean that the UK is no longer bound to implement future EU directives or follow decisions of the CJEU. In a nutshell we are likely to see difference in the outcome of cases heard in the UK Supreme Court and CJEU.

Over time, we are likely to see increased divergence with EU rules, rather than the harmonisation.  This is bad for businesses, in particular in the creative sector, because they would then be forced to comply with two separate sets of rules to conduct business in UK.

Patents

The impact of Brexit on substantive patent law is likely to be less significant because the current regime has been established largely as a matter of national law and international treaty, rather than EU legal order.

The one specific area that is likely to be affected is the proposed Unitary Patent and Unified Patent Court.  Further details can be found here.

If the UK Government decides not to ratify the Unified Patent Court Agreement in light of the Brexit decision, can the UPC still proceed without the UK? In the short to medium term, there is likely to be some delay.

Licensing considerations

It is worth flagging up to your clients the benefits of reviewing licences and other agreements revolving around the use of intellectual property. The vulnerability created by Brexit in turn creates risk.  The risk is rights fall out of protection and into the hands of competitors. Some of the changes we recommend can be quite straight forward in legal terms but bring strengthened commercial standing. For example, in instances where the territorial scope of a licence references the EU, this needs to be assessed to see if it covers the UK post Brexit. The licence agreement may benefit from an amendment.

Additionally, consideration should be given as to whether a licence would require amending.  It is likely you will need to cater for EUTMs / RCDs and any new UK trade marks or UK registered designs that a business obtains as a result of Brexit.

Side letters amending trade mark and registered design licences should then be registered with the UKIPO.

You should remind your clients that the registry and public needs to be kept up-to-date on the existence of an IP licence and details of any subsequent change in IP ownership must be registered with the UKIPO. Failure to do so may result in losing the right to recover costs in a successful infringement proceeding.

As the terms of the UK’s exit from the EU crystallise, and so in turn does the impact of Brexit on intellectual property we will update you.  

Our intellectual property legal team is run by John Deane and Himanshu Dasare. 

Please do get in touch if you have questions – telephone 020 7 438 1060.

GANNONS

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