Brexit: How will Intellectual Property Rights change after the transition period?

Brexit - How will Intellectual Property Rights change after the transition period?

There are various European-wide systems currently in place for protecting intellectual property, particularly patents, trade marks and designs. This means that as the UK’s relationship with the EU changes after the Brexit transition period on 1 January 2021, the way in which intellectual property rights can be protected in Europe is also going to change, requiring a corresponding change in IP strategy.

As an initial point, it is important to mention that UK national rights will be unaffected by Brexit, whether they be for patents, trade marks or designs, as these are solely governed by national law.

Additionally, the UK will continue to be a contracting state to the European Patent Convention, which is not based on EU legislation. Thus, the existing European patent system will be unaffected by Brexit and so UK Patent Attorneys will continue to be able to file, prosecute, validate and oppose European patents for clients before the European Patent Office (EPO), as is the current practice. Therefore, owners of a European patent application do not have to take any action immediately following the end of the transition period.

However, a Unitary Patent system was proposed in 2013, which would enable a single validation at the EPO to cover all of the EU member states. The necessary agreements are not yet in force, but the UK government has indicated that they do not wish to be part of the intended system. It is not yet clear what effect this will have on the Unitary Patent system itself and the corresponding Unified Patent Court, but if this system does come into force, it will not provide protection in the UK.

Pending applications for Supplementary Protection Certificates, which are based on EU regulation, will continue and can be granted after the end of the transition period. The relevant EU legislation will be retained in UK law and therefore there will be no significant changes in the short term.

Trade marks and designs are more complicated, as the European systems for both are governed by EU legislation. After the end of the transition period, as would be expected, EU trade mark (EUTM) registrations, Registered Community Designs (RCDs) and Unregistered Community Designs (UCDs) will no longer provide protection in the UK.

However, there will be no immediate loss of rights as a result of Brexit. Holders of a granted EUTM or RCD at the end of the transition period will automatically be given a fully equivalent UK right, which will retain the original filing, priority and seniority dates as the EU right. Similarly, holders of an UCD will automatically become the holder of an equivalent UK unregistered right affording the same level of protection for the remainder of the term. No action will be required by owners to obtain these new UK rights and no official fees will be payable.

Where an EUTM or an RCD has been applied for but not granted by the end of the transition period, applicants will have 9 months from the end of the transition period to reapply for the equivalent UK right and pay the necessary filing fees. It is therefore important to review any pending EUTM or RCD applications to determine whether any new equivalent UK right should be applied for during this period.

This means that European trade mark and design portfolios are likely to significantly increase in size automatically. The new UK rights will retain the same first renewal date as the original EU rights, but will require a separate renewal fee to be paid. It will be important to keep track of these new cases, to ensure that the UK protection does not accidentally lapse.

This duplication of rights also means that the strategy behind any contentious proceedings may need to be reconsidered. It has been confirmed that if an EU right is revoked due to a procedure that is pending at the end of the transition period, the newlycreated equivalent UK right will also be revoked. However, this is only applicable to the extent that the grounds of revocation of the EU right apply to the UK right. Additionally, if an action is started after 1 January 2021, a separate action will be required to revoke the UK right.

It has also been confirmed that UK trade marks and other grounds that exist only in the UK will be disregarded during ongoing EUTM oppositions after the transition period. Thus, the arguments for a currently pending EUTM opposition that will be considered may change significantly and oppositions may be dismissed entirely if they are only based on UK rights.

Use or reputation in the EU before the end of the transition period will be sufficient to maintain the validity of the newlycreated UK mark initially. However, if the newly-created UK right is not used in the UK in the following five years, it will be open to an invalidity attack. Similarly, use or reputation in the UK before the end of the transition period is relevant to the validity of the EUTM, but use in the UK after the transition period will not be sufficient to maintain the validity of an EUTM. A number of EU rights and their newly created counterparts may, therefore, be open to new invalidity attacks in the years following the end of the transition period, which should be considered both in relation to portfolio management and any contentious proceedings.

Thus, the focus of contentious proceedings might change and separate proceedings against the newly-created UK rights may be required. Any current negotiation, dispute or opposition should, therefore, be reviewed to ensure that the situation will not materially change after 1 January 2021.

It is also worth reviewing any important IP agreements, particularly licenses, to ensure that the intended rights are maintained after Brexit. For example, reference to the EU may not be construed to cover the UK and references to the newlycreated UK rights may need to be included.

Additionally, pan-EU injunctions will no longer have an effect in the UK and so it may be necessary to bring proceedings in both the EU and the UK. However, any measures taken by an EU trade mark court before the end of the transition period will be enforceable in the UK against the newly-created UK right.

UK regulations have maintained the exhaustion of rights in the UK in relation to goods put on the market in the EEA. However, absent any agreement with the EU, there will be no reciprocal exhaustion of rights in the EEA for goods put on the market in the UK. Thus, there is a chance that UK rights owners will not be able to prevent parallel imports from the EEA but owners of rights in the EEA will be able to prevent parallel imports from the UK.

Overall, Brexit should not cause any immediate loss of intellectual property rights and with careful management and a portfolio-wide overview, it will be possible to maintain existing protection with little additional cost. However, care will be required to ensure that parties are in the best position possible in relation to both their own rights and any contentious proceedings involving third party rights. ■

Jessica Fuller

Partner Brand Murray Fuller LLP Jessica.fuller@bmf-ip.com