Jun 27, 2016

What Brexit Will Mean For Intellectual Property – Harbottle & Lewis LLP

1.     We don’t know what relationship the UK will have with the EU post-Brexit – other than not being a member state. Every business must plan an enterprise-wide review of its intellectual property licence and distribution agreements to establish any requirements for renegotiation (and possibly, termination).  The most obvious point being that agreements defining a territory as “the EU” will almost certainly have to be interpreted as excluding the UK from the date of exit.

2.     The departure of the UK from the EU could undermine much of the rationale for existing licence arrangements that are drafted on an EU-wide basis. This could result in pressure to terminate or renegotiate, and potentially litigation.

3.     EU law must be complied with in the UK until we leave. However, Directives that have not yet been implemented (such as the recent Trade Secrets Directive) will almost certainly not be implemented.  Meanwhile, however, English courts may nevertheless be obliged to apply the principles of such directives whether or not implemented.

4.     Depending on the approach taken by law makers, the principle of exhaustion of rights might no longer apply in the UK, unless we become an EEA member like Norway. If so, it would be possible to use IP rights to block any imported genuine goods at the UK border, whatever their origin.

5.     Obviously, the EU-wide IP rights, such as the EU trade mark and Community design rights, will no longer include the UK once we leave the EU. This has practical and cost implications for IP managers in terms of filing strategies.  Unless some kind of automatic conversion of rights is established as part of the exit transition, action will need to be taken well in advance of leaving the EU, to ensure protection in the UK.  It may be possible to convert EU-wide marks to national rights, or new filings may be required.  A massive disadvantage of new filings will of course be the loss of priority, unless again that is catered for by transitional legislation.

6.     Remedies for infringement of intellectual property rights will change. In particular, terms settling past disputes, and cross-border injunctions granted by courts, will have to be reassessed. 

7.     Litigation strategies will also need to be reassessed, since the jurisdiction rules under the Brussels Regulation might no longer apply. This will affect choice of forum for future disputes.

8.     Much of what we have come to understand as enshrined principles of IP law will be open to reinterpretation. Decisions of the CJEU will continue to have effect indirectly as a result of past decisions of our appeal courts based on CJEU judgments.  Eventually, those decisions will be reassessed.  Many may view this as a welcome opportunity for the English courts to simplify and clarify some of the harder concepts of, in particular, trade mark law.

9.     The Unified Patent Court system and the Unitary Patent will not include the UK. This will also seriously delay the commencement of the Unified Patent Court for the remaining member states, since the UK’s ratification was essential to commencement and, further, the UK was to be the location of one of the three central divisions.  UK businesses holding EP patents still need to understand the UPC system, however, and in particular must stay focused on the key current requirement of assessing whether to opt EP patents out of UPC.  For the avoidance of doubt, none of this affects the long-established EP patent system, which is not specific to EU member states.

10.And finally – this doesn’t necessarily stop with the UK. Businesses should be alive to similar issues looming in other EU member states, and take care when drafting any EU-related IP agreements.  There is no need for immediate panic, but Brexit will in due course have huge implications for IP rights holders and licensees.  IP practitioners, and rights holders, will be at the forefront of shaping how things play out.

Jeremy Morton, Partner
(+44) (0)20 7667 5293

Jeremy Morton leads the contentious intellectual property practice at Harbottle & Lewis. He is a senior intellectual property and technology law adviser and litigator in the UK, with over 20 years'experience. He advises on a wide range of European IP law, contentious and non-contentious, including patent litigation, copyright, trademarks, designs, trade secrets, as well as data protection. He frequently advises in the technology, arts and entertainment fields. He also advises on brand management.

Ed’s Note: This article was originally published by the author here