Post-Brexit blues

With the cliff-edge of Brexit looming and negotiations stalling, intellectual property rights couldn’t be further from the centre of discussions

A recent position paper from the European Commission confirmed that intellectual property rights, enjoyed by the UK as part of EU law, should not be undermined by Brexit.

However, putting this to the test will be a bold and difficult challenge, with Brexit negotiations stalling at the first hurdle and a UK government that seems to be increasingly contradictory when it comes to what it wants to achieve from a Brexit deal.

The Chartered Institute of Trademark Attorneys (CITMA), always an advocate of Europe-wide IP rights, released its own position paper in July, demanding that all of its members be able to continue to represent clients at the EU Intellectual Property Office (EUIPO) post-Brexit.

The position paper said that defining rights of representation before the EUIPO is “unquestionably one of the most important issues for our profession right now”.

It explained: “For UK and international businesses, in particular the creative industries, it is vital that the UK retains strong trademark and design systems post-Brexit, and that the cost and disruption to owners of existing EU trademark and design rights is minimised.”

CITMA has also called for these rights to be extended to the European General Court and the Court of Justice of the EU to “allow [attorneys] to represent their clients at all levels of the justice system”.

The European Commission’s position paper outlined a deal where any IP right with a unitary character, such as an EU trademark, should remain enforceable in the UK and comparable to a right provided by EU law.

When the position paper was released, CITMA president Kate O’Rourke said the commission’s position “in many respects mirrors CITMA’s position paper and is a positive step towards ensuring current EU registered trademark and design rights continue to cover and be enforceable in the UK post-Brexit, with minimum cost to IP owner”.

She explained: “I am delighted the commission has recognised that it is important legal certainty is maintained when it comes to registered EU intellectual property rights for the benefit of business.”

However, O’Rourke added that the omission of any guarantees for UK attorneys to practice before the EUIPO was “disappointing” and it will continue to be an important focus for CITMA.

Commenting on the commission’s position paper and its implications, Stephen Hodson, partner at Mewburn Ellis, comments: “Ultimately, this is more in the hands of the UK government than the EU, as only the UK government can decide whether to recognise EU rights post-Brexit.”

“However, it is possible that the EU could make recognition of existing EU-wide rights in the UK post-Brexit one of the conditions of any trade deal … We have already seen something similar in the CETA trade deal between the EU and Canada, under which EU protected designations of origin and protected geographical indications are required to be recognised in Canadian law,” he adds.

Hodson suggests that resolving the issue of IP rights will be dependant on the course of the wider negotiations.

He explains: “IP rights are obviously some way down the scale of matters to be decided. Therefore, the full attention of the respective negotiating teams is unlikely to turn to IP until larger issues have been resolved.”

But he concedes that IP rights are a “relatively technical area where significant disagreement appears unlikely”, and it is very possible that an agreement will quickly be reached on most, if not all issues.

“For that reason it is encouraging that the EU has already set out its position and we hope that the UK will follow suit to allow common ground to be identified,” he concludes. As it stands, the UK is unlikley to reach a deal within the time period allowed under Article 50 and by March 2019, causing a ‘no-deal’ scenario.

Hodson explains that this ‘no-deal’ scenario would be unlikely to affect systems such as the Unified Patent Court (UPC) and the Unitary Patent, but for trademarks and designs, the UK would be left to decide how to treat existing holders of EU-wide rights.

According to Hodson, it is very likely that the UK would recognise these rights as effective in the UK, at least initially.

He says: “The fallout from a wholesale extinguishing or denial of property rights would not be palatable on a geopolitical scale and could lead to legal challenges.”

“However, one area that could be significantly affected is parallel imports, as EU rights would no longer be exhausted by placing a product in the market in the UK or vice-versa.”

The only hint from the UK on its IP rights position was its decision to ratify the UPC agreement in November last year, before Article 50 was triggered.

Brexit negotiations began on the 19 June 2017 and will continue until March 2019. So far, the core of negotiations have focused on the issues of citizen’s rights, Britain’s divorce bill and the question of the border between Northern Ireland and the Republic of Ireland post-Brexit.

The chief EU negotiator, Michel Barnier has said that no decisive progress has been made on any of the main issues in the talks, despite the UK’s Brexit secretary, David Davis, maintaining that progress has been made.

Both sides intend for the first round of talks to be concluded by December this year, after which, the UK and the EU can move onto discussions of a future relationship and transitional deal.

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