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Updated Intellectual Property Brexit note

06 January 2021

The Brexit transition period ended on 31 December 2020, and the UK and the EU finally agreed a Trade & Cooperation Agreement on 24 December 2020, thereby avoiding a “no deal.”

The Trade Agreement draws lines in the sand for minimum standards of IP protection which both the EU and the UK agree to adhere to. These largely reiterate existing commitments enshrined in Treaties and existing EU and national legislation in relation to key IP rights. They are therefore nothing new or radical, but at least give some comfort that there will be no fundamental divergence of standards of protection for most IP in the short term.

It has little impact on the position adopted in the UK and EU Withdrawal Agreement and the related UK implementing legislation.  As a result of the UK withdrawing from the EU, there are some important changes relating to IP which have now come into effect in the UK. There are steps that businesses should now be taking in light of these changes.  These are described below.

Trade marks

  • From 1 January 2021, a UK or Channel Islands address will be required for new applications, oppositions and other new proceedings at the UK IPO. Previously, an address for service could have been anywhere in the EEA. For new actions at the UK IPO, you will need to ensure a UK or Channel Islands representative is appointed. We can represent you.
  • Owners of registered EU Trade Marks (EUTM) have now been automatically granted an equivalent UK registered trade mark, at no cost. An EUTM will cover the remaining 27 Member States only. The new UK trade mark has the same filing and priority date as the EUTM. You should ensure that records are updated to log your new UK registered trade marks, and renewal deadlines, and that you budget for additional renewal fees. We can assist you with this.
  • If you had an EUTM application which was pending on 1 January 2021, you will have 9 months to apply for an equivalent UK application, on payment of a filing fee. We can monitor this deadline for you. If you do opt in, your application will be examined as though it had been filed directly at the UK IPO, and any filing priority will be recognised. It is possible that this process will result in the registration of UK TMs which take priority over existing UK TM applications.
  • If you are considering applying for a trade mark now, and your business covers the UK and the EU, you should file in both the UK and EU to secure protection throughout the current EU. We can assist you with this and advise on how to secure protection in the most cost effective way, with cash flow in mind.
  • Parties to trade mark licences, settlements, or other agreements which relate to EUTMs should review these now, to ensure that the terms are carried through to the new, cloned UK marks, if necessary by amending existing agreements. This is an exercise we can assist with as required.
  • You will no longer be able to rely on UK rights to challenge EUTMs, or to rely on use of a trade mark in the UK to defend a non-use challenge to an EUTM. Any use of an EUTM prior to 31 December 2020 will count as use of the equivalent UKTM, up until then. You should look at your portfolio now to assess how and where you have used your trade marks, in case use needs to be supplemented, or new applications are needed. We can carry out portfolio use reviews and maintain evidence of use banks.
  • If you have pending or imminent disputes in the EU IPO, you should review their status now and look at steps which may be necessary to preserve or enhance your position. We can also provide strategic advice in relation to the impact of Brexit on disputes.

Designs

  • Similar provisions described above in relation to registered EUTMs will apply to EU Registered Community Designs (RCDs). Existing RCDs have been cloned, creating a new UK registered design, and leaving the RCD covering the remaining 27 EU Member States. Applications which were pending on 31 December 2020 will not be automatically cloned, but as with EUTMs, there will be a 9 month period to convert them, and a fee to pay to have them ported into the UK’s system.
  • EU unregistered design rights (UCDs), which automatically protect certain designs of individual character from copying for 3 years from their first disclosure to the public, are not currently provided for under UK law. There will be a continuing unregistered design introduced to give protection in the UK for the remainder of the 3 year period attached to a UCD. In addition, a supplementary unregistered design right has been introduced from 1 January 2021, to give similar protection in the UK to the UCD.
  • As there are disclosure requirements for UCDs, it will be important for businesses who rely on them to assess where and how they first disclose their designs, to ensure that disclosure does not destroy novelty.
  • Businesses would be well advised to consider their overarching strategy for design protection, given the multiple different rights, to assess how best to protect designs which are in the pipeline now, but which have not been released.
  • As with trade marks, we can assist with Brexit related design queries, strategy for new designs, disputes and agreements.

Copyright and related rights

  • The fundamentals of copyright law are unlikely to change substantially, at least initially, since copyright protection is largely territorial. Some aspects of copyright law, and related rights, are however harmonised across the EU, or are due to be so.
  • We already know that some aspects of our law will diverge from the EU. It is also possible that the UK Courts will take a different stance to the CJEU, for example by not choosing to follow the recent Cofemel and Brompton decisions which potentially broaden the scope of copyright protection.
  • The UK government has announced that it does not intend to implement the EU Copyright Directive, with its controversial “snippet tax”, “upload filter” and “value gap” provisions, meaning that the UK’s copyright law may diverge from that of the EU in this regard. This may have practical consequences for businesses operating in both the UK and the EU after Brexit. We will be monitoring developments closely.
  • EU law also provides for cross-border portability of digital content – meaning that digital content available in one member state must be available in all. This portability will no longer apply to the UK after Brexit. This could be a boon for rightsholders who will have greater control over their content, but it is also likely to require UK rightsholders to implement new licensing deals allowing for their works to be made available in the EU. If your business owns or relies on digital content we can help you consider the implications of this change on your business operating and licensing models.
  • Broadcasters based in the UK will no longer be able to rely on the so called “country of origin” principle that currently allows them to clear rights only where they are based. Unless they can establish an EU base, copyright clearance in all counties where their broadcast is received may be necessary.
  • The EU provides for an exception to copyright infringement, allowing cultural heritage institutions such as museums, archives and libraries to digitise works without identifiable owners, and make these works available online across the EEA. Unless the law is amended, this exception to infringement will no longer apply to the UK.
  • There will be a significant impact on the EU sui generis database right. Where a database had received a sufficient investment of time, money or effort, and was created by an EEA national, resident or business, that database was automatically protected across the EEA. Following the UK’s withdrawal from the EU, EEA members will not be obliged to recognise the database rights of UK rightsholders, meaning that enforcement against infringers in the EU will become more difficult. The UK has introduced its own database right from 1 January 2021. This right will only be available for databases created by UK businesses or citizens. If your business invests in or uses databases we can advise you on how they may be protected after Brexit.

Patents

  • The European Patent Office is a separate entity to the EU, so Brexit will not affect existing European patents. The UK government has withdrawn its ratification of the Unified Patents Agreement and will thus not participate in the Unitary Patent and Unified Patent Court system.

Exhaustion of rights

  • The current EEA exhaustion of rights doctrine means that, when a product is first put on the market in the EEA by or with the IP owner’s consent, the IP rights in that product are exhausted within the EEA. If you sell a television to someone in France, say, the same television set can be freely re-sold in the UK because the IP rights are exhausted.
  • At the end of the transition period, IP rights in a product first put on the market in the EEA will continue be exhausted in the UK. However, putting a product on the market in the UK will not exhaust the IP owner’s rights in the EEA after the transition period. This means that owners of UK IP rights will not be able to prevent parallel imports from the EEA, but owners of IP rights in the EEA will be able to prevent parallel imports from the UK. This could have a significant impact on global distribution and pricing structures, and the market for parallel imports.
  • It remains to be seen whether the UK will continue to allow IP owners to rely on their IP rights to prevent parallel imports from outside the EEA, or whether it will introduce international exhaustion.
  • The Trade Agreement expressly states that the EU and the UK may independently decide how to deal with exhaustion of rights.
  • Both for businesses dealing in or relying on parallel imports, and for businesses affected by them, we will be monitoring the position, so that your business practices can be adapted to meet potential threats and opportunities.

Domain names

  • Non-EU businesses and individuals are no longer eligible to register .eu domain names, and existing .eu domains owned by non EU businesses or citizens will be withdrawn from use and ultimately revoked. If you currently only use a .eu domain, and do not have an EU presence, we can help you find and migrate to alternative domains, or alternative means of holding your .eu domains, including the possibility of doing so through agents.

Other issues

  • There are a number of other issues which we can help businesses with.
  • Businesses which currently have an EU enforcement programme should review their strategy with Brexit related changes in mind. For example, the UK courts will not now be able to decide upon EU trade mark or design disputes and a pan-EU injunction will not cover the UK and will not be available in the UK. If you are involved in or contemplating a dispute which has an EU wide dimension, you should review its status now. There may be steps or strategic decisions which we can help you take to preserve or enhance your position, and separate proceedings in the UK may be necessary.
  • We anticipate an increase in UK only disputes. The volume of new cloned UK rights (in the region of 2 million registered trade marks and 700k registered designs) suggests that disputes in the UK are inevitable. The UK courts have specialist IP judges, and different IP dispute regimes, in which we regularly handle disputes. We can also advise on the most appropriate forum for an IP dispute.
  • Licence agreements, settlements, or other agreements which refer to EU rights, or refer to the EU, should be reviewed, to ensure that they continue to apply as intended. This may mean amending them.
  • If you have an EU Customs Application for Action (AFA) in place which was granted by the UK, this will no longer be valid in the EU. If you require your AFA to continue to apply within the EU, we can help you refile with one of the Member States. Any existing EU AFAs submitted via the UK authorities will continue to apply in the UK after the end of the transition period, but those submitted via EU authorities will not: it will be necessary to file a national application with the UK authorities if you wish action to continue to be taken by the UK authorities.
  • UK trade secret laws are unlikely to be affected by Brexit, at least in the short term, as the UK has already implemented the Trade Secrets Directive.
  • Any UK trade mark and design searches conducted after the end of the transition period should also take account of the EUTM register, to capture any EUTM applications and registrations that could be cloned onto the UK register. Watch services covering the EU should be extended to cover the UK as well.

Our IP team is actively working on the issues raised in this note with a number of clients. We would be happy to answer any questions you have, you can contact a member of the team here.

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