The UK left the European Union on 31 January 2020, three and a half years after the EU referendum.

We are now in a transition period until 31 December 2020. During this period, the UK and the EU will negotiate the terms of a trade deal that will apply from 1 January 2021. Until that date, no legal changes will take effect.

This note sets out the short-term and possible longer-term implications of Brexit on financing, producing and exploiting film and television productions, and on the relevant intellectual property rights more broadly.

Financing

Creative Europe funding

Funding from the EU’s Creative Europe scheme will continue during the transition period. UK organisations may apply for funding until 31 December 2020, even if their production is scheduled to continue after 31 December.

Following the transition period it remains to be seen whether UK productions will benefit from Creative Europe funding. It is currently unclear whether the government would establish a domestic alternative.

Tax credit

UK entertainment tax credits for productions taking place in the UK will be largely unaffected by Brexit, but there may be some impact for productions which also involve a European element.

There are two ways for films, high end television, children’s television shows and animations to qualify for tax relief: passing the relevant country’s cultural test, or qualifying as an official co-production.

• Cultural test

During the transition period the UK’s cultural test will continue to recognise European Economic Area (EEA) nationals, and the UK tax credit will continue to be available to productions that pass this test (and meet other requirements as to spend). UK productions may still qualify for individual EU Member States’ tax relief provided they pass the relevant cultural test (and meet the other requirements), since UK personnel are granted EEA status under the Withdrawal Agreement.

Following the transition period the BFI has confirmed that minor changes will be required for UK content to qualify for EU Member States’ tax credits. The nature of those changes is still unknown, as is the nature of changes that may be required for EU-based productions to qualify for UK tax credit. The government has been vocal about how the UK entertainment tax credits are seen as beneficial for the economy and it seems unlikely that any changes to the UK tax credit system would adversely impact film and television production in the UK.

• Co-productions

A production can qualify as an official co-production under either the European Convention on Cinematographic Co-Production or a relevant bilateral co-production treaty. The European Convention is a creation of the Council of Europe rather than the EU, and bilateral co-production treaties are ratified by the UK as a nation in its own right rather than by virtue of its membership of the EU, so there will be no change (either during or after the transition period) to how productions can qualify as an official co-production and seek tax relief.

Production

During the transition period, EU nationals may continue to work in the UK. To the extent they have an employment relationship with such individuals, producers should try to assist their EU workers in obtaining settled status so they can stay after the transition period. After 31 December 2020 the government intends to manage immigration through a new points-based system, which is not expected to make a distinction between EU nationals and others, and is expected to lower the £30,000 salary floor for skilled workers currently in place. Further details of this system are awaited.

There will be no changes to freedom of movement for goods during the transition period, so transportation of equipment will be unaffected. The ability to move equipment freely to and from the EU after 31 December will be governed by the terms of the trade deal negotiated.

Exploitation

During the transition period, the Audiovisual Media Services (AVMS) Directive will continue to apply. This means that if UK content meets certain minimum requirements it may then be transmitted in EU Member States without further regulation. The position will remain largely unchanged after the transition period since the rules are largely similar under the European Convention on Transfrontier Television (ECCT), a creation of the Council of Europe rather than the EU. However, the ECCT does not apply to video-on-demand services and there are a number of EU Member States that are not party to it (such as the Netherlands and Ireland). Local advice should be sought in each jurisdiction as broadcasters may have to obtain local licences.

A revised AVMS Directive, due to be implemented in the UK by 19 September 2020, includes a 30% quota for European works on video-on-demand services and extends the regulatory regime to video-sharing platforms (such as YouTube). This 30% quota will, in principle, be retained EU law so will apply after the transition period unless amended by the UK government, and UK productions will continue to qualify as ‘European works’ under the ECCT.

Intellectual Property Rights

Copyright

The government does not intend to implement the EU Copyright Directive, with its controversial ‘transparency obligation’ and ‘contract adjustment mechanism’ provisions, post-transition period.

Trade marks

During the transition period, registered EU trade marks (EUTMs) will continue to cover the UK, as well as the rest of the EU. After the transition period, trade mark owners will automatically be granted a registered UK trade mark equivalent to the registered EUTM, at no cost. This EUTM will cover the remaining 27 Member States only. After the end of the transition period UK rights can no longer be relied on to challenge EUTMs.

More detailed information about the future of intellectual property rights, and how to protect them, is accessible here.