Sad to CJEU Go? What Brexit Could Mean for Intellectual Property (part 1 of 2)

Guest post by William Wortley*

It is over six months since the United Kingdom (UK) decided to leave the European Union (EU). The uncertainty surrounding the timing and form of the exit remains undimmed and much remains unknown about how IP rights will be affected. This week’s statement on Brexit by Theresa May make it an excellent time to revisit what the referendum result could mean for IP rights.

Patent Rights

Immediately after the Brexit vote, questions were raised about the implications for the Unified Patent Court (UPC). To the surprise of some commentators, the UK announced its intention to ratify the UPC agreement on 28 November 2016, stating that the UK would continue to work with the preparatory committee to bring the UPC into force as soon as possible.

While the UK’s ratification will be seen as good news for fans of the UPC, there remains serious doubt about whether it will be able to participate. There has been some discussion around the interpretation of Opinion 1/09 of the CJEU. The Opinion declared a previous draft of the agreement, which did not specify that participants must be EU Member States, as incompatible with EU law. Although the reasoning is not totally clear, the main concern was that the agreement failed to safeguard the supremacy of  EU law and the role of national courts and the CJEU in its interpretation and application. Part of the response to this was to change Article 1 of the agreement, so that it referred to “Contracting Member States”. As such, any UK participation would require a change to the agreement, as it would no longer be a EU Member State. While on first appearance this precludes UK participation in the UPC, some commentators have highlighted that British participation may still be possible if certain criteria are met, including the need to submit to EU law in its entirety. The UPC’s specific jurisdiction may make this legally possible, but with Theresa May making the jurisdiction of the CJEU a major part of her Brexit strategy it may be politically unworkable.

Another area that looks certain to be affected by Brexit is the procedure for obtaining a Supplementary Protection Certificate (SPC). SPCs provide up to five years of additional patent protection to compensate for time taken to gain market authorisation. The legal basis for this additional protection derives from two European regulations, and as a result would need replacing upon the UK’s exit from the EU. Given the importance of SPCs to the pharmaceutical sector, and the commitment that existing rights and laws will remain intact immediately after Brexit, it is likely that the SPC protection will remain as it is, although the legal source may have to change.

Britain’s membership of the European Patent Convention, which is unconnected to its status as an EU Member State, will remain unaffected by Brexit.

Trademarks and Designs

Community trademark and design rights will face potentially the greatest impact of Brexit. Without action, such rights will no longer be protected in the UK after Brexit. Any bilateral agreement will have to address certain substantive provisions of EU trademark law, particularly the geographical scope of the “use” requirement.  It has been mooted that the UK could “opt-in” to these community rights as a non-Member State. While this may be legally possible, the requirement of submitting to CJEU case law may make this impossible in light of the Prime Minister’s declaration on the matter this week. A conversion scheme seems likely, which would see existing community rights converted into UK trademark and design rights. Such a system would be necessary in order to prevent unnecessary barriers to trade, a stated aim of Mrs. May. However, the uncertainty may lead future applicants to seek dual protection, which will have definite cost implications.

Unregistered design rights will also be subject to change. The current EU protection regime is likely to be replaced by the equivalent UK domestic UD protection, which is substantially different. The EU regime provides for only 3 years of protection from the first sale, whereas the UK UDR right is guaranteed for 10 years after first sale or 15 years after creation. On the other hand, the scope of protection is narrower in the UK, as it does not extend to surface decoration.

 

phofo*William Wortley is an IP professional based in Munich and London. He holds an LL.M. in Intellectual Property and Competition Law from the Munich Intellectual Property Law Center. William.d.wortley@gmail.com

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