European Union: Intellectual Property Rights In The EU Before And After Brexit

The forthcoming withdrawal of the UK from the European Union (EU), the process of which was launched earlier this year, poses important questions related to the effect of the so-called EU intellectual property rights with unitary effect. These are, for example, the EU mark, the EU design, the EU protected geographical indications, SPCs and others. The main issue raised in relation to BREXIT is whether the acquired unitary rights will be exercised on the territory of the UK after its withdrawal from the EU and, if so, under what conditions. For instance, how and on what legal basis the rights acquired under EU law will be enforced and protected in the UK, how will the renewal of their protection (e.g. on every 10 years for trademarks) be regulated, the related payment of renewal fees and other specific questions.

In September 2017, the European Commission (EC) published on its official website (https://ec.europa.eu) its position paper and outlined the basic principles on the impact of BREXIT on intellectual property rights with unitary effect which will be proposed to UK in the framework of negotiation of the terms of its withdrawal from the Union. The UKIPO also published on its official website (https://www.gov.uk) the UK government's position on the subject.

After carefully analyzing the UKIPO's position, the lawyers from Penkov, Markov and Partners are on the opinion that it has some differences with the position of the EC, although in their entirety both are setting the common goal of finding the best possible solution in securing the rights and interests of the right-holders. 'Penkov, Markov and Partners' have in common with the EC's opinion by considering that the Commission's proposals protect the interests of the holders of IP rights with unitary effect in the EU to a greater extent.

It is of utmost importance to provide legal means by which the unitary rights already acquired within the EU will continue to have effect for the UK territory after BREXIT. Otherwise, the interests of the owners of EU trademarks, EU designs, UK SPCs and other intellectual property rights would be seriously harmed, assuming that unitary IP rights would simply cease to exist after BREXIT for the territory of UK. This would result in a situation where other entities, most often competitors of the right-holders, or just traders acting in bad-faith, and by doing so often infringing IP rights, would benefit from the created legal uncertainty. In such a scenario the right-holders will have to apply anew on a general basis for IP registrations in the UK, which, in some hypotheses such in the case of the registered design, would be even procedurally impossible due to the applicability of international agreements (Paris Convention, etc.).

The EC therefore proposes not to undermine the protection already provided with registered EU trademarks, EU designs, or for any other exclusive unitary right granted before BREXIT. Therefore, their holders to be able to enforce them in the UK after BREXIT as well, i.e. to continue to rely on those IP rights and to seek judicial and administrative protection equivalent to the rights already provided under the EU law. The EC suggests that the UK should undertake to adopt specific national legislation for this purpose, in particular, the automatic recognition in the United Kingdom of the existing (on the BREXIT date) intellectual property rights having unitary character within the EU. EC suggests that the automatic recognition should not be associated with additional costs to the holders of unitary rights, acquired before BREXIT, and that any administrative formalities associated with this should be kept to a strict minimum.

With regard to the pending applications and procedures on the BREXIT date, the EC recommends that applicants should have the right to claim priority from EU applications for intellectual property objects having unitary character in order to obtain equivalent national intellectual property rights in the UK.

Especially for the SPCs the EC suggests granting of legal protection for the territory of the UK equivalent to that provided under EU law for each UK certificate issued within the Union before BREXIT. When a SPC application has been filed with the relevant UK national authority before BREXIT in accordance with EU law and the procedure is not yet completed the applicant should be entitled to receive a SPC with effect in the UK.

Regarding the protection of databases (with copyright and rights related to copyright), the EC proposal is that once the databases have already been protected before BREXIT their producers and right holders, within the meaning of Directive 96/9, should continue to benefit from the same protection in the remaining 27 member states and in the UK after the withdrawal. In this respect the EC put arguments that the restriction provided in Art. 11, Para. 1 and Para. (2) of Directive 96/9, according to which only EU persons/ entities enjoy protection under the sui generis right should be waived in respect of natural and legal persons from the UK. Accordingly, the expectation is that the UK also shall not exclude rights of protection for databases of EU natural and legal persons on the basis of nationality or place of establishment.

On the other hand the position of the UKIPO is that while the UK is a member of the EU the EU registered trademarks and designs will continue to have effect on its territory. When the UK leaves the EU, the unitary IP rights will continue to be valid in the remaining EU member states. After BREXIT businesses in the UK will be able to acquire EU trademark or EU design rights for the 27 member states on a general basis, and for UK territory through national applications for marks or designs submitted to the UKIPO, or using the Madrid International Trademark System. As regards the international design registration system, the UK government declares its readiness to accede to the Hague Agreement in the future. Currently, the protection for registered design in the UK cannot yet be obtained under the international system.

The conclusion is that the final decision on the legal effect of BREXIT on the scope of EU intellectual property rights with unitary character will be political one and will be included in the withdrawal agreement signed between the Union and the UK.

In view of the ambiguity of future UK regulation by the time the withdrawal agreement enters into force it would be advisable for the business to utilize the Madrid International Trademark System in order to ensure timely the provision of legal protection of their trademarks in the UK in addition to the EU trademark system, if interested in doing so.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.