Intellectual property: legal implications of Brexit for your business

Whilst clearly dependent on what form Brexit takes, the three main legal consequences of Brexit on intellectual property that businesses should be aware of are that:

• European Union Trade Marks and Registered and Unregistered Community Designs will cease to have effect in the UK.
• Unless the UPC Agreement is also renegotiated in parallel with the Brexit terms and post-Brexit trade arrangements, then despite initially joining the system in December 2017 the UK will no longer form part of the Unitary Patent and the Unified Patent Court once it leaves the EU.
• The exemption from copyright for copies made for purely private purposes, repealed in 2015 as potentially incompatible with EU law, could be reintroduced – meaning that anyone who copies their music and AV collections from CD to laptop or cloud (the majority of the population) would be back on the right side of the law.

These issues, and the wider consequences of Brexit for intellectual property, are considered in more detail below.

UK national rights

Brexit is unlikely to have any material effect on UK national rights. In the long run, UK courts may reach decisions on the scope of currently-harmonised rights (trade marks and designs) which differ from the Court of Justice of the EU case law, but this will be incremental over time.

The UK will remain subject to the WTO TRIPs Agreement and continue to participate in international treaties governing international recognition of rights.

The UKIPO will continue to grant national trade marks, patents and designs, while the UK will remain a member of the European Patent Convention and the European Patent Office. UK designations of European patents will remain effective.

EU-wide rights

Community Trade Marks, Registered Community Designs and Unregistered Community Designs are likely to cease to be effective in the UK. This could raise issues connected to deprivation of property for both UK and non-UK owners, and is likely to lead to some form of successor right being introduced.

The UK is unlikely to remain part of the Unitary Patent and Unified Patent Court, which will require the founding Agreement to be amended to remove the requirement for UK ratification before the court can start to function.  The scope of Unitary Patents will therefore also be affected, and successor rights effective in the UK may need to be introduced.

In the short term, Brexit is unlikely to affect supplementary protection certificates in the context of pharmaceuticals, which extend the protection given to a marketed product by a national patent. However, products authorised by the European Medicines Agency may cease to be legally effective in the UK. It is also unclear what the status would be in the EU, for SPC application purposes, of a marketing authorisation granted in a post-Brexit UK for a new product.

The value ascribed to businesses’ existing IP portfolios, either for balance sheet purposes or in the context of lending arrangements or investment rounds, would need to be adjusted to reflect the new UK-EU trading arrangements and the restricted reach of existing Community rights.

Effect on existing licences

Licences may need to be renegotiated to capture and protect transitional or successor rights.  The geographical scope, post-Brexit, of existing license expressed to cover the EU will need to be clarified: they may need to become “EU and United Kingdom” licences.

The restricted reach of Community rights could affect payment calculations.

Enforcement

Pan-EU rulings on IP infringement, including injunctive relief, are unlikely to be binding in the UK, while UK courts would no longer be able to issue pan-EU injunctions.

It is possible that future parallel imports from the EU could be blocked legitimately on the basis of UK IP rights, since a first sale in the EU would no longer exhaust these rights in the UK. Consumer prices for some products may rise as a result.