BREXIT - An IP Perspective

The Prime Minister recently announced that a referendum on whether the UK should remain part of the European Union or not will to take place on 23 June 2016. UK companies are now considering what ramifications an exit from the EU would have on many aspects of their businesses, including, intellectual property.

EU law has become an integral part of English law over the last 40 years. Whilst the UK has its own system of administering national intellectual property rights in the UK via the UK Intellectual Property Office (UKIPO) which deals with the registration of: trade marks, patents and registered designs, EU-wide mechanisms such as Community Trade Marks (to be known as the EU Trade Mark as of 23 March 2016) and Registered Community Designs (RCDs) are well established within the IP portfolios of many UK businesses.

Trade Marks and Registered Designs

Currently, UK businesses have a choice when registering their trade marks or registered designs. They can obtain national rights if they register their mark or design at the UKIPO and they can separately obtain EU-wide protection by registering at OHIM (to be known as the EU Intellectual Property Office as of 23 March 2016). Many businesses opt for the EU-wide method as it is a cost-effective means of obtaining protection in the UK and in the EU.

If the UK were to leave the EU, discussions would be required as to what happens to these Community protected marks and designs as to what extent they are effective and whether the rights are enforceable. This could mean that registrations become vulnerable, especially in the circumstances where use in the UK constituted the main proof of use in the EU.

In any event, the UK Government would need to legislate for substitute rights and appropriate transitional provisions. In particular, it would need to legislate for successor rights – perhaps through the conversion of the Community rights into UK law – or else UK businesses will be required to register through UKIPO and incur the resultant costs.

Having successor rights may result in difficulties for existing licenses, security over those rights and the enforcement of judgments and injunctions for those in proceedings. UK case law is likely to diverge from EU case law as UK courts will no longer be bound by the Court of Justice's and General Court's decisions.

Copyright

Copyright is essentially a territorial one, however, the development of copyright has been influenced by EU law such as the Copyright Directive, together with a number of international conventions which will not be affected in the event of a Brexit.

If the UK were to leave the EU, it is unlikely to have much of an effect on the right of copyright, as much of the law relating to copyright is enshrined in domestic legislation, namely: Copyright, Designs and Patents Act 1988. The UK could simply keep the current legislation. Over time, however, there may be a divergence between UK copyright law and EU copyright law, especially in respect of judgments given in the respective courts.

Patents

A Brexit would have a limited effect on existing patents or their effectiveness in the UK. This is because the European Patent Office (EPO) is not an EU institution. The EPO creates a single patent grant procedure. Effectively, when a patent has been granted by the EPO it is automatically converted into a bundle of national patents. Therefore, for a patent granted by the EPO to have effect in the UK is the equivalent to a national UK patent.  This would continue to be the case, following any Brexit.

However, the position is not so clear in respect of the proposed EU Unitary Patent, which proposes to implement a single EU-wide patent. If the Unitary Patent were ratified prior to the referendum in June, then in a similar manner to EU trade marks and registered designs, it is difficult to see how the Unitary Patent could have effect in the EU.

Another implication of a Brexit is that companies which manage Community registrations from the UK may have to change their practice, as UK lawyers and patent and trade mark attorneys will no longer have the right to handle applications and other proceedings in the EU Intellectual Property Office.

Vince Cable's Opinion

Mr Cable has been outspoken on a Brexit and its impact on businesses.  He believes that it will lead to "gross uncertainty, legal challenge and mess."

He also discussed the need to "strengthen" and update intellectual property rights, which are at "the heart of creativity." He said: "There needs to be the recognition that creative industries rest on intellectual property: it's crucial and needs to be protected."