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Brexit – Intellectual property after the Brexit transition period

Mayer Brown
22/12/2020
Related People:  Alistair Ho, Trainee Solicitor at Mayer Brown

Whilst the UK left the European Union (“EU”) on 31 January 2020 (“Exit Day”) it remained within the EU’s legal framework during the Brexit Transition Period (“Transition Period”). When the Transition Period ends at 11:00 p.m. GMT on 31 December 2020 (“Completion Day”), a suite of IP-related statutory instruments (as amended) (“IP Regulations”) will come into force, which amend the UK’s intellectual property (“IP”) regime to reflect the end of the Transition Period.

Businesses will need to review their IP portfolios and consider whether any action must be taken to ensure that necessary protections are maintained in the UK and the EU after the Completion Day, such as obtaining European Economic Area (“EEA”) rights holder permission for parallel exports to the EEA, or transferring EU domain names to EEA entities.

Trade marks

Registered EU trade marks

From Completion Day, the UK intellectual Property Office (“UK IPO”) will create a comparable trade mark for each EU trade mark (“EUTM”) which is existing and valid at that time. The comparable trade mark will mirror the original EUTM’s filing and registration dates, preserving the mark’s seniority. The comparable trade mark, as a national UK trade mark, will need to be maintained as such under the UK IPO’s authority.

Pending EU trade marks

For EUTMs which are still pending as at Completion Day, the owner of the EUTM application has a nine-month window (up to and including 30 September 2021) in which they can apply for a UK trade mark that, if granted will have the same filing, priority and seniority date as the EUTM. New EUTM applications will likely be pending at Completion Day and it is therefore recommended to dual file in the EU and UK if protection in both is required.

Expired EU trade marks

EUTMs which expire within six months prior to Completion Day will be treated as expired comparable UK marks. If the EUTM is renewed by a late renewal application with the EU Intellectual Property Office within the relevant grace period the comparable UK mark will be automatically renewed as a result.

The UK Government has published detailed guidance on EU trade mark protection and comparable UK trade marks from 1 January 2021.

Patents

Patents will be relatively unaffected by the end of the Transition Period, as the European Patent Convention (“EPC”), which governs European patent applications is not EU legislation. As such, European patent applications will continue to include the UK as one of up to 38 designated jurisdictions post-Completion Day. National UK patents and patent applications will be unaffected.

Attempts to create a single EU-wide unitary patent and Unified Patent Court (“UPC”), which would determine patent disputes on an EU-wide basis, are on-going. However, the UK Government confirmed that it will not become a member of the UPC.

Copyright

Most UK copyright works will still be protected in the EU and the UK because of the UK’s participation in the international treaties on copyright. For the same reason, EU copyright works will continue to be protected in the UK. This applies to works made before and after the end of the Transition Period.

Certain EU cross-border copyright arrangements, will no longer apply after Completion Day, with a range of consequences, particularly for cross-border content providers such as UK broadcasters and video on demand services previously benefitting from the country-of-origin principle for distribution within the EU. As such, businesses will need to assess how they use their copyrighted materials and determine whether this will be affected by the end of the Transition Period. 

UK databases will no longer qualify for sui generis protection in the EEA, a right which protects the content of databases where there has been substantial investment in obtaining, verifying or presenting the data (irrespective of originality as required by copyright). While database rights in existence before Completion Day will continue to exist in the UK and EU for the rest of their duration, UK owners of databases created in the UK after the end of the Transition Period will only receive databases rights in the UK and will need to consider whether they can rely on alternative means of protection in the EU, for instance licencing agreements or copyright.

The UK Government has announced that it will not implement the Directive (EU) 2019/790 on Copyright in the Digital Single Market and has instead proposed the Online Safety Bill. Though there is some overlap, it is expected that there will soon be divergence between the copyright regime in the UK and the EEA.

Designs

Registered designs

Registered European Community designs, similarly to trade marks, will be treated as if they were national designs registered under the UK Registered Designs Act 1949. The comparable UK designs will have the same renewal dates and take the same filing and priority dates as the underlying European Community designs.

Unregistered designs

Unregistered Community Designs (“UCD”) existing before Completion Day will automatically take effect in the UK as a UK continuing unregistered design on Completion Day and continue to be protected in the UK for the remainder of the three year term attached to it.

A new UK unregistered design right called a “supplementary unregistered design” will be created which mirrors the protections of a UCD, with the same three year protection period. This new type design right will sit alongside and overlap with the existing UK regime for unregistered design rights.

Notably, after Completion Day, first disclosure in either the UK or EU, which establishes unregistered design rights, may destroy the novelty in that design and so prevent a claim of unregistered rights in the other. How, when and where designs are first disclosed should be considered carefully.

Licence agreements

Existing licence agreements may include a definition of licensed territory as referring to the EU or EEA. Depending on the wording of the contract this may be construed as at the date of the licence agreement or as construed from time to time. As a result, business might need to update the territorial extent of the licence agreement to expressly refer to the UK.

Exhaustion of rights

Exhaustion of IP rights occurs in the EEA when a genuine IP-protected good is placed on the market anywhere in the EEA, by or with the right holder’s permission. Once this occurs, the IP rights holder cannot prevent the movement of those goods (“parallel goods”) within the EEA.

Goods marketed pre-Completion Day

IP rights exhausted in the EU and UK before Completion Day shall remain exhausted in both jurisdictions.

Goods marketed post-Completion Day

Parallel imports into the UK from the EEA will be able to continue unaffected as goods placed on the market in the EEA by, or with the consent of the right holder, will continue to be considered exhausted in the UK.

However, this decision has not yet been reciprocated by the EU, and it remains unclear whether IP-protected goods placed on the market in the UK by, or with the consent of the right’s holder, will be considered exhausted in the EEA. UK businesses may, therefore, need to obtain the consent of the EEA right holder to export such goods to the EEA. UK businesses should check whether they currently export IP-protected goods to the EEA, determine if rights’ holder permission is required for those exports and assess how their operations may be affected following Completion Day. 

Domain names

EU top-level domain names (.eu, .ею and .ευ), owned by non-EU citizens or persons/organisations not established in the EU/EEA, will be suspended on 1 January 2021 (see our client alert). Certain EU Member State domain names have EEA residency requirements, such as .fr (France), which may prevent UK businesses from applying for EEA domain names after Completion Day.

UK businesses should review their EU domain names and consider how they will meet the eligibility requirements at the end of the Transition Period, for instance by transferring the affected domain names to an EEA-based subsidiary.