Article 50 – what will change in Intellectual Property as a result?
28 March 2017 by Michael Downing
Theresa May recently gave notice to the EU under the now-famous “Article 50”. So what will this change in terms of intellectual property?
The simple answer is “nothing”. Article 50 is just the starting gun for the UK’s negotiations with the rest of the EU to reach a deal. That agreement will ideally deal with a number of open questions about intellectual property. If nothing is agreed by 29/03/2019 then the UK’s exit takes effect on default terms, which say nothing about IP.
Even the 2019 date is uncertain. The UK and the EU states can extend the deadline if they want to, but they do all have to agree on that. Theresa May has said that no deal is better than a bad deal, so is unlikely to extend it unless there is a good deal just within reach.
So what changes are we likely to see when the UK does finally exit the EU – whenever that is?
Trade Marks & Designs
The UK currently has two parallel systems for protecting trade marks and registered designs – a national system that grants protection for just the UK, and an EU system that grants protection for the whole EU albeit at a much higher cost to applicants. The national system will carry on as before. The EU system will also carry on, but we will not be members and so the EU rights will not extend to the UK.
There are of course a large number of EU rights that were applied for in good faith, thinking that they would cover the UK. (Equally, there are many EU rights that do cover the UK but where the owner has no interest in the UK market). So there will be some sort of transitional arrangement for all the EU trade marks and designs that are registered or pending. The main options under discussion at the moment are either, to do a wholesale automated import of all the EU cases onto the UK registers, or to allow owners of EU rights to apply for them to be re-registered in the UK. In the latter case, there might be an administrative fee, but it should be less than filing a new UK application as there will be no need to carry out any in-depth examination of the applications.
So, for the time being, we are advising all our clients to carry on filing EU applications as normal, and then deal with Brexit once the procedures are published. For the EU marks on our records, we will contact all our clients to let them know what needs doing, and when.
Even after we leave the EU, UK companies will still be able to apply for and own EU registered trade marks & designs, just as US and Japanese companies can now. The only difference will be that those designs won’t cover the UK, so after we exit, businesses that used to file EU applications will need to file EU and UK applications, rather than just EU applications. The additional cost will not be huge, and we will be working out a package deal for our clients when things are more clear, so watch this space!
Currently, the UK is a member state of the European Patent Office, the Patent Co-operation Treaty, and the Unified Patent Court (a single Court dealing with patent infringement disputes across the entire EU). We haven’t yet ratified the UPC agreement, but we have stated our intention to do so. The UPC is not yet in force, and cannot come into force until it is ratified by us and by Germany. So strictly speaking, in relation to patent laws & procedures, absolutely nothing is going to be changed by Brexit.
The EPO is not an EU institution so our leaving the EU will have no effect. We will still be full members of the EPO, just like Switzerland and Norway are now. The same applies to the PCT – we will still be members along with many, many non-EU states. The UPC is not yet in place, and after Article 50 its status will only become more uncertain. That’s no surprise for the UPC, though; the diplomatic discussions to bring it about have been going on for over 40 years already.
The UPC will have to be discussed in the UK’s negotiations. At the moment, it apparently cannot come into force, because only EU states can be members, and the agreement requires the involvement of the UK, France, Germany and Luxemburg. If the UK is not an EU state then the plan breaks down. Because of this, even if we ratify it (as promised), Germany is unlikely to ratify until the Brexit negotiations are complete.
The UPC also requires oversight by the Court of Justice of the European Union, meaning that there would still be a small area of law in which the CJEU had authority over the UK. This is a major sticking point for UK policy, so the UPC may need a thorough re-think.
Our expectation is that either the UPC will be abandoned, or the UK will end up outside it. This will be painted as a Bad Thing, and it probably will be unwelcome news for multinational companies who operate across the EU. For SME businesses in the UK, though, we think it will be a positive result.
What should you do to prepare?
First, don’t panic. Filing strategies do not need to change immediately. Carry on as before, although it would be prudent to try and keep patents in force across the whole EU where possible so that the UPC can be used, if it happens.
In time, we will need to revise trade mark and design filing patterns to cover both the UK and the EU in parallel, rather than together. We will also need to look at existing EU rights and consider whether to extend them to the UK.
We will be in touch with all our clients when the time comes. If you would like us to alert you in respect of an existing EU right then send us the details as we can record ourselves as “address for service”, put the case on our records, and we will then be able to contact you at the right time.
Downing IP work with companies across a broad spectrum of interests from SMEs to large organisations and multi-national corporates. We are an independent firm of patent attorneys and specialise in patents, trademarks and design protection.
If you have any questions about our intellectual property services or the affect "Article 50" might have on your business you can speak to our team of experts on 01494 422626 or email firstname.lastname@example.org.