Brexit/Intellectual Property

Changes to legal frameworks for copyright, trade marks, design rights and patents could result from Brexit.

In general, disruption is worse for patents, designs and trade marks than for copyright and neighbouring rights, and Database Rights. This is because the first three have been harmonised to a greater degree, through regulations, and EU-wide rights now exist that will have to be guaranteed in some way. Changes may also disrupt business structures, who may need to adapt in order to protect their rights in the same ways as they do today. Copyright on the other hand is less harmonised and remains a set of separate national rights.

Arnold, Bently, Derclaye and Dinwoodie conclude that:

there are a lot of uncertainties for the rights of both British and EU citizens and companies. Transitional periods and arrangements are necessary to safeguard many of the rights acquired prior to the date of Brexit. In addition, the EU IP acquis that has become embodied in national law may take a long time to disappear because of the sheer amount of EU law in all the different areas, not just IP, that the UK Parliament will have to discuss and amend.

Brexit White Paper

While the government’s Brexit White Paper is largely silent on the intention of the government for the future of these systems, it is a reasonable working hypothesis that they will separate from the EU acquis, causing both disruption and opportunities for both systems to diverge. The White Paper acknowledges that:

8.36 A range of cross-cutting regulations underpin the provision and high standards of goods and services, maintaining a positive environment for businesses, investors and consumers. … EU-wide systems facilitate the protection of intellectual property.

8.37 As we leave the EU, the Government is committed to making the UK the best place in the world to do business. This will mean fostering a high quality, stable and predictable regulatory environment, whilst also actively taking opportunities to reduce the cost of unnecessary regulation and to support innovative business models.

Thus the government appear to be signalling that in this and many other “cross cutting” areas of regulation, they will look for areas to deregulate.

Copyright

New changes, including geoblocking

While geoblocking may be removed for EU customers of streaming services, this would need to be preserved through any trade agreement after Brexit.

Any changes that result from the current Copyright in the Digital Single Market Directive, including proposals for copyright filtering (article 13), and the publishers’ right (article 11) could similarly fall into a pool of legislation that may not be required under the Great Repeal Bill.

Exceptions

Currently, copyright exceptions are limited to those available under the Information Society Directive. if the UK is no longer subject to this restriction, it is possible that the UK could opt to introduce more flexible copyright, either through creation of new exceptions, or else through fair use. These strands of thought were evident in the discussions surrounding the Gowers Review and the subsequent Hargreaves Review, both of which opted for limited extensions of exceptions, as the only way forward within EU law.

Nevertheless, changes to exceptions are a matter of controversy and resistance for copyright lobby groups.

European and British traditions

The differences of emphasis between the UK and continental traditions has been one reason for relatively slow harmonisation of copyright. Removing the UK element of difference could lead to more efforts to bring together approaches on moral rights, for instance.

Database Rights

These are already transposed into law in the UK Copyright, Designs and Patents Act 1988.

Trade marks

EU Trade Marks

EU Trade Marks exist as a result of the EU Trade Mark Regulation. Updated in 2015, the regulation creates an EU-wide trade mark, which can be registered through the EU office in Spain:

An EU trade mark shall have a unitary character. It shall have equal effect throughout the Union. It shall not be registered, transferred or surrendered or be the subject of a decision revoking the rights of the proprietor or declaring it invalid, nor shall its use be prohibited, save in respect of the whole Union

The consequence of this is clear:

UK businesses exporting to and selling goods and services in mainland Europe would have to consider filing national trade mark or design applications in their home market and EUTMs or RCDs to cover the European Union. Similarly, businesses wanting to obtain trade mark or design protection in the UK would need to add the cost of obtaining national protection as part of their filing strategy.

Not all trade marks are European Trade Marks of course. They are particularly attractive for multinational businesses.

Marks that are currently registered as EUTM will need to continue to apply in the UK. There are many different ways to do this, which range in complexity and administrative cost. Schemes that require re-registration of marks would create a heavy workload, for instance.

As Arnold et al explain, the separation of UK and EU rights will create problems for British companies or subsidiaries that use EUTMs in the UK. In particular, it would become much harder to launch new trade marks through the UK, as this would not count as European usage of the mark. Trade marks must be used within a continuous period of five years in order to be protected, unless there is a “proper” reason.

These types of uncertainties will be most acute for UK based EUTM owners, who are most likely to fit the profile of operating first in the UK with a view to future expansion on the continent. Therefore, it would serve their interests if there was a transitional period (beyond the already-existing five years from registration) to enable British EUTM holders to maintain the EUTM by making some use in the (Britain-less) EU. Of course, owners from other Member States who have used their EUTMs only in their home country but not in the UK will have to make reciprocal plans to retain protection in the UK

Patents

The patent system has been a source of contention for digital activists, particularly where the prospect of software patents was raised at the European level in 2004-5. In subsequent years, there has been worry that the centralisation of the European Patent system could lead to a reintroduction of software patents through a more unified legal system.

The European Patent system as a whole is not fundamentally threatened by Brexit, and nor is UK participation in it. That said, Brexit represents a potential barrier to centralisation. Although the new single patent and single court are not a matter of EU law, but a separate international agreement, it does refer to EU law and create a role for the CJEU. Thus:

[i]f the UK Government adheres to its political position that the UK will not in any way be subject to EU law and the Court of Justice, then Brexit will likely exclude the UK from that scheme because of the possible reference to EU law.

The unitary patent and single patent court are also threatened by the non-participation of the UK, as the treaty requires our involvement. Despite the potential problems with CJEU involvement in the patent court system, the UK confirmed that it would ratify the agreement in November 2016.

Design rights

Design rights are less important for digital rights in general, but do have particular impacts on technology.

because there is a greater concordance between the relevant prior rights for UK and EU design applications than between UK and EU trade mark applications, there has been a more substantial drop off in national design registrations since the EU system was established. Because a far greater proportion of design rights are now pursued at the EU rather than UK level, the scope of protection problem may in some respect be more acute

the provisions of UKUDR and CUDR are not the same – UKUDR’s excluded subject-matter, protection requirements, and infringement test are different. So while the UKUDR will fill the gap to a large extent, some of the good aspects of the CUDR will be lost unless we change our law to include them in the UKUDR

References

Arnold, Richard and Bently, Lionel A. F. and Derclaye, Estelle and Dinwoodie, Graeme B., The Legal Consequences of Brexit Through the Lens of IP Law, (February 15, 2017). Judicature, Vol. 101, Nr 2, Forthcoming; Oxford Legal Studies Research Paper No. 15/2017; University of Cambridge Faculty of Law Research Paper No. 21/2017.