Yesterday, the UK government published its latest White Paper setting out the future relationship between the UK and the EU after Brexit. In this blog we take a brief look at the implications for intellectual property (IP) rights.
Back in March 2018, the UK and European Commission announced that they had agreed a 'large part' of the Commission's draft agreement governing the UK's withdrawal from the EU and a revised draft withdrawal agreement was published with colour-coded text to highlight which provisions were agreed.
This draft agreement provided reassurance in relation to the continued protection of a number of IP rights, including EU trade marks (EUTMs) and registered Community designs (RCDs), although the precise details were still unclear. However, there were several key provisions concerning IP where agreement had not been reached. (For the details, see our blog here.)
As has been a recurrent theme in the various Brexit proposals of the last two years, there is little specific reference to IP in the 98 pages of this latest White Paper. However, there are a handful of partial answers to some of the outstanding issues in the IP field. There is also a general recognition by the government of the importance of IP rights and need for future cooperation when it states that:
"[IP rights] play an essential part in encouraging the universal benefits of innovation and creativity, as well as protecting the reputation of products and services and helping prevent consumers from being misled about the quality or provenance of goods. The high quality service offered by the UK’s rights-granting bodies and courts system help to make the UK one of the best places in the world to protect and enforce IP rights." (Paragraph 149.)
"Arrangements on future cooperation on IP would provide important protections for right holders, giving them a confident and secure basis from which to operate in and between the UK and the EU". (Paragraph 152.)
Geographical indications (GIs) provide registered products with legal protection against imitation, and protect consumers from being misled about the quality or geographical origin of goods. Significant GI-protected products from the UK include Scotch whisky, Scottish farmed salmon, and Welsh beef and lamb. GIs are also particularly important for many agricultural producers in continental Europe, for example those involved in the production of products such as Parmigiano Reggiano or Serrano ham.
In the March draft agreement, GIs were one of the few IP areas where agreement had not been reached. However, the White Paper now confirms that the UK will be establishing its own GI scheme after exit, which will go beyond the requirements of TRIPS, providing a "clear and simple set of rules on GIs, and continuous protection for UK GIs in the UK". The scheme will be open to new applications, from both UK and non-UK applicants, from "the day it enters into force". (Paragraph 38).
This position will be reassuring for many agricultural businesses in the UK and across Europe. However, while the White Paper indicates that there will be continued protection for UK holders of GIs under the system, it is not clear whether producer organizations will need to reapply under the new UK framework in order to secure equivalent UK protection. It is likely that the Commission will push for this protection to also be granted automatically to continental European holders of existing GIs.
The White Paper refers to the "long history of European cooperation on patents, which can be costly to enforce in multiple jurisdictions" (paragraph 150). It also refers to the UK's recent ratification of the Unified Patent Court Agreement (UPCA) in April 2018 (see our blog here). The government then answers the question many have been waiting to hear, which is that it "intends to explore staying in the Court and unitary patent system after the UK leaves the EU", although exactly what this means in practice is not yet clear.
The White Paper goes on to explain that the Unified Patent Court has a unique structure as an international court that is a dispute forum for the EU's unitary patent and for European patents, both of which will be administered by the European Patent Office and concludes that the "UK will therefore work with other contracting states to make sure the UPCA can continue on a firm legal basis" (paragraph 46).
It remains to be seen how the UPCA implementation will interact with the UK's post-Brexit arrangements. Because both processes, the implementation of the UPCA and Brexit, are ongoing and uncertain (with the former also facing constitutional challenges in Germany), there may be further shifts in direction as the practicalities start to bite.
This White Paper adds a few more pieces to the Brexit IP jigsaw puzzle but still leaves some significant issues out, including exhaustion of IP rights and copyright.
There are also significant questions as to how the proposed Facilitated Customs Arrangement (FCA) will interact with existing anti-counterfeiting measures. The White Paper makes it clear that the focus of the 'common rulebook' is on ensuring equivalent product quality standards and the White Paper explicitly excludes factors relating to marketing and labelling which do not relate to production and will be "most effectively enforced on the market". This suggests that factors relating to the consumer presentation of goods, including branding, will not be addressed in the arrangement.
At present, owners of unitary EU IP rights, such as EUTMs or RCDs, are able to apply for co-ordinated action by customs across the EU. Under this system, potentially infringing goods will be seized by the customs of any EU country at the point of entry into the EU. It is not clear how this system would operate under the FCA. If there are limited border checks between the UK and remaining EU, then the UK will become a legal channel by which goods which infringe IP rights in the EU, but not necessarily in the UK, can be moved into the EU while circumventing any EU customs actions that have been put in place by the rights owner. Alternatively, the UK would need to commit to check for and enforce EU IP rights when goods are entering the UK from outside of the EU, even if there may be no equivalent UK right that is infringed, which seems unlikely to be practicable.
From the perspective of rights owners, it is clear that businesses will need to ensure that their enforcement strategies in the UK are as reliable and as effective as those in the EU. Relying solely on the defensive curtain wall of "Fortress Europe" may no longer be enough.
We hope that the government addresses these remaining areas soon, as well as providing more details about those issues it has already agreed in principle, particularly surrounding the comparable UK rights after Brexit.