THE IMPACT OF BREXIT ON INTELLECTUAL PROPERTY
Published by the Chartered Institute of Patent Attorneys on February 23, 2017
1. EU Regulations, EU Directives and the CJEU
After Brexit, EU Regulations will cease to be applicable in the UK, as they only have effect throughout the EU of which the UK will no longer be a Member.
Directives that have already been implemented into UK law by primary legislation are likely to remain in effect unless the UK Parliament decides to repeal or amend the national laws that transposed them. The position of Directives that have been implemented by secondary legislation is unclear. Some commentators consider that these will survive, while others consider that they will fall when the empowering legislation, namely the European Communities Act 1972, is repealed.
The Court of Justice of the European Union (CJEU) will cease to have jurisdiction over UK matters and to be binding authority. In practice however, their decisions may still indirectly influence the UK courts. For example, the Boards of Appeal (BoA) of the EPO will continue to follow the CJEU rulings on the Biotech Directive and the UK Courts may continue to pay attention to the BoA decisions.
2. EPC, PCT and UK patents
The European Patent Convention (EPC) is not a piece of EU legislation and will be unaffected when the UK leaves the EU, as will representation rights of UK-based European Patent Attorneys, who will still be able to represent clients in all work before the EPO and European patent holders whose rights will remain unaffected. Patent Co-operation Treaty (PCT) applications will remain unchanged as the PCT is not an EU treaty. There will also be no effect on UK patents granted by the UK Intellectual Property Office (UKIPO).
3. Community Trade Marks, Registered Community Designs, Community Plant Variety Rights and Geographical Indications
A number of IP rights deriving from EU Regulations will no longer apply to the UK if we leave the EU, including those created under the Community Trade Mark (Regulation (EC) No 207/2009), Registered Community Designs (Regulation (EC) No 6/2002), Community Plant Variety Rights (Regulation (EC) No 2100/94) and Geographical Indications (Regulation (EU) 1151/2012). The continued validity of these rights in the UK is uncertain. Transitional agreements may be negotiated to allow time for rights holders to convert these into national rights or to file separate national rights. New applications can be filed as either EU or UK applications and it is likely that priority could then be claimed in the UK or the EU as needed. The decision to leave the EU will not affect holders of UK trade marks or design rights. The government has remained silent on whether or not it intends to implement the new Trade Mark Directive into UK domestic law.
4. Trade secrets, Data Protection and data safety
There will be no change for the holders of trade secrets as the UK is already exceeding the minimum standards specified by the EU Trade Secrets Directive (ref 2013/0402(COD)).
The Data Protection provisions are an involved mix of UK and EU provisions, further complicated by the informal notes of advice issued by the Information Commissioner. A particular area of potential concern will centre on the movement of data across borders.The UK has had a cyber security strategy in place since 2011, which is regularly reviewed and updated. It has also had formal data protection measures in place since 1988, which will continue.
SPCs were introduced in the UK through EU Regulation (EC) No 469/2009 (of 6 May 2009) but also have effect in relation to national patent rights including those deriving from European patents. CIPA anticipates that pending and existing SPCs will be unaffected. However, some modifications may be necessary, e.g the Marketing Authorisation (MA) on which the time period of the SPC is based is currently the first MA in the EEA but it could be argued that this should become the first UK MA.
6. Regulatory data protection (RDP)
RDP for pharmaceuticals in the EU is provided for by Regulation (EC) No. 726/2004 and Directive 2001/83/EC, as amended by Directive 2004/27/EC (implemented in the UK inter alia via the UK Medicines Act). This regime applies to EU marketing authorisations applied for from November 2005 (and national applications from October 2005). Prior to this the duration of RDP was not harmonised within the EU, with a 10 year RDP period for MAs filed via the centralised procedure, and either 6 or 10 years, depending on the Member State, for MAs filed via the national or mutual recognition procedures.
Following Brexit, we expect that, at a minimum, the UK will continue to provide RDP at the existing level. A major consideration will be whether RDP commences from the date of the first MA in the EEA or the first MA in the UK. There may be the potential to enhance RDP protection in a separate UK system, for example in relation to the criteria for obtaining additional RDP for a new indication, or the duration of the protection.
7. Orphan Drug exclusivity
EU Regulation (EC) No 141/2000 provides incentives and rewards for developing medicines to treat rare diseases, and is currently in effect in the UK. It permits 10 years market exclusivity with respect to similar medicines for similar indications, and therefore has a broader scope than RDP.
The Commission is currently undertaking a review of the concept of ‘similarity’ and while still a member of the EU the UK is able to input into this review. The duration of ODE is determined by the date of first marketing approval for the orphan indication in the EU. It is expected that at least in the short-medium term any separate UK legislation would be based on the current EU regulation, unless and until the UK ultimately introduces a national system for approving orphan drugs.
The UK will continue to protect copyright (including existing copyrights) in accordance with the Berne Convention. Copyright is in general not subject to EU harmonisation and no changes to copyright law are expected as an immediate consequence of exit from the EU. However, EU competition law impacts on how copyright works (including digital content, broadcasts and films), are licensed and exploited within the EU and there could be some changes there when the UK is no longer subject to EU competition law.
9. The Nagoya Protocol
CIPA has previously expressed its concerns about the damaging effect that EU implementation of the Nagoya Protocol to the Convention on Biological Diversity may have on UK science in general and particularly on important biological research that may be conducted in the public interest in the UK.
The EU has implemented these requirements through Regulation 511/14. The intention of this Regulation is to ensure lawful use of genetic resources in accordance with the Protocol. However, CIPA believes that the obligations it imposes are unclear and onerous. In particular the criminal sanctions for breach of the Regulation in the UK are disproportionate and unnecessary. If imposed at all, they should only be for flagrant and deliberate violations of the Regulation.
Leaving the EU offers the UK the opportunity to alter the implementation of the Protocol in the UK. CIPA therefore proposes that the UK Government should consult with the user community in the UK before introducing an amended implementation of the Protocol, specifically:
• a)there should be no criminal penalty for inadvertent or unintentional breaches, and,
• b)the three month time-limit on unsanctioned research vital for public health should be extended and, in the longer term, the UK Government should negotiate to adjust the Protocol so that provider countries lose their power of veto over such necessary research.
10. UP and UPC
The Unified Patent Court (UPC) Agreement  is a pan European project involving some but not all EU states. At the Competitiveness Council meeting on 28 November 2016, the UK Minister of Intellectual Property signaled the UK government’s intention to continue with preparations to ratify the UPC Agreement such that the UK will be a member of the UPC when it comes into operation, possibly as early as 2017. Only ratification by Germany will be needed for the Agreement to come into force.
For the UK to continue participating after Brexit, there would need to be a new international agreement with the participating Member States and the UK to provide compatibility with EU law. Amendments to the UPC Agreement will also be necessary. In addition, there may still be significant political difficulties to overcome in both the UK and continental Europe in order to achieve this.
If the UK does not remain a member of the UPC, there will need to be provisions for changing the location of the London Central Division’s seat in London and there will be a need for further transitional provisions to protect any rights acquired or cases in progress at the time the UK leaves. It is still unclear whether UK European Patent Attorneys will be able to represent parties in the different Divisions of the UPC after Brexit.CIPA has a strong preference for the UK to participate in the UP and UPC system, if a solid legal basis for this can be agreed.
11. IP Transactions
The UK continues to be a good venue for IP transactional work, with highly qualified, skilled and experienced legal professionals. The law of England and Wales will continue to be a favourable governing law for IP transactional agreements. Business continues as usual, and the English courts can still be specified with confidence as the forum for any disputes.The UK has an enviable track record in technology transfer. The highly successful Lambert Toolkit of templates-currently being updated- helps to facilitate agreements between UK universities and business.
12. Parallel imports & exhaustion of rights
The position may change following Brexit depending on the precise arrangement reached. If the UK leaves the EU without joining any other Agreement (e.g EEA or EFTA), the existing rules on exhaustion of rights will cease to apply.This is a complex area and CIPA is working with stakeholders to achieve the optimum position. There is a possibility this could lead to a more advantageous regime for rights holders.This matter is significantly complicated by the Irish border problem, namely whether the border between Northern Ireland and the Republic becomes a soft or hard border with inspection of all commercial traffic after UK exit.
13. IP tax relief
There will be no change for companies claiming UK corporation tax relief via the Patent Box scheme on the profits they make from patented inventions. There will also be no change to research and development tax credits.