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On the 23 of June, the nation will settle a question by referendum which has been rumbling in British politics for decades; should the country remain within the European Union or leave the organisation for its own path?

At this stage, the outcome of the ‘Brexit’ is far from certain and there is a sense of rising disquiet in the British business community as to the impact a common market exit will have on European trading activities.  The implications are potentially far reaching and leaving the EU will inevitably have ramifications for any business that uses Intellectual Property (IP) in their European trading activities.

It is difficult to predict what a potential Brexit would mean for the IP rights for British businesses but we can consider and assess the various potential outcomes on a speculative basis to ensure clients are as informed and prepared as they can be.

Effect on UK Rights

  • Exclusive UK IP rights will remain largely unaffected. The UK Intellectual Property Office (UKIPO) will continue to grant national trade marks, patents and designs which will have protection throughout the UK.
  • The UK will remain subject to the World Trade Organisation’s Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement, which requires all WTO member countries to adopt certain minimum protections for IP.
  • The UK is likely to remain a member of the European Patent Convention and the European Patent Office (EPO).
  • Copyright would be largely unaffected by Brexit. Much of the law relating to copyright is enshrined in domestic legislation which would remain the same.

Effect on EU rights

  • UK businesses currently benefiting from EU-wide protections for their trademarks and designs that were registered with the European Union Intellectual Property Office (EUIPO) may find that they no longer have protection in the UK. Therefore, unitary rights may need to be replaced with national rights or the UK Parliament may introduce new transitional IP rights.
  • Registered holders of EU trademarks and designs would need to consider whether a Brexit would revoke their IP rights completely if they are a business that predominantly operates in the UK and one other Member State (current RU legislation requires the rights holder to trade in at least two Member States to remain valid). If so, new registrations or transfers may be required.
  • EU Regulations on IP would cease to have direct effect in the UK and secondly legislation we have used to implement IP EU Directives may no longer apply under UK law. Although domestic legislation is already in place, we may need to introduce new measures to preserve certain EU Laws.
  • Licenses relating to EU IP rights may need to be renegotiated and special provision included to cover any transitional rights that may be required post-Brexit. Payment calculations for IP licenses and transfers may need to be adjusted to take into account the restrictions of EU IP rights.  The value of any securities held over IP may also be affected.
  • As with the value of IP licences, the value attributed to the existing IP portfolios of businesses will need to be adjusted to reflect the new UK-EU trading arrangements and the restricted reach of existing EU IP rights.

What should I be thinking about now?

  • Are my existing licensing arrangements ready for a Brexit? If the UK leaves the unified EU schemes, do my existing licences contemplate transitional or successor rights in the UK?  If not, you should be ready to make amendments to these licences and should think about including appropriate provisions in new licences.
  • For those buying or selling a business, what would be the potential impact of a Brexit on the value of the target’s IP portfolio, the target’s IP licences and on any security granted over the target’s IP rights?
  • For those with registered intellectual property rights (or contemplating registration) do I need to make any changes to my filing and management strategy to ensure my unitary IP rights would be protected in both the EU and UK after the Brexit?

Until the outcome of the referendum is known, the best strategy is to prepare for a range of outcomes.  To ensure that you and your business are as prepared as possible, speak to the Commercial team at Mincoffs Solicitors LLP, on 0191 281 6151 or email ahall@mincoffs.co.uk.

 

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