On 23rd June 2016 the UK public voted to leave the European Union. Despite the vote to leave the EU, the UK will continue to abide by EU laws until exit is finalized.

Before the process of leaving the EU can be put into motion, the UK will need to invoke Article 50 of the Lisbon Treaty. Once Article 50 is invoked, it is expected that the terms of exit will take around 2 years to establish.

During these next few months it will become clearer how the impact of leaving the EU will affect European intellectual property rights. Of particular significance will be whether the UK decides to join other trade agreements such as the European Free Trade Agreement, or be a part of the European Economic Area.

Finnegan’s attorneys are following developments during the Brexit negotiations and are considering carefully how these changes will impact our clients. We will continue to provide advice in all areas of IP and guide you through any changes that you may need to make in the future.

Below is a summary of the changes we can expect:

European patents

Nothing changes. The outcome of the referendum has no effect on the UK’s membership of the European Patent Convention (EPC). The European Patent Office (EPO) is not an EU institution and will still be able to grant European patents that can be validated in the UK.

Representation rights of British European patent attorneys before the EPO remain unaffected.

The Unitary Patent

When it comes into force, the Unitary Patent will be obtained from European patent applications prosecuted at the EPO. Within one month from grant of a European patent application, applicants will have a choice of either a European patent which can be validated in any of the 38 EPC member states, or a Unitary Patent which will provide patent protection in EU states that have signed and ratified the Unified Patent Court (UPC) Agreement, or a combination to cover those EU states (Unitary Patent) and other desired EPC states (European patent). Unitary Patents can only extend to EU countries so would not cover the UK. If you wish to obtain European patent protection in the UK, it will therefore be necessary to choose a European Patent and validate in the UK, the same as today. Alternatively, a national UK patent application could be filed at the UK Intellectual Property Office (UKIPO) alongside a European patent application at the EPO.

Representation rights of British European patent attorneys before the EPO remain unaffected, and so they will be able to obtain EU Unitary Patents, European patents and UK patents on behalf of their clients.

Unified Patent Court (UPC)

The UPC will have jurisdiction over Unitary Patents, and European Patents in EU states that have ratified the UPC Agreement. Accordingly, in its current form the UPC would not have jurisdiction over the UK if it left the EU. The UK designation of European patents would need to be litigated in UK national courts.

The UK leaving the EU does not prevent the UPC moving forward, but is likely to delay its implementation. Currently, the UK is required to ratify the UPC Agreement before the UPC and the Unitary Patent can come into force. If the UK leaves the EU, then Italy would be required to ratify the UPC Agreement in its place. There is speculation that the UK might ratify the UPC Agreement before it would leave the EU, and that there may be an amendment to the UPC Agreement so that the UK can still participate after leaving the EU. However, at this stage it is not clear what can and what will happen.

There is also a question over the whether the location of the Central Division in London would need to be moved. The UPC Agreement currently requires London to host the Central Division in charge of cases relating to human necessities, chemistry and metallurgy, which includes pharmaceuticals and medical device. Hence, any change in location would require an amendment to the UPC Agreement.

Although other UK legal professions may be affected, British European patent attorneys can still have full representation rights before the UPC in all Divisions. British European patent attorneys will also be able to apply to opt out and withdraw opt outs of European patents from the UPC jurisdiction on behalf of their clients.

UK patents

Nothing changes. The UK leaving the EU does not affect the European patent system, nor does it affect the UK as a party to the Patent Cooperation Treaty (PCT). Direct UK patent applications and PCT-UK national phase patent applications can still be filed at the UKIPO.

Supplementary Protection Certificates

Supplementary Protection Certificates (SPCs) are a form of IP that extends the protection of patented active ingredients present in pharmaceutical or plant protection products. These are national rights governed by EU regulations. Hence, if the UK left the EU it is likely the UK Patents Act would be amended or new UK legislation introduced to enable SPCs to continue in the UK. As things currently stand, until withdrawal from the EU is completed SPCs can still be applied for, and will continue to have effect in the UK.

European trade marks and designs

Until withdrawal from the EU is completed all European rights will continue to have effect in the UK.

Once the UK has left the EU, European trade marks and designs will not be effective in the UK. Whilst the UK forms its position independent from the EU it is expected that a transitional procedure will be negotiated which will enable EU trade marks and European Community designs to be converted into UK national rights.

Once the UK has withdrawn from the EU, applicants requiring protection of trade marks or designs in both the UK and the EU will be required to file two separate applications. Any holder of UK national rights and EU wide trade mark rights will need to make use of the mark in both the UK and the EU in order to avoid vulnerability to cancellation on the basis of non-use in the respective territories.

Currently courts in the UK use EU law and CJEU decisions to interpret trade mark and design legislation. Once the UK leaves the EU, it will no longer be necessary to interpret UK law according to EU jurisprudence.

Whilst the terms of Brexit are being negotiated we do not see that it is necessary to file both UK national and European applications to protect your IP, unless immediate certainty of rights in the UK is required.

UK trade marks

The decision to leave the European Union will have no effect on UK national intellectual property rights

Madrid protocol

The UK is a contracting party of the Madrid system independently of the EU. UK applicants will therefore continue to benefit from trade mark protection through the Madrid system even after Brexit.

Any European registration forming part of a bundle of rights is likely to be subject to transitional provisions allowing continuing protection in the UK, separate from any EU protection, as a designation of any existing Madrid trade mark registration.

For UK businesses looking to file International applications we would now recommend using a UK registration as the basis of your international protection.

Hague international designs

The UK is not a party to the Hague system for protecting designs, although currently protection can be obtained through an EU Community designation. If transitional provisions are put into place, the conversion of any of these EU rights into UK rights would only be able to create a national right, which would not form a part of the Hague registration.

The UK has been considering becoming a contracting party of the Hague system, and an impending Brexit may influence future negotiations.

Other matters for consideration
The terms of existing agreements and licenses should be reviewed to see if they have been drafted with the understanding that the UK would be covered by virtue of its membership of the EU. Agreements and licenses where scope is defined using the EU as a territorial description may be compromised by the UK’s withdrawal from the European Union.