LawFlash

Brexit: IP Considerations in Light of the UK’s Vote to Leave the EU

Intellectual Property LawFlash

June 24, 2016

While the “Leave” result of the June 23 referendum will not have an immediate impact on intellectual property, the eventual British exit (“Brexit”) from the European Union could have long-term implications for IP protection and filing decisions in Europe.

On June 23, the United Kingdom voted in favor of leaving the European Union, raising questions by IP rights holders about the impact the vote and eventual UK withdrawal from the EU will have on their IP rights and patent filings.

For now, the UK is still a Member State of the EU, and all the legislation that gives effect to EU law is still in place. Once the UK officially notifies the EU of its intention to exit the EU, the UK government will have a two-year period in which to negotiate the withdrawal of its membership. In the meantime, below is a summary of the potential implications for utility patents, trademarks, and registered designs that may result from the referendum.

Utility Patents

The Brexit will not impact granted, pending, or to-be-filed patent applications in the UK, whether filed directly in the UK or filed through the European Patent Office (EPO) and validated in the UK. Because the EPO is an international organization established by a multilateral treaty—the European Patent Convention—it will still be possible to obtain a patent in the UK through current procedures at the UK Intellectual Property Office by way of the EPO, directly or through the Patent Cooperation Treaty (PCT). In effect, the UK would have a status similar to that of Switzerland, Norway, and Turkey (which are not members of the EU but are members of the EPO), and validation of granted EP patents in the UK would remain available to patent applicants.

The UK’s exit from the EU may have an impact on the proposed EP Unitary Patent System (UPS) and Unified Patent Court (UPC). The UPS would create a European patent with unitary effect that is examined and granted by the EPO like a classical European patent but enforced by a new, centralized court system—the UPC. The remaining EU Member States may reconsider the framework and details of the UPS and the UK’s participation in the UPS.

Trademarks and Registered Designs

The implications of the Brexit on existing EU trademarks and registered designs (the EU equivalent of US design patents) are not yet clear, and there is expected to be some mechanism for owners of rights under the EU trademark and design system to retain the benefit of those rights in the UK after the exit from the EU. In other words, there is no cause for alarm at this time.

Currently, only EU Member States are covered by the European Union Trade Mark (EUTM) system, which means that, absent a change in that system, EUTM registrations would cease to apply in the UK following the Brexit. The relevant laws and regulations are expected to be updated, and new ones enacted, to allow brand owners to retain UK rights in the trademarks covered by their EUTMs, likely by allowing EUTM owners to convert their EUTMs to national UK registrations that benefit from the priority dates in the EUTMs while still maintaining the EUTMs as they apply to the other EU Member States.

One consequence of the UK no longer being part of the EU Trade Mark System is that UK trademark use will no longer be sufficient to support EUTMs that are not used in any other EU Member State, so those EUTMs will become vulnerable to non-use cancellation. The Brexit could also create new issues affecting trademark owners’ rights to limit or control cross-border shipments of their branded goods between the UK and the other EU Member States. 

Similar issues apply to Registered Community Designs (RCDs). In particular, absent a change in the current system, RCDs will no longer extend to the UK, but there will likely be procedures put into place through which RCDs can be partially converted to provide protection on a national level in the UK while remaining valid in the rest of the EU Member States.  

Given that the Brexit will not be effective for at least two years from the date the UK notifies the EU of its intention to exit (which may not happen right away), there is no need to take any steps immediately for trademarks and designs covered by existing EUTMs and RCDs respectively, or to take any different approach with respect to new applications being filed. If the UK is important to your business, however, you may wish to consider filing UK national applications along with any new EUTM/EU RCDs—if only to avoid the time and expense of converting later if that becomes necessary.  

Conclusion

Intellectual property right holders in the UK and EU need not take immediate action regarding IP in the UK as a result of the June 23 referendum. No current rights have been lost, the utility patent filing framework has not changed, and there will likely be provisions for continuity of protection for existing trademarks and registered designs. However, going forward, filing strategies for trademarks and registered designs that specifically include protection in the UK should be considered.

Resources

For more than three decades, Morgan Lewis has represented companies and institutions doing business in the United Kingdom and globally. Our Brexit team of lawyers have been advising clients on a variety of legal issues in the run up to the decision and are assessing the complex short- and long-term implications of the June 23 vote. Our Brexit Resource Centre will continue to provide guidance on the legal and business implications of the United Kingdom’s decision to leave the union. To view this alert and others, and to gain immediate access to our most recent guidance on Brexit, please visit the Brexit Resource Centre. In addition, please feel free to speak to your usual contact at Morgan Lewis or to contact any one of the Brexit Team via Brexit@morganlewis.com.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Boston
Joshua M. Dalton
Rachelle A. Dubow
David O. Johanson

Chicago
Christopher J. Betti
Sanjay K. Murthy

Houston
Rick L. Rambo

Palo Alto
Dion M. Bregman

Philadelphia
Louis W. Beardell, Jr.
Kenneth J. Davis
Eric Kraeutler

San Francisco
Jeffry S. Mann

Santa Monica
Richard de Bodo

Washington, DC
Karen A. Butcher
Jeffrey G. Killian
Robert Smyth