26 April 2016

BREXIT: Possible Implications for UK IP Rights

Unless you have been hibernating in a cave over the winter months, you will be aware of the crucial EU referendum vote taking place in the UK on 23 June 2016, which will determine whether the UK remains in the European Union or leaves (Brexit).

The battle lines have been drawn between the two sides and the official campaigns have now begun with David Cameron fronting the ‘In’ campaign and Boris Johnson leading the ‘Out’ campaign, both fighting for pole position. The news agenda has been primarily dominated by talk of the implications regarding immigration and funding – issues that touch the hearts of the general public – but little has been discussed in regards to UK IP rights if a Brexit is to occur. This short article will look at the interesting potential consequences for UK businesses vis-a-vis their intellectual property rights across the EU and highlight what businesses should be thinking about as to how to best protect themselves in the wake of a so-called Brexit.

It is important to note that if there is a vote to leave the European Union the transition will not occur overnight. There will be a legal process whereby the UK will be obliged to officially notify the European Council of its decision to retract its membership status and negotiations will get underway in order to reach an agreement between the EU and the UK for a withdrawal of the EU treaties that bind them together. Failing to reach a mutual agreement, the UK will not be withdrawn from the EU until two years have passed since the official notification to the European Council. However, with the complexity of the relationship between the EU and the UK in mind, if a failure to agree terms occurs, this two year period will undoubtedly be extended until such an agreement is reached. In the meantime it is highly likely that transitional provisions will be put in place in relation to UK IP rights already in use.

The first thing to stress is that even in the event of a Brexit, there will be absolutely no ramifications for UK national patents or any other IP rights obtained through the United Kingdom Intellectual Property Office (UKIPO); including registered trademarks and designs. Things could be different for pan-European patents, however any obtained through the European Patent Office (EPO) will not be affected. There is a popular misconception that the EPO is governed by the EU which it is not, it is actually governed by the European Patent Convention (EPC) which is not an EU institution. Several non EU member states are still members of the EPC, including Switzerland and Norway, and it is hotly anticipated that the UK will also remain. Therefore even if a British exit occurs, the current European patent system (which is governed by the EPC) will still be applicable to all UK patents; and businesses will still be able to be granted UK patents and European patents via the same system as they do today. British patent attorneys will also be able to continue representing clients before the European Patent Office (EPO).

The water gets a little murkier, however, when looking at the potential consequences for the UK in relation to the long awaited European Unitary Patent system which brings with it the Unitary Patent Court (UPC) and the Unitary Patent (UP): a patent granted and valid in 26 EU member states. The idea of the UP was conceived in order to cut costs, administration and the red-tape of filing and enforcing patents across various EU jurisdictions. The UP is designed to file a single application that will grant patent protection in all relevant states. It is worth noting that whilst this system may make sense for a cost-efficient alternative to filing separate applications in a number of jurisdictions the cost effective nature will be more relevant to big multi-national companies and not so much for SMEs who require a filing in only one or two member states. It is likely that SMEs will continue filing under the current system in any event.

A Brexit is seen by some as a threat to the introduction of the new UP system. For the system to come in to force it needs to be ratified by the three countries in which the greatest number of European Patents are validated, which includes the UK alongside France and Germany. If the UK was to leave the EU the fourth country in line would take its place, the Netherlands, and ratification could still go ahead. The UK’s position within the system if it repeals its EU membership status is still unknown. Many believe that it would have no place in such a system but all pointers lean to the fact that it may still hold some power. The government last summer announced that it had signed a lease for a suitable site for the London Branch of the new Central Division and the London Local Division of the UPC. However, the idea of any ‘power’ is all speculation at this stage and any ratification will undoubtedly take place after the results in June.

In conclusion, whether the UK votes to leave the EU or stay in come the summer, it is unlikely that any drastic changes will take effect immediately.  We would like to take this opportunity to reassure clients that, whether the UK remains in the EU or not, our Patent Attorneys will continue to be able to represent all clients at the EPO. UK membership of the EU will not affect our ability to file and prosecute European patent applications, and handle EPO oppsitions and appeals. We will remain a European business, and the services that we provide to our clients will remain unaffected. 

We will continue to report on any developments, however if you have any questions about this topic please contact your Attorney at Mathys & Squire for more information.