Thursday, 30 June 2016

Brexit and IP: a few random thoughts

Everyone in the IP community seems to have something to say about Brexit, the impending departure of the United Kingdom from the family of European Union Member States (we've listed below a number of comments and discussions that seemed good to us, but there are plenty more around). Not to be left out, and to help focus the mind, here are a few very brief observations from our own Isak Unfors:

Independence -- but at the cost of control 

It is commonly agreed that international harmonisation of IP law is beneficial.  On a global level as well as within Europe, IP law is one of the legislative areas that enjoys the highest degree of harmonisation. Even so, many substantive legal differences remain at national level, in terms of scope of infringement, recovery of damages, availability of injunctive relief, the ability of a party to obtain a stay of infringement proceedings while validity is established, as well as issues of ownership and rights in transactions.  

Each group of stakeholder wants its interests to be fulfilled on the widest basis, through the conclusion and implementation of international agreements. This being so, the departure of the UK from the EU will have the effect of isolating stakeholders there, since they will be operating within a separate entity which is much less powerful in establishing and imposing normative IP rules than is the EU as a whole.  Instead of influencing how EU negotiates international (and regional) terms, the UK now has to take on the world. In IP matters, the UK’s formerly influential position as a leading IP power within the EU be weakened as a result of independence from EU.  In immediate practical terms, the UK will be on the outside of the Unified Patent Court (UPC) system, and will continue to have correspondingly less influence in matters concerning its structure and function.

On the subject of the UPC, it is well known that the UK has occupied a central role in the development of the UPC system, being one of the 13 countries to ratify it and with London as the prized location of one of its specialised courts.  Brexit is almost certain to delay the implementation of the UPC system and some maintain that it will prevent the UPC becoming operational at all.

Free movements of goods and exhaustion of rights

At the point at which UK leaves the European Economic Area, it will by definition leave the “single market” to which IP rights exhausts if products are sold with IP owners' consent. This will have an effect on trade balance with EU (which currently is the largest market for UK), both in terms of import and export.

Harmonisation of case law

Even though the UK may opt to continue to apply those EU directives that currently govern IP law, there is still a likelihood of divergence of legal outcomes as reflected in precedental case law. The British courts would not be bound to apply or indeed interpret EU case law, including influential rulings of the Court of Justice of the European Union.  Inconsistency is highly likely occur, giving British courts greater power over what might be seen as legislative or political matters -- but also creating greater uncertainty for IP owners who find that the same rights in the same inventions, brands and designs are treated quite differently when disputes cross the English Channel.

Here's a selection of links to Brexit-related literature that you may wish to peruse:

"IP and 'Brexit': too much uncertainty and the devil you know", World Intellectual Property Review

"Even in the case of a Brexit, UK may join Unitary Patent System", Kluwer Patent Law Blog

"Brexit and Intellectual Property Rights", Ant-Like Persistence

"What would BREXIT likely mean for IP in Africa?", Afro-IP 

"How will Brexit affect your intellectual property rights?", The Fashion Law

"Impact of UK's Brexit for Intellectual Property Rights", The National Law Review

Law firm posts:

Freshfields (here and here), Olswang (here), Bird & Bird (here)

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