Tuesday, 23 August 2016

Brexit and patents: yesterday's news or tomorrow's problem?

"The impact of Brexit on intellectual property" is the title of a paper released last week by the UK's Chartered Institute of Patent Attorneys (CIPA) --the largest and most influential body of IP practitioners in exit-bound Britain. The basic message can be simply interpreted as follows:

  • In the short term: no change
  • In the medium term: maybe a little change
  • In the long term: perhaps a little bit more change, and likely for the better.

In the short term, since the UK government won't be pulling the Article 50 trigger, which starts the minimum two-year negotiation period which may be extended, before the end of 2016, the UK will be exactly where it is until at least 2019.  

Beyond that, the UK's current intellectual property rules and those laws that affect IP without being part of it (eg competition law, data protection, regulatory data rules) won't change until Parliament takes steps to change them -- and it is the generally held view of innovation commentators that these areas of law aren't even close to the top of the government's "must-change" list.  It's actually the things that aren't going to change which are of greater note: the system for litigating patent disputes will not now be manipulated so as to accommodate the impending Unified Patent Court (UPC) -- though CIPA, which supports the UPC, will be working to seek ways of integrating the UK into this intriguing and untried patent litigation forum.

In the long term, who knows? If the system is working well post-Brexit, there will be no specific reason to make changes.  The UK's tax regime may compete more aggressively with those of the European Union's remaining Member States, in the form of a bigger Patent Box [the European Commission's take on an early version of the UK Patent Box was that it constituted a 'harmful tax practice'; in any event the UK will have to comply with the OECD's BEPS provisions].

Other points of interest in the CIPA paper include the following:
"... There will be no change for the holders of trade secrets as the UK is already exceeding the minimum standards as specified by the EU Trade Secrets Directive. There is no need for the UK to implement the directive and there may be advantages in terms of greater legal certainty from not implementing it. The UK has had a cyber security strategy in place since 2011, which is regularly reviewed and updated ...

... A great deal of work needs to be done to ensure that laws enacted during the UK’s membership of the EU are fully reflected in UK law after Brexit. Constitutional experts believe that the sheer volume of parliamentary time required to re-enact more than 50 years of EU law by individual Act of Parliament means that most will be re-enacted en masse by UK Regulation. CIPA will press the Government for such action in relation to IP rights ...

Supplementary protection certificates ... were introduced in the UK through EU Regulation as national UK rights and CIPA therefore anticipates that pending and existing SPCs will be unaffected ... However, some modifications may be necessary. For example, the Marketing Authorisation (MA) on which the time period of the SPC is based is currently the first MA in the EEA but it could be argued that this should become the first UK MA. In the longer term, it is possible that the UK may enact SPC rights after the UK’s exit that are more favourable to innovator companies that carry out research and develop new products....

The UK has a sophisticated and highly successful litigation system, including the innovative and affordable Intellectual Property Enterprise Court (IPEC). The UK court system will continue to provide a fair and balanced system for litigation between parties post-Brexit.

The UK is a signatory of a number of international conventions in relation to choice of forum (of the court, etc.), recognition of judgements and conflict of laws (for example the Hague Conventions). This will continue post-Brexit and will continue to make the UK a good place to litigate IP disputes.

IP professionals in the UK enjoy a high level of legal professional privilege, which allows clients to be completely open with their legal advisors. There will be no change to these favourable privilege provisions.

Parallel imports and exhaustion of rights: the position may change following a Brexit depending on the precise arrangement reached. This is a complex area and CIPA is working with stakeholders to achieve the optimum position. There is a possibility that a Brexit could enable a more advantageous regime for rights holders ..."
The CIPA seems to have taken a firm, realistic approach to the unfolding events that will mark the realisation of Brexit. For patent portfolio owners and their professional advisers the watchword is vigilance and diligence: change won't come instantly and it won't come without due discussion and warning. At this stage there is little more that one can sensibly add.


  1. Designers' organisation ACID has now released a post-Brexit statement via Nick Kounoupias: http://www.acid.uk.com/news-article/items/brexit-a-perspective-from-acids-chief-legal-council-nick-kounoupias.html

  2. Designers' organisation ACID has now released a post-Brexit statement via Nick Kounoupias: http://www.acid.uk.com/news-article/items/brexit-a-perspective-from-acids-chief-legal-council-nick-kounoupias.html