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June 24, 2016Client Alert

The Impact of Brexit on European Intellectual Property Protection

On June 23, 2016, the United Kingdom (UK) voted to leave the European Union (EU), a decision that has been dubbed “Brexit.” Assuming British leadership follows the outcome of the vote, the UK will formally notify the EU of its intention to leave and begin a two-year period during which the two parties must formalize the terms of exit. Until the terms are formalized, the UK remains a member of the EU.

Among its many economic and political effects, the decision will impact intellectual property rights in the UK and the EU. Based on our analysis and discussions with our European and UK associates, we have summarized below the impact on patent, design, and trademark rights and their related agreements.

Patents
It is important to first note that the European Patent Convention is independent of the European Union, and therefore the UK’s membership in the European patent system is not affected by the Brexit decision. That is, an applicant can still protect its invention in the UK by filing a European patent application and designating the UK.

However, the Brexit decision will likely delay the implementation of the unified patent system, which was scheduled to take effect in 2017. The unified patent system would create a Unitary Patent effective in all EU member states and enforceable through a new Unified Patent Court. As one of the top three countries for patent filings in the EU, the UK’s ratification was necessary for the system to come into existence. The agreement will need to be revised and ratified once the UK leaves the EU, which may cause a delay of several years. If the unified patent system is eventually implemented, any rights under a Unitary Patent would not extend to the UK. However, protection in the UK would still be available through a European patent (as discussed above) or a UK national patent.

Industrial Designs and Trademarks
The UK will remain a member of the EU until the terms of the exit are finalized, and European Community Designs (ECDs) and European Union Trademarks (EUTMs) will remain valid in the UK during that time. However, it is unclear how these rights will be affected once the UK ceases to be a member of the EU. It is possible that EUTMs and ECDs will cease to cover the UK, and intellectual property owners could lose rights in the UK if they do not own corresponding national registrations. However, it seems more likely that the UK will implement a procedure for converting EUTMs and ECDs to national registrations without any loss of priority, or enact national legislation which would extend EUTMs and ECDs to the UK.

Agreements
Finally, it is difficult to predict how the Brexit vote will affect existing agreements, although it is advisable to begin reviewing any documents for potential issues. For example, if an agreement or license refers to the EU or to specific EU laws, the parties should consider whether an amendment is necessary to include a reference to the UK or UK-specific laws.

The significance of the Brexit vote may not be fully understood for several years. In the meantime, we will continue to monitor and provide updates on developments that may impact intellectual property rights.

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