In light of the UK’s impending withdrawal from the EU, on 12 July this year the British Government published “The future relationship between the United Kingdom and the European Union” (the “White Book”). The publication is the first of its kind and shows how the UK views its new relationship with the EU after Brexit.
Introduction
The current Brexit negotiations concern primarily the disentanglement of the UK from the EU and are meant to amount to a withdrawal agreement with the terms and conditions for the British exit. A draft version of this agreement was published on 19 March earlier this year[1] and further updates were presented on 19 June.[2] The withdrawal agreement spans across many areas and includes provisions on the protection and enforcement of IP rights existing under EU law at the time of Brexit on 29 March 2019 and after an agreed transition period.
In parallel to these divorce proceedings, the ongoing discussions also foresee the interconnection between the withdrawal agreement and future arrangements that are meant to govern the relationship between the parties. In view of such a future relationship, the British government published a policy paper entitled “The future relationship between the United Kingdom and the European Union”[3] (the “White Paper”) on 12 July 2018. The document constitutes the UK government’s first concrete proposal on post-Brexit relations and accordingly represents an important signal on how the UK views its new relationship with the EU.
Both parties aim to agree on the content of the withdrawal agreement in October 2018, accompanied by a political declaration on their future relationship.
The withdrawal agreement
Although this comment is focused on the White Paper, a brief reminder on the status of withdrawal agreement may also be helpful. Two features of the withdrawal agreement are particularly relevant in an IP perspective.
First, the parties have agreed on a transition period which enters into force at the time of the UK’s exit from the EU and expires on 31 December 2020. The transition period is meant to bridge the gap between the UK’s exit from the EU and the entry into force of an arrangement that is meant to govern future relations between the EU and the UK. During this transition period, EU law will continue to apply in the UK and any reference to “Member States” will be understood as including the UK. This means that EU intellectual property rights, including trademark and design rights, will continue to be recognized and enforced in the UK during this period.
Second, at the end of the transition period EU intellectual property rights will no longer extend to the UK. However, the parties have agreed that there will be no loss of protection for holders of EU trade marks, Community designs (registered and unregistered) or plant variety rights. The draft withdrawal agreement stipulates that the holders of such rights that have been registered or granted before the end of the transition period will, without any re-examination, be granted a comparable intellectual property right in the UK. However, agreement has not yet been reached in relation to all matters related to IP rights. For example, the parties have yet to agree on the protection of geographical indication as currently protected under EU law.
Notably, the withdrawal agreement will not enter into force unless the parties have agreed on all aspects that are meant to be included in this arrangement. This includes an agreement on a backstop solution for Northern Ireland, an issue where the parties currently disagree. If no agreement can be found, there is a risk that the UK will leave the EU on 29 March without a withdrawal agreement and, in turn, no agreement on the protection of IP rights under EU law.
The White Paper
The White Paper contains a separate section on intellectual property and additional references to aspects of IP rights in other parts of the document. However, apart from recognising the importance of future cooperation on IP, the White Paper is scarce in detail. It provides for example no information on how the UK would like cooperation in key IP related areas to be featured in a future relationship with the EU post-Brexit, not even regarding trademarks or design rights.
Although lacking in detail in essential areas, the White Paper does provide some information on the following IP related aspects:
• Patents,
• Geographical indications,
• Broadcasting.
Patents
A harmonised patent system has not yet been achieved within the EU. Instead, patents are protected either at national level in accordance with national legislation or at European level under the European Patent Convention (“EPC”), which is an international agreement outside the framework of the EU. Accordingly, existing patents will not as such be affected by Brexit. However, a new unitary patent system is being developed at the EU level. This new system is expected to further improve and simplify a patent application process in the EU. The unitary patent system is based on the so called “EU Patent Package”, which includes the EU regulations establishing the unitary patent system (No 1257/2012 and No 1260/2012) and the Unified Patent Court Agreement (“UPCA”). The unitary patent system will allow individuals to apply for a single Unitary
Patent, which will provide protection in the EU Member States participating in the Unitary Patent system. The UK signed the UPCA in February 2013, but the entry into force of the new arrangement remains uncertain.
In its White Paper, the UK government has expressed its intention to “explore” possibilities of staying in the UPCA and the unitary patent system.
However, it is not clear how a British initiative to be a part of the UPCA and unitary patent system could be implemented. First, the UPCA is currently only available to EU Member States. Accordingly, amendments to this arrangement would be required in order to enable the participation of the UK. Second, the Unified Patent Court will be subject to the same obligations under EU law as any national court of the EU member states.[4] This means that the participating States will be subject to the jurisdiction of the Court of Justice of the European Union (“CJEU”). This seems to contradict the UK’s intention to end its dependence on the CJEU. The White Paper does not provide answers to these issues.
UK’s geographical indications scheme
Protection of certain types of products[5] whose quality, reputation or other characteristic is essentially attributable to its geographical origin,[6] for example British products such as Scotch whisky or Scottish farmed salmon, is currently a matter of EU law and will accordingly be affected by Brexit.
According to the White Paper, the UK will be establishing its own geographical indication scheme consistent with the WTO Agreement on Trade-Related Aspects of Intellectual Property (“TRIPS”) and also go beyond the requirements of TRIPS.[7] However, what this means in practice is not clear and the level of protection concerning geographical indications in the UK after Brexit is consequently uncertain.
Broadcasting
The European Convention on Transfrontier Television (the “CTT”) provides for basic protection of freedom of reception and retransmission of programme services. The CTT is an international agreement to which both EU Member States, including the UK, and non-EU Member States are parties to. As such, it will not be affected by Brexit.
However, satellite broadcasting and cable retransmission are regulated on EU-level through Directive 93/83/EEC.[8] This directive stipulates the “country-of-origin” principle, which establishes that a satellite broadcasting should be governed by the law and the jurisdiction of the EU Member State from where the broadcast originates, regardless of where in the EU the transmission is received and/or re-transmitted. According to White Paper, the “country of origin” principle will not be applicable after Brexit.[9] This means that UK based broadcasters will need to obtain a licence covering each EU Member State where the broadcast could be received; and broadcasters in the EU will need a specific license to broadcast in the UK.[10] Accordingly, the position concerning audiovisual services post-Brexit remains uncertain and further clarification is required.
Conclusion
The withdrawal agreement is meant to ensure that IP rights under EU law continue to be enforceable also in the UK during an agreed transition period. In addition, this arrangement is also meant preserve IP rights existing under EU law at the end of the transition period by granting them protection under UK law. Still, the entry into force of the withdrawal agreement is dependent on agreement in relation to all areas that are meant to be included therein. At the moment, it is still uncertain whether the parties will have agreed on all these aspects by the set October deadline. Consequently, the risk of a no deal scenario remains highly present.
Moreover, unfortunately, the White Paper has not provided much clarity in relation to the protection of IP rights after Brexit. The document is lacking in detail with no concrete proposals on how the UK would like the parties to cooperate on IP related matters in the future. Accordingly, it remains highly uncertain what a future relationship between the UK and the EU will look like in the perspective of IP cooperation.
For more information, please contact:
Håkan Borgenhäll,
Partner, Head of Intellectual Property Group,
+46 (0)10 614 30 30, hakan.borgenhall@vinge.se
Erik Lagerlöf, Ph.D.,
Associate, Eu, Competition & Regulatory Group,
+ 46 (0)70 714 31 66, erik.lagerlof@vinge.se
Wendela Hårdemark,
Associate, Intellectual Property Group,
Member of the Swedish Bar Association
+ 46 (0)10 614 32 44, wendela.hardemark@vinge.se
