European Commission’s position on intellectual property rights
11 September 2017
On 6 September 2017, the European Commission published its position paper setting out the main principles it recommends be adopted by the remaining Member States (that is, the ‘EU 27’) in the Brexit negotiations on intellectual property rights.
The position paper represents the first time the Commission has set out its viewpoint since Article 50 was invoked by the UK Government.
The Commission acknowledges that Brexit will create uncertainty in respect of IP rights. Indeed, as set out in our article ‘The potential impact of Brexit on IP within the UK’, the starting point is that unitary rights will no longer continue to have effect in the UK post-Brexit, thereby creating a significant lacuna in protection.
Unitary rights have effect across the European Union and include, amongst others, European Union Trade Marks and Community Design Rights. As such, these rights are highly valuable and represent the cornerstone of many IP portfolios.
The Commission has adopted a number of general principles for the negotiations. The key points are:
1. Equivalent IP rights in the UK post-Brexit
Owners of registered or pending unitary IP rights should be recognised as having / be able to apply for equivalent IP rights in the UK post-Brexit.
In respect of registered rights (such as EU trade mark registrations), the Commission envisages automatic recognition (rather than the rights holder having to take action), no additional financial costs to rights holders and a minimal administrative burden.
In respect of pending applications (such as EU trade mark applications), the Commission envisages applicants being able to seek equivalent protection in the UK post-Brexit whilst maintaining the same priority date as the application that was pending at the EU Registry at the point of Brexit.
Essentially, the Commission does not want a lacuna to be created which would undermine existing unitary rights. However, the Commission’s position is more favourable to registered rights than pending applications.
Moreover, the Commission refers to the introduction of domestic legislation which may be required as of the Brexit date to recognise existing unitary IP rights, such as protections of designation of origin and geographical indications.
2. Exhausted IP rights
IP rights which were exhausted in the EU territory at the point of Brexit should remain exhausted in both the remaining 27 member states and the UK post-Brexit
Currently, once IP rights owners have put goods covered by their rights onto the market in the EEA or this has been done with their consent, their IP rights are ‘exhausted’ and they cannot prevent any further dealings in those goods unless there are legitimate reasons for doing so.
At the point of Brexit, owner of IP rights in the UK may be able to prevent the importation and resale of goods which were put on the EEA market but not the UK market. However, the Commission wants IP rights which were exhausted in the EU at the point of Brexit to remain exhausted in the UK post-Brexit, thereby preventing UK customs authorities from blocking their importation in the UK whilst those goods remain in circulation.
However, it remains to be seen how the UK customs authorities will be able to identify which goods were exhausted prior to Brexit which goods were exhausted post Brexit.
The Commission’s position paper is broadly positive as it recognises the critical need to ensure that there is no lacuna in protection by allowing broadly equivalent rights in the UK for existing unitary EU rights, whilst minimising the administrative burden and costs on the rights holder.
However, there practical issues with the Commission’s approach as it will lead to a ballooning of the number of national rights in the UK with all the attendant administrative burden and cost being placed on the UK Registry.
The devil will be in the detail of the negotiations and there are a number of uncertainties about the Commission’s proposals, such as whether the UK Registry should require owners of unitary rights to indicate they have an intention to use their trade mark in the UK, and the mechanisms which should be put in place to address trade mark applications or registrations which are under opposition/revocation/invalidation proceedings at the point of Brexit.
Finally, it should be noted that this is simply the Commission’s position paper and, at present, we do not have a reciprocal position paper from the UK Government.
As the terms of the UK’s exit from the EU crystallise, and so in turn does the impact of Brexit on various IP regimes, we will provide more specific briefings. If you would be interested in receiving these briefings please subscribe here or contact your usual Eversheds Sutherland contact.
For more information on Brexit, please visit the Eversheds Sutherland Brexit Hub.
For more information please contact Peter Dawson or Kate Ellis