The Impact of Brexit upon Intellectual Property Rights and Disputes

The resulting changes – set out below – were almost all as a result of the Withdrawal Agreement reached between the UK government and the EU at the end of 2019, and the subsequent Brexit implementing legislation introduced by the UK government in preparation for the end of the transition period. The Trade & Cooperation Agreement reached between the UK and EU on Christmas Eve 2020, although it contains a 24-page section on the general standards of intellectual property protection to be applied by both parties, left the Withdrawal Agreement in place and thus has made no significant difference to the important changes already announced, and analysed in detail below.

While the UK formally left the EU on 31st January 2020, this was subject to the transition or ‘implementation’ period set out in the Withdrawal Agreement. During the transition period the Withdrawal Agreement (and the UK Withdrawal Acts implementing it) provided for EU law - including all of its IP provisions - to continue to apply in the UK as if the UK was still a Member State, and so nothing changed immediately. It was thus only from the end of the transition period – at 11pm GMT on 31st December 2020, i.e. midnight in Brussels - that the full legal implications of the UK leaving the EU took effect, including the IP changes discussed below.

Trade Marks

• While national UK trade marks are unaffected, from 1st January 2021 the territorial coverage of EU trade marks (EUTMs) no longer includes the UK

• The UK government, through the UK Intellectual Property Office (UKIPO), put in place alternative UK protection (called ‘comparable UK trade marks’) for those who previously had EUTM protection in the UK and lost it as a result of Brexit

• To ensure that the protection provided was the same as would have been provided by the EUTM, comparable UK trade marks have been given the same filing date, priority and UK seniority as the EUTM, and are subject to any licence or security interest registered against the EUTM; any use of the EUTM anywhere in the EU also counts as use of the comparable UK trade mark up until the end of 2020

What were the key changes?

• UK businesses are still able to own existing EUTMs and apply for new ones, but from 1st January 2021 EUTMs now only provide protection in the remaining 27 Member States of the EU (the UK is no longer covered)

• Holders of existing EUTMs will automatically have been granted ‘comparable UK trade marks’ on the UK register from 1st January 2021, to take the place of the UK coverage of the EUTM that has been lost; similar ‘comparable trade marks (IR)’ will have been created for international trade mark registrations designating the EU

• However, applications for EUTMs still pending at the end of the transition period will not have led to the automatic generation of an application for a comparable UK trade mark. Such applicants instead had a nine month grace period (until the end of September 2021) in which to apply for a corresponding UK trade mark, but that period has now expired

• It is possible to ‘opt out’ of the automatically-granted comparable UK trade marks by submitting a Request for removal from the register to the UKIPO

• The entitlement for UK-qualified/based lawyers & attorneys to represent parties before the EU Intellectual Property Office (EUIPO) is now very limited since the transition period ended. (There is one very specific exception to this - existing UK representatives will be able to continue to act in applications and proceedings that were still ‘ongoing’ at the end of 2020, for as long as those applications and proceedings continue.) Our Dublin office and Irish-qualified practitioners mean that Lewis Silkin is still fully able to file and prosecute, and conduct litigation, in respect of EUTMs (and Registered Community Designs too)

• Partly in response to the situation regarding representation before the EUIPO, the UK Government has from 1st January 2021 introduced new Address for Service rules, requiring those making new applications to or initiating new proceedings before the UK Intellectual Property Office from that date to have an address for service in the UK, Gibraltar or the Channel Islands. (Previously, an address in the EEA was acceptable, but that is no longer the case.)

• There are four main exceptions to the new UK Address for Service rules: i) UK IPO applications already started before 1st January 2021; ii) UK IPO opposition, invalidation or revocation proceedings already started before 1st January 2021; iii) UK trade marks, designs and patents already granted before 1st January 2021 (unless/until they are challenged and need to be defended); and iv) proceedings in respect of comparable trade marks and re-registered designs granted to existing EUTM and RCD holders – but this final exception only applies until the end of 2023. In respect of these four exceptions, an EEA Address for Service can still be used.

• Brand-owners using non-UK based representatives will from now on have to ensure that a UK Address for Service is provided when making new UK applications and conducting resulting UKIPO proceedings. As a UK-based law firm, Lewis Silkin is ready to act on your behalf, and we are able both to advise and to act in any litigation in respect of UK rights

• More detailed analysis of the impact of Brexit upon trade marks is given in our note (also on this website) Brexit – Your IP Questions Answered

• See also below regarding Exhaustion of IP Rights and IP Litigation

• For further information (official guidance issued in advance of the end of the transition period) see: here and here (UK Guidance), here (EU Brexit Notice to Stakeholders) and here (EUIPO Guidance on Rights and Representation)

Domain Names

Businesses established in the UK but not in the EU are no longer eligible to apply for new .eu domains now that the transition period has come to an end; and their existing .eu domains have been subject to withdrawal and revocation.

What were the key changes?

• Businesses established in the UK but not in the EU, and UK-resident individuals who are not EU citizens, were from 1st January 2021 not eligible to register new .eu domain names

• Any existing .eu domain names held by such businesses and individuals were subject to withdrawal and revocation. From 1st January 2021 such domains were suspended, but EURid (the registry manager for .eu domains) provided a six month grace period (until 30th June 2021) for them to be reinstated if the registrant submitted new contact data to put on the register demonstrating a continued legal basis to hold such domains (e.g. a business could potentially do so by showing that it was also legally established in a continuing EU Member State; an individual could potentially show EU residence or citizenship), but that grace period has now expired

• From 1st July 2021 - ineligible .eu domains of UK registrants were withdrawn (and no longer functioned so as to support any services, including email or websites); it had been assumed that reinstatement was no longer possible at this point, but a EuRID Update of 3rd November 2021 said that registrants could still contact them and apply to do so provided that they do so no later than 31st December 2021 and meet the .eu eligibility criteria; if the reinstatement was approved the domain could be moved back from “Withdrawn” status to “Registered”

• From 1st January 2022 – the withdrawn .eu domains of former UK registrants were revoked and thus became available for use by other registrants

• For further information (official guidance issued in respect of domain names) see: here (UK Guidance); here (EU Brexit Notice to Stakeholders) and here (Brexit notice from EURid, the registry manager of .eu domains)

Designs

• UK registered designs (and for UK-based businesses, UK unregistered design rights too) were unaffected by Brexit, but their EU counterparts – Registered Community Designs (RCDs) and Unregistered Community Designs (UCDs) – no longer give protection in the UK

• The UK has put in place a comparable systems of design protection to run in parallel with the EU systems of Community Designs, including automatic provision of alternative protection in the UK for those who owned RCDs and UCDs at the end of 2020, who will have lost their previous Community design protection in respect of the UK

What were the key changes?

• Holders of existing Registered Community Designs will automatically have received a comparable ‘re-registered design’ recorded at the UK registry from 1st January 2021; similar ‘re-registered International Designs’ have been provided in respect of international design registrations designating the EU that have already been registered and published by the EUIPO

• Applications for RCDs still pending at the end of 2020 were not automatically turned into applications for the comparable UK re-registered design. Holders of such pending RCD applications had a nine month priority window until the end of September 2021 in which to apply for a corresponding UK re-registered design, but that grace period has now expired

• It is possible to ‘opt out’ of the automatically-granted UK re-registered designs by submitting a Request for removal from the register to the UKIPO

• The situation regarding Representation before the EUIPO and Address for Service requirements at the UKIPO - discussed above in respect of trade marks - applies equally to applications and proceedings in relation to RCDs and UK registered designs

• Holders of existing Unregistered Community Designs still protected at the end of 2020 automatically received continuing protection in the UK via a ‘Continuing Unregistered Design’ for the remainder of the three year term of protection attached to the UCD. The UK has also created a new ‘Supplementary Unregistered Design’ right, from 1st January 2021, which gives similar protection in the UK to that which the UCD provides in the EU

• Now that the UK and EU systems of unregistered design protection are separate, those who rely upon unregistered design rights (EU and/or UK) must consider very carefully when and where to first disclose designs: initial disclosure in the ‘wrong’ place may destroy novelty and prevent protection in other territories, and simultaneous disclosure in both the UK and EU may be the best strategy to maximise protection (although we await any endorsement of such practices by the courts)

• From 1st January 2021, only residents of and businesses formed in the UK and other specified qualifying countries are entitled to hold the ‘old-style’ UK unregistered design right, and disclosure in the EU no longer creates such UK design rights

• Non-UK businesses can still benefit from unregistered design protection in the UK, but only via the Supplementary Unregistered Design described above, rather than the ‘old-style’ UK unregistered design right

• See also below regarding Exhaustion of IP Rights

• For further information (official guidance issued in advance of the end of the transition period) see: here, here and here (UK Guidance), here (EU Brexit Notice to Stakeholders) and here (EUIPO Guidance on Rights and Representation)

Copyright & Related Rights

• The fundamental principles of UK copyright law were largely unaffected by Brexit, given its national, territorial nature and its basis in international treaty obligations that are still in place post-Brexit

• Many of the changes that EU legislation and EU Court of Justice case-law made to UK copyright law over the years of UK membership will persist for the foreseeable future after Brexit as part of the “retained EU law” that is now embodied in UK law, but there are exceptions which are discussed below

• The most important impacts of Brexit are on those elements of copyright & related rights which required EU membership and reciprocity of protection for their existence, such as Database rights and the Satellite broadcasting ‘country-of-origin’ principle, etc.

• The Government has indicated that ‘it has no plans’ at present to transpose into UK law the two most recent EU Directives on Copyright (further details below)

• Certain details of UK and EU copyright law are likely to gradually diverge after Brexit, either due to legislative changes or developing case-law (see the section below on IP litigation and EU Court of Justice case-law, which explains the power of the Court of Appeal or Supreme Court to depart from previous EU case-law); one area in which this may happen sooner rather than later is that of copyright protection for designs

What are the key immediate changes?

• EU and UK Database rights - UK citizens, residents & businesses are no longer eligible to receive protection in the EEA for newly created databases, although their databases already protected in the EEA at the end of 2020 will continue to have protection in the EEA for the rest of their standard duration. The UK has introduced its own version of database rights from 1st January 2021 for new databases created by UK citizens, residents or businesses, but it will provide protection only within the UK

• UK businesses that also have establishments in the EU may be able to rely upon them for EU database right protection for databases created after the end of 2020. It may also be possible to rely upon copyright protection for databases where relevant originality can be shown

• Satellite broadcasting ‘country-of-origin principle’, sometimes also called the ‘one-stop shop’ – From the end of 2020, broadcasters based in the UK have no longer benefited from the EU-only rules that mean copyright clearance only needs to be undertaken in the Member State from which satellite/cable signals are introduced

• UK-based broadcasters providing services to EU customers may now need to clear rights separately in each Member State that their signal reaches; but it may be possible to establish an EU base from which broadcasts will continue to receive the benefit of the ‘country-of-origin principle’ or ‘one-stop shop’

• Online content portability – From the end of 2020, service providers now no longer benefit from ‘one-stop shop’ clearance provisions regarding their UK-based subscribers who temporarily travel to the EEA, and for EEA-based subscribers who travel to the UK; but nor are they obliged to provide ‘portability’ to such subscribers

• Service providers who want to continue to offer content portability to subscribers travelling between the UK and the EEA (or vice versa) now need to ensure that they have cleared any third party rights in respect of the content provided in the relevant territories travelled to

• Recent EU Directives on (i) Copyright in the Digital Single Market and (ii) Copyright relating to Online Transmissions and Retransmissions of TV and Radio content - The date by which EU Member States were obliged to have implemented these two Directives was 7th June 2021. As the transition period ended before that date, the UK was not obliged to implement their provisions into UK law, and the Government chose not to do so. Any future changes to UK copyright legislation will now be driven by the UK’s own policy and legislative processes, but it is not impossible that the UK will choose to adopt certain aspects of these Directives in due course.

• In Brief: other areas of copyright and related rights in respect of which UK-based organisations may be affected by Brexit: Exhaustion of IP Rights (see separate entry below); Collective rights management (obligations upon EU-based collecting societies to collaborate for multi-territorial licensing); Orphan works (mutual recognition of orphan works designated by cultural institutions across the EU); Satellite decoder cards (the government has announced an intention to criminalise the use of decoder cards/devices intended for use in the EU rather than the UK); Access of visually-impaired people to copyright works

• For further information (official guidance issued in advance of the end of the transition period) see: here (UK Guidance), here (EU Brexit Notice to Stakeholders), here (EU Directive on Copyright in the Digital Single Market ) and here (EU Directive on Copyright relating to Online Transmissions and Retransmissions of TV and Radio Content)

Exhaustion of Intellectual Property Rights

• Under EU law, once IP-protected goods have been put on the market anywhere in the European Economic Area (EEA) by, or with the consent of, the IP-owner, the IP-owner can no longer prevent those same goods from being re-sold anywhere in the EEA: so the proprietor’s IP rights in those goods are said to have been ‘exhausted’

• Now that the Brexit transition period is over, the UK is no longer part of the EEA, and so when IP-protected goods are put on the market in the UK that does not exhaust the rights of IP-owners in the EEA

• By contrast, the UK (at least for the time being) is continuing to recognise EEA exhaustion; so the rights in IP-protected goods first placed on the EEA market by, or with the consent of, the right holder continue to be considered exhausted in the UK – this recognition of EEA exhaustion in the UK is known as a “UK+” exhaustion regime

• At the time of writing, the UK Government is yet to confirm its longer-term Exhaustion policy

What is the current position regarding Exhaustion, and might it change?

• As of 1st January 2021, the rights of IP-owners in the EEA are no longer exhausted by goods being put on the market in the UK, and so their rights will still be enforceable against such goods if they are ‘parallel’ imported from the UK into the EEA

• Such exports from the UK into the EEA are likely to need a licence from the rights-owners in the EEA (potentially for both EU-wide rights and relevant national IP rights); for some businesses, it may make more sense to conduct such cross-border buying and selling from a base in a continuing EEA member country (rather than from the UK)

• For the time being, the UK’s continued recognition of EEA exhaustion allows continued ‘parallel importation’ from the EEA into the UK

• In summer 2021 the UK Government consulted on the optimum Exhaustion regime for the UK to adopt for the medium- to longer-term, which canvassed three options: a) retaining the current UK+ approach described above; b) adopting an “international exhaustion” approach, which would mean that IP rights in goods are exhausted in the UK when put on the market by or with the consent of the IP owner anywhere in the world; and c) adopting a “national exhaustion” regime, which would mean that IP rights in goods are only exhausted in the UK when the goods have been put on the market in the UK itself. Early in 2022 the UK Government announced that the result of the consultation was inconclusive – the majority of respondents favoured retaining the UK+ regime, but the Government feels that it has insufficient evidence upon which to base a policy decision. Further research is to be conducted pending such a decision, and no timescale has been announced, and so for the forseeable future the UK+ regime remains in place

• For further information see: here (UK Guidance on Exhaustion and parallel trade) and here (UK Government consultation)

Patents

• Brexit has had a minimal effect on patents in the United Kingdom. Thus, the UK remains part of the European Patent Organisation (EPO) after exiting the EU, because the EPO is not a European Union institution. European Patent Attorneys based in the UK continue to represent their domestic and overseas clients before the European Patent Office, and the UK can continue to be designated in European patent applications. Similarly, the UK’s participation in the International (PCT) patent system is unaffected, with UK patent protection continuing to be available via the PCT through UK national and EPO regional designations

• As a consequence of Brexit, the UK will not be taking part in the EU Unified Patent Court and Unitary Patent system. The UPC start date has been delayed due to constitutional challenges in Germany, but key UPC legislation has now been ratified by the German government, and the UPC Preparatory Committee has stated that it expects the UPC to be up and running in late 2022/early 2023

• Supplementary Protection Certificates for pharmaceutical and plant protection products granted prior to the end of the transition period are unaffected, and applications for SPCs pending at the UK Intellectual Property Office at the end of 2020 are being treated as before with no need to refile. From 1st January 2021, SPCs can be applied for in the same way as before: the product in question must be protected by a patent which is in force in the UK and covered by a marketing authorisation which allows the product to be sold in the UK at the time of applying. However, due to the Northern Ireland protocol, EU legislation regarding marketing authorisations continues to apply in Northern Ireland, whereas UK domestic legislation applies in Great Britain. It is thus possible to have different marketing authorisations for different parts of the United Kingdom (i.e. the UK as a whole, Great Britain only, or Northern Ireland only). The territorial scope of protection granted by the SPC will be equivalent to that for the Marketing Authorisation

• For further information (official guidance issued in advance of the end of the transition period) see: here (UK Guidance)

IP Litigation and EU Court of Justice Case-law

• UK courts can no longer adjudicate on EU trade marks or designs nor issue EU-wide injunctions (except in certain proceedings that were already under way at the end of the transition period on 31st December 2020)

• Likewise, new pan-EU injunctions granted by EU courts can no longer apply to the UK (except, potentially, in proceedings that were already under way at the end of the transition period)

• However, pan-EU injunctions already granted by EU Courts and still in effect as at 31st December 2020 do also apply to the comparable UK trade marks and re-registered designs deriving from the relevant EUTMs or RCDs

• Any cases relating to EU registered trade marks or designs that were ongoing in the UK courts on 1 January 2021 could continue to be heard as if the UK were still an EU Member State, and in a December 2021 judgment the Chancellor of the High Court confirmed that the full range of remedies were still available to UK courts in such cases (including pan-EU judgments): for details see here

• UK courts can no longer make references to the Court of Justice of the European Union (CJEU) for interpretation of IP legislation and other EU law that is retained in UK legislation. If the UK courts had referred a question to the CJEU and this question was still pending at the end of 2020, it will remain before the CJEU until its resolution.

• Other than these pending referrals, UK courts are no longer required to follow CJEU judgments handed down from 1st January 2021 onwards, although they “can have regard to” such rulings “so far as it is relevant to any matter before the court or tribunal” (and for example the Court of Appeal in a 2021 judgment chose to do so in the context of copyright and communication to the public)

• On the other hand, CJEU case-law handed down before the end of the transition period on 31st December 2020 has been made part of UK law (called ‘retained EU case-law’) under the Withdrawal legislation, and thus generally remains binding upon UK courts (but see the next paragraph for an exception). Prior rulings of higher courts in the UK on points of EU law (including regarding retained EU case-law) also remain binding upon lower courts in the UK under the usual rules of precedent

• The UK Supreme Court, the England & Wales Court of Appeal, and the appellate courts of similar standing in Scotland and Northern Ireland, have all been given the power to depart from such ‘retained EU case-law’. This is intended to further the Government’s stated policy aim of ‘enabling retained EU case-law to evolve more quickly’, so as to reflect the ‘new context’ of the UK having departed the EU

• The relevant courts must apply the same test in deciding whether to depart from retained EU case-law as the UK Supreme Court already applies when deciding whether to depart from its own previous decisions – namely whether ‘it appears right to do so’ in the circumstances. The related jurisprudence indicates that in the past the Supreme Court would only depart from its previous decisions ‘rarely and sparingly’, for example if they would produce ‘serious anomalies’, ‘results which were plainly unsatisfactory’ or ‘unforeseen serious injustice’. It remains to be seen how such considerations will generally be applied in the context of assessing retained EU case-law (and by the Court of Appeal as well as the Supreme Court) – the Government decided not to augment the test with a specific list of relevant factors or considerations to be taken into account – but see below for the first example

• A proposal to extend the ‘power to depart from retained EU case-law’ also to the High Court was rejected on the grounds that it might introduce too much uncertainty and lead to an increase in litigation.

• In the first intellectual property case to reach the Court of Appeal and raise the issue of potential departure from EU case-law,the Appellant asked the Court to diverge from the EU Court of Justice jurisprudence on what constitutes ‘communication to the public’ for the purposes of copyright law.The Court of Appeal gave this argument short shrift.Lord Justice Vos, Master of the Rolls, commented: ‘I regard this as a paradigm case in which it would be inappropriate for the Court of Appeal to exercise its new-found power to depart from retained EU law.’First, this was because the relevant copyright law derives from international treaties, and the courts of the treaty member states ‘should, wherever possible, be striving to achieve harmonious interpretation of them, not individualistic disharmony’ – particularly in an area with cross-border impacts such as copyright and the internet.Secondly, the Court of Appeal in such cases must apply the Supreme Court’s approach when departing from its own decisions, which is to be very circumspect and usually only doing so in cases where it might otherwise lead to injustice or an undue restriction in development of the law.But in this case, Vos LJ held: ‘…the CJEU’s approach to the law of infringement of copyright by communication to the public is neither impeding nor restricting the proper development of the law, nor is it leading to results which are unjust or contrary to public policy.It would, therefore, be both unnecessary and undesirable for this court to depart from retained EU law in this case.To do so would create legal uncertainty for no good reason.’ (TuneIn Inc v Warner Music UK Ltd et al [2021] EWCA Civ 441).

• It seems likely that similar arguments will be applicable in most other scenarios in which the Court of Appeal or Supreme Court might be asked to ‘depart from’ retained EU case-law on IP matters, and so we should expect such departures only in fairly exceptional circumstances.The most likely scenarios for such departures to occur may perhaps be where there is an apparent conflict between UK legislation and EU case-law, and where there is no clear international treaty law upon which both UK and EU law are jointly based.

• For further information see UK Guidance: here and here; Outcome of Consultation on UK courts’ power to depart from retained EU case-law here; Court of Appeal ruling in TuneIn v Warner Music here (in particular the Master of the Rolls’ judgment at paras 196-202)

Customs Enforcement of Intellectual Property Rights

• Under EU law, IP rights owners can ask the customs authorities in Member States to take action in respect of goods suspected of infringing an IP right. A Union ‘application for action’ by customs authorities (AFA) can be made to the authorities of a single Member State but request action also by authorities in one or more other Member States

• With the end of the transition period on 31st December 2020, such Union AFAs could no longer be submitted via the UK customs authorities; moreover AFAs already submitted/granted via the UK before the end of the transition period – while remaining active in respect of UK customs, which will have procedures that mirror the EU system - are no longer valid in the EU. A fresh AFA needed to be submitted in a continuing Member State for the Union customs enforcement measures to continue outside the UK

• An AFA submitted before the end of the transition period through the customs authorities of a non-UK Member State and which requested action by the UK authorities amongst others remained active for the continuing EU customs authorities but was no longer valid in respect of the UK. A fresh AFA needed to be submitted to the UK customs authorities for enforcement measures to continue in the UK

• Special rules apply to customs enforcement under the Northern Ireland Protocol

• For further information (official guidance issued in advance of the end of the transition period) see: UK Guidance here; EU guidance here.