Brexit focus: Hope for the best, prepare for the worst
On the night of June 23 many intellectual property practitioners, in both the UK and Europe, will have gone to bed quietly confident.
Shortly before midnight, Eurosceptic politician Nigel Farage told news outlets that “it looks like the ‘Remainers’ will edge it” in the battle over the UK’s membership of the EU.
But for those turning on their television sets the following morning, Farage would have been the first person they saw—not tired, defeated and subdued, but arms aloft, grinning from ear to ear and hailing the UK’s “independence day”.
The decision will mark the first time a country has intended to leave the EU in its current form, and while few thought it would be a comfortable victory for either side, many assumed UK citizens would stick with the status quo and vote to remain in the union.
In the hours after the vote was finalised, the pound plummeted, the stock markets went into meltdown and Prime Minister David Cameron had resigned.
In the weeks since, the situation has calmed to some degree and former Home Secretary Theresa May has taken over the reins from Cameron, but ‘uncertainty’ is still the buzzword. As far as IP and trademarks goes, this certainly rings true.
Sahira Khwaja, partner at law firm Hogan Lovells in London, says the advice to clients for the time being is “hope for the best, prepare for the worst”.
“It’s probably going to be the case that there will be some form of UK-only conversion system [for European Union trademarks] at the point of, or in the run up to, Brexit,” she says, adding that on the whole, the British government’s administrative policy tends to be “pretty pragmatic”.
But she warns: “I don’t think anything is certain; given the events of the last few weeks I’m reluctant to predict what the government policy is going to be and who knows where we will be in two years’ time.
“If you still have UK registrations, either because you never obtained seniority or if you have kept the old marks, then keep hold of them.”
She continues: “If there is any doubt and you want to be certain you are protected then I would say apply for a UK-based mark.”
Business as usual
Leighton Cassidy, partner at law firm Fieldfisher, sees no need to panic just yet.
“I would say it’s business as usual,” he tells WIPR, adding that article 50 of the Lisbon Treaty, which needs to be invoked in order to begin a two-year exit process from the EU, “will not be invoked for some time”.
It has already been confirmed that it will be up to the UK’s new prime minister May (who supported the ‘Remain’ campaign) to invoke the article.
Cassidy adds: “If you are concerned about use, and maintaining use of a mark, it makes sense not to change anything until it is clear what we need to do.”
His words of calm were echoed by UK-based IP organisations the Institute of Trade Mark Attorneys and the Chartered Institute of Patent Attorneys.
Both organisations released statements on the morning after the vote calling for calm and stressing that nothing had changed yet. The organisations added that they would work with the government to ensure the “best possible outcome” for IP owners.
How that outcome will look no-one knows, and it largely depends on how closely the UK wishes to keep ties with the EU.
Cassidy says it’s a “real possibility” that the UK would join a European Economic Area-type system, in which case there would be no change to trademark laws.
“My own sense is that this is what will happen. The UK invested so much on getting access to the single market. If we continue to have that access then trademarks and IP laws are part and parcel of that.”
“If you still have UK registrations, either because you never obtained seniority or if you have kept the old marks, then keep hold of them.”
Khwaja says it’s difficult to predict anything as there has been “no plan” for Brexit.
“Even if you think we will probably end up with some sort of ‘grandfathering’ right for the trademark, you can still see situations where it might be cheaper and less risky to file separately,” she says.
She adds that it may be a little more costly getting a UK trademark in addition to an EUTM but that acquiring a trademark is not that expensive compared to filing opposition proceedings.
“When we leave the EU we will effectively be a separate country and unless we join some form of single market there will be separate IP rights. Part of the cost of separation and doing business here is that people bear that cost.”
Khwaja says the need to apply for new trademark rights would most likely affect new start-up brands that do not know what’s going to happen and companies with core brands, because “the general public doesn’t know much about” the situation.
She adds that there have been reports of phone calls to civil servants from people confused about why EU trademark and IP laws were being mentioned on a UK government website as “there was a vote to get rid of them”.
Khwaja says that so far all commentary on what may happen has been “quite basic and speculative”.
“As I said: hope for best but plan for the worst; as we move forward it will be interesting to see whether people look at things differently,” she adds.
Despite what at worst could be described as radio silence and at best a lack of information coming from the government in the wake of the vote, there has now been some movement towards implementing a strategy.
In July, the government’s former business secretary Sajid Javid appointed John Alty, chief executive of the UK Intellectual Property Office, to lead a team liaising between businesses of all sizes to negotiate trade policy and the effect of the vote.
Greener grass
The uncertainty has led some UK-based practitioners to seek a certificate permitting them to practise in Ireland—a move that would continue their access to the European market.
Figures from the Law Society of Ireland published in June revealed that an unusually high number of qualified lawyers were being admitted to practise there ahead of the referendum.
In the first six months of 2016, 186 lawyers were admitted. Throughout 2015, 101 applied and in 2014 the number was 51.
Speaking after the figures were released, Ken Murphy, director general of the Irish branch of the Law Society, said that most people were “making contingency plans” in the event of a Brexit.
Cassidy says he is aware that “many practitioners” have continued to submit applications to qualify in Ireland. He describes it as a process that is “relatively easy” with lawyers needing to pay a small fee, provide references and be qualified for three years in the UK.
He adds: “We are in uncertain times but there is no need to panic as most practitioners will be monitoring this. My hunch is that we will retain some access to the European Union Intellectual Property Office and other registries as part of the exit process.
“The message to clients would be to maintain the status quo until something develops.”
Despite the uncertainty it appears there may yet be a deal whereby the UK enjoys all the benefits it currently has in the EU, particularly if, as is favoured by a majority of politicians, access to the single market is retained.
But none of this will become clear until article 50 is invoked, if indeed it is at all.
What will happen to the unitary patent and the UPC?
Away from trademarks one of the major fallouts of Brexit will be the effect on the unitary patent and Unified Patent Court (UPC).
Again, no-one is certain what will happen but theories have been varied with some lawyers telling WIPR that two options could still be possible: the system going ahead with the UK remaining part of the agreement and the UK withdrawing completely.
Both options come with their complications.
If the system were to proceed with the UK still a member, the UPC’s rules and regulations would have to be changed, and likely voted on, in order to allow non-EU members to participate.
If the UK were to exit then the next highest filer of European patents would be required to take its place. As the third highest filer, the
UK is one of three countries along with France and Germany that are legally required to ratify the agreement before it can become
law.
The European Patent Office, which will administer unitary patents, said it expects the system to go ahead without the UK.
But the committee tasked with implementing the UPC, the UPC preparatory committee, said at one of its recent meetings that it is too early to say what effect a Brexit would have on the system.
