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20 December 2016CopyrightGuy Wilmot

Copyright and Brexit: what lies ahead

It seems to be a requirement that any article or comment on Brexit is required to state at the beginning that the UK has not left the EU yet and we don’t know what the likely outcome will be. It is also compulsory to add that the eventual deal made by the UK will dictate the outcome, and this article is no exception.

Many UK-based businesses rely on copyright to protect their interests internationally. The businesses which are particularly reliant on copyright protection include some of the UK’s stronger sectors, such as the creative industries and software and technology. How will the Brexit vote affect those businesses that rely on copyright protection?

There remain various options, but there are still a number of things we can say about what the impact might be.

Is copyright law in the UK based on EU law?

Many intellectual property rights are harmonised across the EU to a significant extent. In particular a lot of work has been done to harmonise trademark and patent law among the member states.

Copyright law, however, remains subject to national rules, and harmonisation has only been piecemeal. Most of the applicable copyright rules in the UK are set out in UK statutes, in particular theCopyright, Designs and Patents Act 1988. Brexit will not automatically remove these laws and baseline copyright law will continue as before.

International enforcement of copyright is also derived in part by international treaties which sit outside the EU framework, such as the Berne Convention (which requires signatory countries to recognise copyright created in other signatory countries).

Copyright law in the UK is based on EU law to a limited extent.

The European Commission has been seeking for a number of years to harmonise copyright law to a greater extent across the EU, and the question is whether the UK participates in this harmonisation post-Brexit.

Gradual divergence or sharp shock?

It is very unlikely that there will be any sharp changes in copyright law on ‘Brexit day’. Most copyright law derives from UK statutes and any UK government is likely to want to minimise disruption and adopt most of the EU copyright regime which is not already in UK statute (which is very little) post-Brexit. The emphasis is likely to be to minimise disruption.

Inevitably, if the UK is outside of the European Economic Area and is not subject to the jurisdiction of the Court of Justice of the European Union, then interpretation of copyright law by the courts will diverge over time.

It is also likely that the UK parliament will add to the existing statutes over time, leading to further differences.

Keeping a common regime

Although it would be unwise to expect no difference between the laws of the EU and the UK, it is likely to be in the interests of most concerned for the rules to stay as harmonised as possible.

The UK government will want to make it as easy as possible for creative industries to export to the EU, which is likely to mean adhering to a similar copyright regime.

Copyright is not (yet) a controversial political issue and the constituency in favour of a radically different approach to copyright in the UK versus the EU is probably going to be a small one.

The UK government may try to allow its businesses to benefit from harmonised copyright law and the ‘Digital Single Market’ (DSM) strategy (see below), but this will be reliant on recognition from the EU. If the UK is a member of the single market, all of the EU’s copyright regime will apply.

“The constituency in favour of a radically different approach to copyright in the UK versus the EU is probably going to be a small one.”

DSM

There are some upcoming changes and further harmonisations proposed by the commission under the DSM strategy. If the UK is outside the EU then it will not automatically be included in many of these changes.

Many of the DSM proposals are projects which the UK would be very much in favour of and which would be expected to benefit UK businesses (particularly e-commerce, gaming and software, and the creative industries).

The effect of the rules is intended to deepen the single market in relation to digital content and allow content to be licensed across the EU (in effect treating the EU as a single territory for licensing content). The intention is for “free movement of content” to be added to the four fundamental freedoms of movement (of goods, capital, services and people).

This will include a right to access content across borders and rules to prevent citizens in different EU countries being blocked from accessing websites in other EU countries. There are also proposals to include a standard set of “fair use” exemptions for copyright works.

The UK may therefore seek to adopt many of these proposals in order to give UK business the benefit of them, but this is likely to require recognition from the EU and (probably) membership of the single market.

What if the UK ends up outside the single market?

If there is a ‘hard’ Brexit scenario, the EU may refuse to allow the UK to benefit from the country of origin rules, meaning consequences may flow from this in relation to copyright.

The UK is likely to be excluded from rules requiring a minimum level of European content, and the UK would also fall outside any common licensing regime for content, meaning that the UK as a market for content may take second place to the EU. For example, in future Netflix might choose to operate first in the EU and then seek to agree licensing for the UK.

Enforcement may also be affected if UK legal judgments are not automatically recognised throughout the EU. If this is case, then in order to enforce copyright in the UK and the EU, separate legal proceedings may need to be brought both in the UK and EU. This would mean that the UK would be a less attractive venue for intellectual property disputes and would also add to the costs of UK businesses seeking to enforce their copyright in other EU countries.

In addition the UK may be excluded from rules relating to the DSM and those providing for a minimum level of European content.

Conclusion

It is fair to say that copyright is an area of law perhaps less affected by Brexit than many others, and any impact is likely to be felt over a period of time.

All Brexit articles finish by making the point that the type of Brexit is crucial to the outcome, and this is no exception—if the UK stays in the single market, very little is likely to change; if the UK leaves the single market without replacing those arrangements, then very little will change immediately but the long-term impact could be significant.

Guy Wilmott is a partner at Russell-Cooke. He can be contacted at:  guy.wilmot@russell-cooke.co.uk

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