15 November 2018Trademarks

Draft Brexit agreement confirms future of IP rights in UK

Last night, UK Prime Minister Theresa May announced that a Brexit deal had been agreed between the European Commission and the UK’s negotiators, in a step towards clarifying the future of the UK following its exit from the EU.

The 585-page draft  Withdrawal Agreement on Brexit contains information on the future of existing IP rights in the UK, with lawyers commenting that this aspect of the draft is welcome.

Crucially, the draft confirmed that a transition period will occur after the UK leaves the EU on March 29, 2019, during which the UK will be treated as if it were a member state. The transition period will apply until the end of December 2020.

Under article 54 of the draft agreement, the protection afforded to existing EU unitary IP rights—which includes trademarks, registered designs, and plant variety rights—in the UK will be maintained as national rights post-Brexit.

Alan Johnson, partner at  Bristows in London, said that there is “nothing surprising” about this, as “the views of the EU and UK were well aligned from the outset that there should be no loss of rights and a painless transition from the present regime to the new one”.

But, according to Lee Curtis, partner at  HGF’s Manchester office, the draft agreement does put “some added ‘meat’ on the bare bones” of the previously-mentioned plans.

Under the draft agreement, trademark and design owners will not have to pay for the conversion of their EU IP rights into UK rights. The existing rights will not be re-examined, and they will enjoy the date of priority of the EU trademark.

Avi Freeman, partner at  Beck Greener in London, said he believed that this was always going to be the case, as it “makes commercial sense”. However, that is not to say that the “whole process of re-registration will not be a headache and bureaucratically onerous for right owners”, he added.

Curtis said that the agreement also made it clear that, if an IP right is exhausted in the EU before the end of the transition period, it will be considered as having been exhausted in the UK after that period.

He said: “The UK government had already made clear it will follow a hybrid UK/European Economic Area exhaustion-of-rights system post-transition, but has now made it clear that the structure could be temporary and is going to be open to consultation. This could herald international exhaustion of rights in the UK post-transition, we will have to wait and see.”

Kate O’Rourke, immediate past-president of The Chartered Institute of Trade Mark Attorneys, said that the institute was encouraged that rights of representation at the European Union Intellectual Property Office (EUIPO) will continue for ongoing proceedings.

“However, it is very disappointing that there is no clarity on continued rights of representation for UK trademark attorneys before the EUIPO. We firmly believe that it is in the best interests of business and the UK legal professions that UK professional representatives should retain their rights to practice before the EUIPO."

Robert Watson, partner at  Mewburn Ellis in London, said that the IP implications of yesterday’s agreement are “much the same” as the previous version of the draft, published in March.

He did note a change in relation to service addresses: “A UK address for service will not be required for the equivalent UK right for at least three years after the end of the transition period, a minor change to the previous version.”

May reportedly secured the backing of senior UK ministers, but Dominic Raab, the UK secretary of state for exiting the EU, and Esther McVey, the secretary of state for work and pensions, have today resigned from May’s cabinet.

European leaders are due to meet on November 25 to endorse the draft agreement, and the UK parliament will vote on the deal in December.

As noted by Watson, this “certainly won’t be a straightforward process, and it is possible that further amendments will be made to the draft agreement if issues arise during the approval process”.

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More on this story

23 July 2018   The UK government will convert existing EU trademarks and designs for free after Brexit, according to statements made during a House of Commons debate on Thursday, July 19.
24 August 2018   The UK government yesterday published its guidance on a “no deal” Brexit, providing limited but useful information on IP post-Brexit, according to lawyers.
14 December 2018   European IP firm Mewburn Ellis yesterday announced that it will manage the conversion of EU trademark applications which are pending when the UK leaves the EU into UK trademark applications for free post-Brexit.