Business as EUsual? The EU position paper on post-Brexit IP rights

‘Brexit day’, or the date which the UK cleaves itself away from the EU, is no longer a day on the far away horizon and holders of ‘European’ IP rights are still none-the-wiser on how the UK intends to manage the transition. Indications thus far on our side of the channel have been that such rights will be maintained in the UK, but the precise way this will happen has yet to be decided.

The EU, however, have put their own proposal forward. Last month, the EU published a position paper setting out its expectations for European IP rights in a post-Brexit landscape. The EU set out the following “general principles” of how it sees the transition happening:

IP rights with unitary character

The position paper refers to the following rights as those being of ‘unitary character’: EU trade marks; registered Community designs; unregistered Community designs; and several other rights of a more technical nature, including geographical indications, designations of origins and plant variety rights.

The EU’s position is that there should be automatic recognition of rights, with no cost and little administrative burden to rights-holders, in the UK after Brexit. Further, all aspects of those rights including renewal dates, priority and seniority, genuine use and reputation rules should be adopted.

Applications for IP rights, at date of Brexit
The EU’s position is that all applications submitted before withdrawal should be entitled to the benefit of any priority date from its initial European filing.

Databases
The so-called ‘database right’ (protected under EU law) should continue to be recognised and enjoyed by companies in the UK and in the EU.

 Exhaustion of rights
The principle of ‘exhaustion’ is an EU concept – the idea being that, in trade marks for example, where goods that apply a trade mark are placed in the EU market with the consent of the trade mark holder, the owner cannot further impose restrictions over its commercial exploitation, such as re-sale, etc. The EU’s position is that rights ‘exhausted’ prior to the withdrawal date should stay exhausted.

Comment
The UK may already have its preferred position worked out, but as of date of writing, have only provided snippets of information about their preferred method of adopting rights post-Brexit.

If, as we are expecting, the UKIPO is to inherit the hundreds of thousands (possibly millions) of rights cleaved off from the EU, undoubtedly the biggest issue for negotiation is likely to be over who will foot the bill for the influx. The EU’s position appears to be that the EU won’t be responsible for any of these costs, nor should that cost be reclaimed from the IP-rights holders.

Quite rightly, it appears that the EU is not proposing that rights in application / examination / opposition stage at date of withdrawal should be granted an equivalent UK right upon eventual grant. If that approach is taken, then EU applicants ‘stuck in the system’ as Brexit approaches may need to consider whether they use their right to priority to make new applications to the UK well before the withdrawal date. What isn’t clear, however, is what happens to those applicants who have lost such right of priority where they’ve been stuck in the system for well over the 6-month threshold.

Our expectation is that the UK position will be announced within months and negotiations to follow shortly thereafter. As the date draws closer, legal advisors and applicants will need to do less crystal-ball gazing as the position becomes clearer.