Written by: Michael Choi
Breaking away when a situation becomes unfavorable, while not the smoothest option, is an appropriate option to consider. However, failing to consider the ramifications of turning away may complicate the situation further.
Enter: Brexit.
Brexit, a portmanteau of the words “British” and “exit,” describes the controversial referendum held on June 23, 2016, where voting-age citizens of the United Kingdom (UK) voted on whether to remain in or leave the European Union (EU).[1] A 51.9% majority voted for the UK to exit the EU.[2] Because of its international economic presence, the UK’s severance will leave the EU in a precarious position. The severance will even challenge the United States, since many of its companies continue to conduct business in the UK.
The effects of Brexit have yet to be felt in full, since the UK must submit a formal notification of its intent to leave the EU.[3] In the meantime, companies that conduct business in the UK and the EU must be mindful of the potential changes in their intellectual property (IP) rights.
Although copyrights, which are dealt with on a national basis, will likely not be impacted, patents and trademarks, which are both based on EU-wide agreements, will experience radical changes.[4] EU patents and trademarks will no longer enjoy IP law protection in the UK. Companies wanting to conduct business in the UK and the EU will have to file separate applications.
Brexit currently has little effect on filing for patent rights on the European continent: rights seekers can file with the United Kingdom Intellectual Property Office, or with the European Patent Office.[5] Since filing with the European Patent Office is done via the European Patent Convention, which is not an EU member state agreement, registering for and enforcing patent rights will remain largely unchanged.[6] However, the UK’s severance presents an obstacle for the EU’s proposed Unified Patent Court system (UPC).[7] The UPC was meant to consolidate the patent filing and prosecution system in the EU.[8] Consequently, the UK will not be included in this system.[9] The UK is one of the three named countries (along with France and Germany) that must ratify the agreement.[10] Thus, the UK’s departure from the EU will delay the UPC from centralizing the EU’s patent laws.[11] Even if the EU manages to solve the ratification problem, it faces the issue of replacing London as one of the UPC’s original court locations.[12]
All EU trademarks are at risk, since all European trademark regulation is done under the EU Trademark system (EUTM).[13] When the UK is no longer a part of the EU, EU trademarks will no longer receive protection in the UK.[14] Current EU mark owners will either be forced to adhere to transitional provisions, or file completely new trademark registrations under the UK trademark law.[15]
Rights owners in the EU must be conscientious about protecting their rights in the future. With the UK’s absence in all EU-related matters, companies with EU IP rights must adapt to the new IP laws emerging from Brexit.
