Clifford Chance

After several years of anticipation, the Brexit transition period ended on 31 December 2020 and the UK is no longer a part of the EU trading bloc. Whilst the UK formally left the EU on 31 January 2020, it remained tied to it by way of a transition period until the end of 2020 to facilitate further trade deal discussions. After a tumultuous series of negotiations, a deal was finally made on 24 December 2020 and from 1 January 2021, EU laws and treaties ceased to apply in the UK. Both sides are now party to a Trade and Cooperation Agreement, which contains a series of harmonising principles based on current EU IP law, though at a higher level of generality in some areas.

The end of the transition period was a significant moment for intellectual property (IP) rightsholders worldwide seeking to protect their intellectual property in both the UK and EU. In this article, we will explain the changes to UK IP law that have come about as a result of Brexit and the implications this has had on IP rightsholders both in the UK and beyond.

Unitary rights: registered trade marks and designs

Comparable rights

As a result of the harmonisation of EU law, the legal framework for registered trade marks and registered designs in the UK already largely mirrored that of the EU. The UK Intellectual Property Office (UKIPO) therefore automatically created a number of comparable rights on 1 January 2021, which ensure continued protection of intellectual property rights in the UK post-Brexit.

According to the UKIPO, it converted almost 1.4 million EU trade marks and 700,000 EU designs to comparable UK rights at the end of the transition period. These were based on existing EU registered trade marks and designs and provide equivalent protection in the UK using the same filing date of the original right. These new rights have the same legal status as if they had originally been applied for under UK law and are for most purposes independent from the EU rights they were based on.

The same applied to EU designations under international trade mark and design registrations and comparable UK rights were automatically created at the end of the transition period based on their international rights protected through the Madrid and Hague systems.

If rightsholders do not wish to have the UK comparable protection, they can now pro-actively opt out. However, there is generally little benefit to doing so – the owner can simply allow unwanted rights to lapse on renewal. For comparable rights which have a renewal deadline in the first 6 months of 2021, the UKIPO will not issue renewal reminders. Instead, it will send a notice stating that the renewal data has passed, but giving the possibility of late renewal without having to pay the normal additional fee.

Pending EU applications

Comparable rights were only created in respect of registered intellectual property rights. Therefore, any EU applications that were still pending at the end of 2020 need to be refiled in the UK within 9 months of the end of the transition period, i.e. 30 September 2021, in order to claim the original priority of the EU application.

Revocation/invalidity proceedings

Some existing EU trade marks and designs will have been the subject of ongoing revocation or invalidity proceedings at the end of the transition period. Comparable UK rights will still have been created in respect of these. However, under the Withdrawal Agreement, if the EU proceedings result in the successful revocation or invalidity of that right, then the UK comparable right will be revoked or declared invalid too. The exception to this is where the grounds on which the EU trade mark was revoked or declared invalid would not have applied under UK law.

Use and reputation

A UK trade mark registration must go unused in the UK for a period of 5 years before it becomes vulnerable to any non-use revocation action. However, UK owners of comparable trade mark registrations will be able to rely on use and reputation in the EU for a period of time and up until 31 December 2025 at the latest. The same right is extended to EU trade mark holders with prior use in the UK.

The five-year period is activated by the last use of the EUTM or UK comparable right so if an EUTM was last used in an EU country on the last day of the transition period then the comparable UK right would be able to benefit from that use and reputation in the EU until 31 December 2025. Similarly, if an EUTM had last been used in the UK at the end of the transition period, it would be able to benefit from that use until 31 December 2025 at the latest.

Representation

The rules for representation and service for UK trade marks and designs have changed. A UK address for service is now required for new applications and where there are any proceedings relating to a UK comparable right. If a UK comparable right becomes the subject of proceedings the UK IPO will require a UK address for service. Failure to respond could lead to loss of rights.

Security

Any licence or security that was registered against an EU trade mark or design will also be enforceable against its new UK comparable right. In the case of licences, this applies only if there is not any contrary agreement between the licensor and licensee. However, these rights will not appear on the UKIPO register, leaving the licensee or security holder unprotected in terms of the public register. As such, UK licensees or holders of security interests in EU rights for which a comparable UK right has been created should consider proactively registering their interest in any comparable UK rights in order to retain the protection. Rightsholders have 12 months from the end of the transition period to re-register their interests at the UKIPO.

Exhaustion of rights

When a product protected by an IP right is sold by, or with the consent of, an IP rightsholder, the IP right is said to be exhausted. Pre-Brexit, this meant that if a protected product was placed on the market within the EEA, the IP rightsholder would not be able to prevent the movement of that product within the EEA, including the UK.

Following Brexit, exhausted IP rights in the EU and UK remain exhausted. Further, protected products first placed on the market on the EEA will be unaffected and the UK will consider these rights to be exhausted unless and until it changes its policy from "regional exhaustion". However, goods placed on sale in the UK by, or with the consent of, the rightsholder will now no longer be considered exhausted in the EEA. Therefore, a business seeking to export any such product to the EEA may require the rightsholder's consent.

Changes to other IP rights

Patents

Most of the UK's substantive patent law will be unaffected by Brexit, as it is currently based on the European Patent Convention, which is independent of the EU. Existing European patents covering the UK will be unaffected and European patent attorneys based in the UK can continue to represent applicants before the European Patent Office.

UK, EU and third country businesses can continue to obtain a compulsory licence for manufacturing patented medicines in order to meet specific health needs in developing countries. They may also continue to rely on the exceptions from patent infringement provided for studies, trials and tests on pharmaceutical products.

However, Community plant variety rights no longer have effect in the UK and cannot be used to obtain a compulsory licence on a patent in the UK. Instead, rightsholders will have to rely on UK plant breeders' rights. This includes Community plant variety rights that were converted into UK rights at the end of the transition period.

It is further worth noting that the UK has decided not to participate in the Unified Patent Court Agreement, which is a (not yet operational) single patent court for the twenty-five participating states.

Unregistered designs

Unregistered designs are protected by an EU unitary system and a UK national system that differ in a number of respects. To ensure continuity of protected design rights, two new UK rights have been created. Existing EU unregistered rights were mirrored into the UK national system automatically at the end of the transition period and protected as "UK continuing unregistered designs". The UK also created a new unregistered design right called the "supplementary unregistered design" (SUD). The terms of SUD protection are similar to that conferred by the EU's unregistered community designs but protection under this extends only to the UK. The existing UK unregistered design right continues to operate as normal alongside these two new rights, however the qualification criteria has been amended to account for the fact the UK is no longer in the EU.

Importantly, EEA designers disclosing their design in the EEA can no longer enjoy automatic protection under the UK unregistered design right. Likewise, designs first disclosed in the UK are no longer eligible for protection as EU unregistered designs. A business seeking unregistered design protection will therefore have to decide whether they want UK or EU protection. Neither the UKIPO nor EUIPO has provided guidance on whether they will accept simultaneous disclosure of designs as of yet.

Geographical indicators

The UK set up four new geographical indicator (GI) schemes that came into effect on 1 January 2021. The schemes are operated by the Department for Environment, Food and Rural Affairs (DEFRA) and are open to UK producers as well as those from other countries.

The new UK GI schemes protect registered product names when they are sold in Great Britain (England, Scotland and Wales) only whilst the EU GI schemes continue to protect registered products names when they are sold in Northern Ireland and the EU. The categories covered and designations of protection offer currently mirror those under the EU scheme as under the Withdrawal Agreement, the relevant EU regulations will be incorporated into UK law.

The Trade and Cooperation Agreement enables both the UK and EU to set their own rules and the future directions of their respective schemes. The UK and EU have agreed a review clause on GIs, which provides that the UK and EU may, if both parties agree it is in their interests, use reasonable endeavours to agree rules for the protection and domestic enforcement of their GIs.

Supplementary Protection Certificates (SPCs)

Supplementary Protection Certificates, although issued under an EU Regulation, are also already granted at a national level by the relevant regulatory authority. The existing EU SPC regulation now forms part of UK law with certain amendments to create a more standalone system.

SPCs that had already been granted continue to be valid and no further action needs to be taken by the rightsholder. In addition, SPC applications that were still pending at the end of the transition period are unaffected by the change in the regulatory framework and will be examined under the current framework. New SPC applications filed in the UK are now subject to the new regulatory framework, which requires that the applicant must have a valid patent in the UK and a marketing authorisation that allows the product to be sold on the UK market as at the application filing date. This includes marketing authorisations granted by the MHRA, the UK medicines regulator, and any authorisations granted by the EMA, the European medicines regulator, which have been converted into UK authorisations by the MHRA.

Although the grant of an SPC is based on the first UK authorisation to place the product on the market as a medicinal product, the period of duration of the SPC is based on the first authorisation for the product in either the EEA or the UK. However, third parties are permitted to manufacture SPC protected products in the UK without the rightsholder’s consent if such products are for export outside of the UK and EU. Stockpiling is also permitted during the 6 months prior to expiry of the UK SPC if the protected product is for sale in the UK or EU upon the expiry date.

Copyright

Although copyright is a national right, most UK copyright law is based on harmonising directives and treaties and a substantial part of UK copyright law has derived from EU copyright legislation. There has been no change to the eligibility requirements for copyright protection under UK law so works created by a national of or first published in the UK, EEA or any country that is party to international copyright treaties remain eligible for protection.

However, certain specific measures rights have been modified to reflect the reality of the UK’s separate status. For example, the EU Regulation on cross-border portability of online content services in the internal market ceased to apply at the end of the transition period and it is envisaged that this may affect UK travellers attempting to access their streaming services whilst abroad in the EU.

Further, the UK decided not to implement the EU's new Directive on copyright in the digital single market and any future revisions to UK copyright law will be based solely on domestic policy. It is expected that UK copyright law may diverge in some areas at least from EU law in the future.

Looking forwards…

Looking forwards, we do not expect to see UK law in the IP sphere diverge hugely from that in the EU. A harmonised approach to rights recognition is beneficial to both parties, and many parts of EU and UK IP law reflect international treaty obligations binding both EU and UK. Despite this, IP rightsholders should continue to monitor their IP portfolios to ensure they remain protected and are well prepared for any future changes.

Key Take-Away Points 

• As of 1 January 2021, the UK is no longer bound by EU law. Instead, both sides are now party to a Trade and Cooperation Agreement.
• In order to protect IP rightsholders, the UKIPO created comparable rights for a large number of unitary rights previously protected by EUIPO registrations. However, there remain some important differences for rightsholders to take note of post-Brexit.
• UK law may diverge further from EU law in the future so rightsholders will need to continue to monitor their IP portfolios to ensure they remain protected.

Laura Hartley, Trainee, London IP Group, contributed to the writing of this article.