The Intellectual Property Provisions of the Draft Withdrawal Agreement

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Licence Creative Commons Attribution-Share Alike 4.0 International

Jane Lambert

Art 126 of the Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community which was published on 14 Nov 2018 provides for a transition or implementation period to begin no later than 29 March 2018 and continue at least until 31 Dec 2020.  During that period, EU law would continue to apply to and subsist in the UK by virtue of art 127.  That would include the legislation establishing EU trade marks, Community designs and plant breeders' rights, geographical indications, database rights and supplementary protection certificates. 

Preservation of EU Intellectual Property Rights

At the end of the implementation period, all IP rights granted under EU law would lapse pursuant to art 50 (3) of the Treaty on European Union.  Arts 54 to 61 of the draft withdrawal agreement make provision for the preservation of those rights as UK intellectual property rights at the end of the implementation period. The draft withdrawal agreement makes no provision for the Unified Patent Court Agreement which is awaiting German ratification.   However, if Germany ratifies the Unified Patent Court Agreement during the implementation period there would appear to be no reason why that agreement should not come into force during that period,  What would happen after that will depend on the terms of the UK's future relationship with the EU.

Future Relationship

As I said in A Withdrawal Agreement Reading Guide of 15 Nov 2018, bullet points for an agreement on the future relationship appear in the Outline of the Political Declaration setting out the Framework for the Future Relationship between the European Union and the United Kingdom,  The bullet point on intellectual property could not be briefer:

• "Protection and enforcement of intellectual property rights beyond multilateral treaties to stimulate innovation, creativity and economic activity."

The words "beyond multilateral treaties" are at least compatible with the possibility of continued British participation in the UPC Agreement.

Trade Marks, Registered Designs and Plant Varieties

Art 54 (1) of the draft withdrawal agreement provides for the conversion of EU trade marks, registered Community designs and plant varieties into corresponding British IP rights:

"The holder of any of the following intellectual property rights which have been registered or granted before the end of the transition period shall, without any re-examination, become the holder of a comparable registered and enforceable intellectual property right in the United Kingdom under the law of the United Kingdom:

(a) the holder of a European Union trade mark registered in accordance with Regulation (EU) 2017/1001 of the European Parliament and of the Council shall become the holder of a trade mark in the United Kingdom, consisting of the same sign, for the same goods or services;
(b) the holder of a Community design registered and, where applicable, published following a deferral of publication in accordance with Council Regulation (EC) No 6/2002 shall become the holder of a registered design right in the United Kingdom for the same design;
(c) the holder of a Community plant variety right granted pursuant to Council Regulation (EC)No 2100/94 shall become the holder of a plant variety right in the United Kingdom for the same plant variety."

Art 55 (1) requires the registration of converted trade marks, design registrations and plant varieties to be free of charge.  The Intellectual Property Office and Plant Variety Rights Office will use data supplied by the EU Intellectual Property Office and Community Plant Variety Office pursuant to art 55 (3).  The UK will honour international trade mark and design applications design applications that designate the European Union during the implementation period pursuant to art 56.

Those new converted rights would be revoked, declared invalid or null and void or cancelled automatically pursuant to art 54 (3) if the corresponding EU right were revoked, declared invalid or null and void or cancelled by any administrative or judicial proceedings which was ongoing before the end of the implementation period.  However, the article makes clear that that would not happen if the grounds of revocation, invalidity or cancellation did not apply to the UK.  In particular, art 54 (5) (b) provides that a converted trade mark will not be revoked on grounds of no genuine use in the EU if it has been put to genuine use in the UK even if the corresponding EU trade mark is revoked.

The priority date for a converted trade mark will be the same as for the corresponding EU trade mark (art 54 (5) (a)). The date of filing or priority of a converted registered design or plant variety right shall be the same as for the corresponding Community right (art 54 (6) (b)). Arr 54 (5) (c) entitles the proprietor of a converted trade mark that has acquired a reputation in the EU before the end of the implementation period to sue under s,10 (3) of the Trade Marks Act  1994.   The renewal date for converted trade marks and registered designs in the UK would be the same as for the corresponding EU trade mark or registered Community design in the EU (art 54 (4)).  The term of protection for a converted registered design or plant variety right in the UK shall be at least as long as the remaining period of protection for the corresponding registered Community design or plant variety in the EU (art 54 (6) (a)).

Where an application for an EU trade mark or registered Community design is made but not granted during the implementation period. art 59 (1) entitles the applicant to apply for  UK trade mark or, as the case may be, registered design with the same priority date as the EU trade mark or registered Community design so long as the application is made within 9 months of the end of the implementation period. Art 59 (2) provides a similar right for applicants for Community plant varieties save that the application must be made within 6 months of the end of the implementation period.

Unregistered Community Designs
The UK is required by art 57 to create an unregistered design right equivalent to unregistered Community designs and to protect unregistered Community designs that come into being before the end of the implementation period under that new right.

Database Rights
Art 58 (1) requires the UK to continue to recognize database rights that are acquired before the end of the trnsition period  to the same extent as they are protected in the remaining member states provided that holders of those rights continue to comply with the qualification requirements set out in art 11 of Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases (OJ L 77, 27.3.1996, p. 20).  Conversely, British nationals will continue to enjoy database rights that are acquired in the remaining member states before the end of the implementation period.

Supplemental Protection Certificates
Applications to the IPO for supplemental protection certificates in respect of plant protection and medicinal products within the transition period but not yet granted will be treated as though they had been granted during the implementation period (art 60).

Geographical Indications
Art 54 (2) requires the British government to pass legislation to protect in the UK geographical indications, designation of origin or traditional specialities in the same way and to the same extent as they are protected in the EU.  Any such right subsisting in the EU at the end of the implementation period will continue to apply in the UK after the end of that period,  Such right shall cease to apply in the UK if it ceases to apply in the EU.

Further Information
It is stressed that these arrangements shall apply only if the withdrawal agreement comes into force. Should it fail to do so readers should consult the guidance that has been given by the British government in the event of the UK's departure from the EU without a withdrawal agreement (see IP after Brexit - the Government's Guidance  22 Oct 2018 NIPC Law, Patents if there’s no Brexit Deal 3 Oct 2018 NIPC Brexit, Geographical Indications after Brexit 6 Oct 2018 NIPC Branding, EU Trade Marks and Community Designs after Brexit 15 Oct 2018 NIPC Brexit, Copyright and Related Rights after Brexit 19 Oct 2018 NIPC Brexit, and Plant Breeders' Rights after Brexit 21 Oct 2018 NIPC Brexit).

Anyone wishing to discuss this article or IP generally should call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

A Withdrawal Agreement Reading Guide

Jane Lambert

Art 50 (2) of the Treaty on European Union requires the European Union to negotiate and conclude an agreement with a member state that has given notice of its intention of leaving the EU that sets out the arrangements for its withdrawal, and takes account of the framework for its future relationship with the EU.  The draft agreement that has been negotiated by officials for the British government and European Union is the agreement contemplated by that provision.  It is intended to come into effect at 23:00 on 29 March 2019 and remain in force until 31 Dec 2020.   It is hoped that a new agreement concluded in accordance with the framework for the future relationship between the UK and EU will take its place to govern relations between the UK and the EU on 1 Jan 2021.

The draft withdrawal agreement can be downloaded from the website of the Department for Exiting the European Union at 14 November Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community or from the website of the Taskforce on Article 50 negotiations with the United Kingdom at the Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, as agreed at negotiators' level on 14 November 2018.  A copy of the political declaration on the future relationship can also be downloaded from the Department for Exiting the EU website.

The draft withdrawal agreement is a hefty document consisting of 585 pages but it is not densely typed. Many of its pages contain just a few lines of text in a fairly large font.  Like most other international agreements it consists of

• a preamble, 
• 185 articles in the body of the draft, and 
• a number of protocols and annexes.

The 185 articles are divided into 6 Parts covering "Common Provisions", "Citizens' Rights", "Separation Provisions", the "Implementation" or "Transition Period", "Financial Provisions" and "Institutional and Final Provisions". Some of those Parts are very long and are further subdivided into Titles and Chapters. There are protocols on Northern Ireland, the sovereign bases in Cyprus and Gibraltar.  The annexes cover "Social Security Coordination", "Provisions of Union law referred to in Article 41(4)", "Time limits for the situations or customs procedures referred to in Article 49 (1)", "List of Networks, Information Systems and Databases referred to in Articles 50, 53, 99 and 100", "Euratom", "List of Administrative Cooperation procedures referred to in Article 98" "List of Acts/Provisions referred to in Article 128(6)", "Rules of Procedure of the Joint Committee and Specialised Committees" and "Rules of Procedure."

To assist readers to find their way around the draft withdrawal agreement, the government has published an Explainer for the agreement on the withdrawal of the United Kingdom of Great Britain and NorthernIreland from the European Union.   Consisting of 56 pages, this "Explainer" is also a pretty heavy document but it is written in non-technical language and greatly facilitates navigation of the draft agreement,

The outline political declaration is much more concise.   It consists of 6½ pages of bullet points divided into 6 Parts covering "Initial Provisions", "Economic Partnership", "Security Partnership", "Institutional Arrangements" and the "Forward Process."

Art 50 (2) requires any draft withdrawal agreement to be approved by the remaining member states acting on a qualified majority and also by the European Parliament.   It will also have to be approved by the British Parliament many members of which and peers have already expressed misgivings.   I am in no position to judge whether this is a good deal or a bad deal for the UK but the alternative is no deal at all and the guidance notes published by the government on How to prepare if the UK leaves the EU with no deal are far from encouraging.

Anyone wishing to discuss this reading guide or Brexit, in general, should call me on +44 (0)20 7404 5252 or send me a message through my contact form.

Brexit Briefing October 2018

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Source Wikipedia 

Jane Lambert

The consequences for the United Kingdon of leaving the EU without a withdrawal agreement on 29 March 2019  anticipated by Her Majesty's government are set out in a series of guidance notes linked to How to prepare if the UK leaves the EU with no deal.  The first batch was published on 23 Aug 2018 and discussed in my article And if there is no deal .................. 24 Aug 2018. In many areas such as, for example, civil litigation which I covered in Trans-Border Litigation after Brexit there will be additional uncertainty, inconvenience and expense and even the possibility of injustice.

Ministers and negotiators on both sides have said that 95% of a draft withdrawal agreement has been agreed but the question of how to retain an open border between the Republic of Ireland and Northern Ireland remains unresolved.  The problem can best be understood in the Infographic on the EU's 'backstop' proposal which was published on 11 June 2018.  An open border is possible because of

• Common tariffs and rules of origin apply to non-EU goods 
• Common VAT and excise area 
• Common product safety and quality standards (e.g. food, chemicals and consumer goods), and a 
• Single epidemiological unit with common rules for animal health and welfare.

After the UK leaves the EU there will be divergence in all those areas necessitating checks and inspections of goods travelling across the border, These need not necessarily take place at the border crossing but they have to take place somewhere.  

The Commission's proposal is for Northern Ireland to remain aligned with the Irish Republic and for checks to take place at the British and Irish ports,  That is rejected by the British government and some Northern Irish politicians as tantamount to annexation of the province.  The counterproposal is a common rulebook for the EU and the whole of the UK.  The counterproposal is opposed by many in the UK and has been rejected in terms by the EU. There has not really been much movement on those issues since July and neither side seems to show any sign of blinking.

Over the last few weeks I have been writing about the consequences of Brexit on any basis for:

• patents
• geographical indications
• data protection
• EU trade marks and Community designs
• copyrights and related rights
• plant varieties, and
• civil litigation.

The government also updated its advice on IP in IP and Brexit; The Facts on 26 Oct 2018.

The measure of legal protection for brands, designs, technology and creativity is a factor to be taken into account by manufacturers and distributors when making investment and location decisions.  A picture is now beginning to emerge as to what that protection will be.  Most would regard a regime consisting entirely of national IP rights as inferior to the current mix of national and EU rights but some may regard it as enough.  Every business must make its own assessment.

Anyone wishing to discuss this article should call me on +44 (0)20 7404 5252 during office hours or sent me a message through my contact form.

Trans-Border Litigation after Brexit

Jane Lambert

According to Paper 4 (Civil Jurisdiction and Judgments) of the Bar Council's Brexit Papers, "England and Wales is the leading centre for dispute resolution worldwide." The legal sector generated £3.3 billion of revenue in 2015. The authors of that paper observe:

"That fact that England and Wales is such a significant hub for international dispute resolution has important knock-on advantages for the UK as a whole. There is, of course, the fee income and tax revenues which flow from the sector. However, there are other advantages too. Given the widespread acceptance of English law as an effective law for governing commercial relationships, and the choice of the English courts as a corollary of this, UK parties can often negotiate that English law be the law which governs their commercial relationships with international parties and that their disputes will be resolved in the English courts. This gives those UK parties the “home advantage” of being able to use a law and courts with which they are familiar, even though they are trading internationally."

This country's pre-eminence as a centre for dispute resolution results from having reciprocal arrangements with a large number of countries around the world including, in particular, the other EU member states. 

The Bar Council's Brexit paper warns that the pre-eminence of England and Wales will be damaged if appropriate steps are not taken to ensure that the jurisdiction of the English courts and the enforcement of English judgments are protected.  At present, the courts' jurisdiction and the enforcement of their judgments are assured by Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters,  That regulation will cease to apply to the UK when it leaves the European Union except in so far as it may be preserved for an implementation period by the proposed withdrawal agreement or incorporated into English law by s.3 of the European Union (Withdrawal) Act 2018.

A joint paper by the Department for Business, Energy and Industrial Strategy and the Department of Justice which was published on 13 Sept 2018 and entitled Handling civil legal cases that involve EU countries if there’s no Brexit deal state that  in the absence of a deal with the EU, the following rules will cease to apply to the UK in addition to Regulation 1215/2012:

• The Enforcement Order, Order for Payment and Small Claims Regulations: which establish EU procedures for dealing with, respectively, uncontested debts and claims worth less than EUR5,000
• The EU/Denmark Agreement: which provides rules to decide where a case would be heard when it raises cross-border issues between Denmark and EU countries, and the recognition and enforcement of civil and commercial judgments between the EU and Denmark, and
• The Lugano Convention: which is the basis of our civil judicial relationship with Norway, Iceland and Switzerland: This would not prevent us from applying to re-join the Lugano Convention in our own right at a later date.

Regulation 1214/2012, the EU Denmark Agreement and Lugano Convention determine the jurisdiction in which a case is to be brought.   Those instruments also require courts in other countries to stay proceedings once an action in another court begins and to enforce any judgment of that court as though it were a decision of their own.

When those instruments cease to apply to the UK there will be nothing to prevent forum shopping,  actions in the same matter proceeding in the UK and an EU member state, a proliferation of anti-suit injunctions and delays and complications on enforcement.  As courts in the UK will lose the right to refer preliminary issues to the Court of Justice of the European Union, exclusive jurisdiction clauses may be disregarded.  All this is likely to increase costs and give rise to uncertainty that did not exist before.  Businesses do not like such uncertainty. It is not surprising that the Bar Council has heard of parties being advised not to choose English law to govern their contracts where previously it would have been an almost automatic choice or of litigation being started in other member states that would otherwise have begun in London

In intellectual property litigation, these difficulties will be compounded by courts in the UK ceasing to be EU trade mark and Community design courts and a gradual divergence of trade mark and design law.  Also, it is hard to see how the UK could remain a party to the Unified Patent Court Agreement. This matters because the strength of the local protection of brands, design and technologies is one of the factors that investors take into account when deciding where to locate and even maintain manufacturing or distribution facilities.

Other reasons for English preeminence were the Privy Council as the court of last resort for countries in the Commonwealth and the use of the English language.  The importance of the Privy Council as the hub of the common law world has diminished as more and more countries of the Commonwealth have abolished the right of appeal to London.  As for the use of English, the Netherlands has already established a commercial court in Amsterdam in which proceedings can be conducted in English (see Jane Lambert  An English Speaking Commercial Courts in the Netherlands 28 Jan 2017 NIPC News) and there are reports that other countries are doing the same (see Kate Wilson Paris opens English speaking court 28 Feb 2018 Economia).

The Bar Council has urged the government to enter into an agreement based on the Denmark-EU Jurisdiction Agreement and also to sign and ratify the Lugano II Convention and the 2005 Hague Convention on the Choice of Court Agreements,  According to the joint paper 

"In the event of no deal, we would take the necessary steps to formally re-join the 2005 Hague Convention on Choice of Court Agreements in our own right (we currently participate because of our EU membership). It is anticipated that the convention would come in to force across the UK by 1 April 2019,"

If there us an implementation period pursuant to a withdrawal agreement it is hoped that British negotiators will use the time to negotiate agreements similar to Lugano and Danish agreement.  The government has already indicated that it aims to do so in paragraph 1.7.7. of its white paper, The future relationship between the United Kingdom and the European Union.

Anyone wishing to discuss this article or any of the subjects mentioned in it should call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.