One of the arguments in favour of Brexit before the 2016 referendum was that it would enable the UK to join the North American Free Trade Agreement ("NAFTA") or some other free trade agreement with the USA. Donald Trump terminated NAFTA in his first presidency but he replaced it with the United States-Mexico-Canada Agreement ("USMCA"). He has now finished USMCA by imposing punitive tariffs on Canadian and Mexican imports and talking about annexing Canada.
Negotiations between HMG and the US government on a possible trade deal started during Mr Trump in his first term and continued during the Biden administration. On 8 May 2025, the two governments announced the General Terms for the US and UK economic prosperity deal. This is not a comprehensive free trade agreement. The document is only 5 pages long and covers tariffs, non-tariff barriers, digital trade, alignment and collaboration on economic security, commercial considerations and opportunities and other matters. There is no provision for dispute resolution, and the only mention of intellectual property is confirmation in para 6 that both governments intend to discuss high-standard commitments related to intellectual property rights protection and enforcement.
An update was published by Mr Trump and Sir Kier Starmer on progress towards the implementation of the agreement on the first day of the G7 summit on 16 Jun 2025. I will monitor and report on progress in this publication.
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Shortly before the UK-EU Summit on 19 May 2025, the Intellectual Property Office announced that the doctrine of exhaustion of rights will continue to apply to the UK even though the UK has left the European Union and notwithstanding that the doctrine will not apply in the opposite direction (see IPO press release Certainty for businesses and choice for consumers as UK maintains IP rights regime15 May 2025). In view of the furore over the so-called reset of relations between the UK and EU with threats from the Leader of the Opposition and Reform UK to reverse the deal it is surprising that the IPO's announcement has received so little attention in the press (see Badenoch vows to reverse Starmer's EU Deal The Telegraph 19 May 2022).
Exhaustion of Rights
The doctrine of exhaustion of rights was developed by the Court of Justice of the European Union to reconcile the tensions between arts 30 and 34 of the Treaty on the Functioning of the European Union. Art 30 provides:
"Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature."
Arts 34 and 35 supplement art 30 by prohibiting restrictions on imports and exports. However, art 36 allows some exceptions:
"The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States."
"[7] Inasmuch as it provides an exception to one of the fundamental principles of the common market, Article 36 in fact only admits of derogations from the free movement of goods where such derogations are justified for the purpose of safeguarding rights which constitute the specific subject-matter of this property. [8] In relation to trade marks, the specific subject-matter of the industrial property is the guarantee that the owner of the trade mark has the exclusive right to use that trade mark, for the purpose of putting products protected by the trade mark into circulation for the first time, and is therefore intended to protect him against competitors wishing to take advantage of the status and reputation of the trade mark by selling products illegally bearing that trade mark. [9] An obstacle to the free movement of goods may arise out of the existence, within a national legislation concerning industrial and commercial property, of provisions laying down that a trade mark owner' s right is not exhausted when the product protected by the trade mark is marketed in another Member State, with the result that the trade mark owner can [oppose] importation of the product into his own Member State when it has been marketed in another Member State. [10] Such an obstacle is not justified when the product has been put onto the market in a legal manner in the Member State from which it has been imported, by the trade mark owner himself or with his consent, so that there can be no question of abuse or infringement of the trade mark. [11] In fact, if a trade mark owner could prevent the import of protected products marketed by him or with his consent in another Member State, he would be able to partition off national markets and thereby restrict trade between Member States, in a situation where no such restriction was necessary to guarantee the essence of the exclusive right flowing from the trade mark."
"So, application of a national law which would give the trade-mark owner in the importing State the right to oppose the marketing of products which have been put into circulation in the exporting State by him or with his consent is precluded as contrary to Articles 30 and 36. This principle, known as the exhaustion of rights, applies where the owner of the trade mark in the importing State and the owner of the trade mark in the exporting State are the same or where, even if they are separate persons, they are economically linked. A number of situations are covered: products put into circulation by the same undertaking, by a licensee, by a parent company, by a subsidiary of the same group, or by an exclusive distributor."
Brexit
Although art 61 of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community provided that intellectual property rights which were exhausted both in the EU and in the UK before the end of the transition period under the conditions provided for by EU law should remain exhausted both in the EU and in the UK, the doctrine ceased to apply to the UK after the end of that period. The IPO published guidance entitled Exhaustion of IP rights and parallel trade on 30 Jan 2020.
"The concept of exhaustion has built up over many decades. When the UK was part of the EU, the UK was part of the EU’s regional exhaustion regime. The principle of exhaustion of rights is derived from the provisions concerning the prohibition of qualitative restrictions in the Treaty on the Functioning of the EU (and the EEA Agreement) as interpreted by EU case law and was specifically recognised in various EU Directives as implemented into domestic legislation. As a result of domestic legislation concerning EU exit this principle continues to have the same effect in domestic law as it had before the end of the implementation period (the UK’s unilateral application of the EEA regional regime). In particular, the principle of exhaustion is relevant to section 7A of the Registered Designs Act 1949, sections 18 and 27 of the Copyright, Designs and Patents Act 1988 and section 12 of the Trade Marks Act 1994."
Between 7 June and 31 Aug 2021, the IPO consulted on the following options:
UK’s unilateral application of a regional EEA regime, otherwise known as a “UK+” regime: Inbound parallel import of goods only automatically permitted from EEA countries (assuming there is separate authorisation for regulated goods such as medicines);
National: Inbound parallel import of goods not automatically permitted from any country;
International: Inbound parallel import of goods automatically permitted from any country (assuming there is separate authorisation for regulated goods such as medicines); and
Mixed: Ability to parallel import will depend on any decision on treatment for a specific IP right, good or sector.
None of those options provided for parallel export of goods except to countries with an international regime. The consultation document explored each of those options. A response form asked consultees for their views.
Anyone wishing to discuss this article may call me on +44 (0)20 7404 5252 during normal office hours or send me a message through my contact page at any time.
Intellectual Property Enterprise Court (Michael Tappin KC) Seraphine Ltd v Mamarella GmbH [2024] EWHC 425 (IPEC) (1 March 2024)
As is well known, our good friends on the other side of the North Sea are renowned for their sense of humour. Since I have to write an article on the riveting subject of service of process in Germany after Brexit I thought it would be fun to share this clip with you, It is repeated on German television every New Year's Eve. His Majesty the King referred to it in his speech at a banquet in his honour on his recent state visit. I was introduced to it by a Swiss friend who tells me that it is also popular in Austria and the German-speaking cantons of Switzerland.
Seraphine Ltd. ("Seraphine") manufactures a range of maternity garments. Mamarella GmbH ("Mamarella") distributes such clothing in Germany. Seraphine alleged that Mamarella had infringed unregistered Community designs that it claims. It issued proceedings in the Intellectual Property Enterprise Court ("IPEC") on 13 June 2023.
The Applications
Seraphine attempted to serve these proceedings on Mamarella without the court's permission relying on the Anglo-German Convention of 20 March 1928 on Legal Proceedings in Civil and Commercial Matters. Mamarella applied for service to be set aside on 17 July 2023. Seraphin served Mamarella again under the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters whereupon Mamarella issued another application challenging the jurisdiction of the court and requesting a stay pending proceedings in Germany. Seraphine issued its own application for permission to amend its claim form and particulars of claim and both parties sought leave to adduce expert evidence on German law in relation to the stay application. Those applications came on before Mr Michael Tappin KC sitting as a deputy judge of the High Court on 26 Feb 2024. He handed down judgment on 1 March 2024 (see Seraphine Ltd v Mamarella GmbH [2024] EWHC 425 (IPEC)).
Choice of Jurisdiction Clause
CPR6.33 sets out a number of grounds under which a claim form can be served outside the United Kingdom without the permission of the court. One of them is CPR6.33 (2B) (b):
"The claimant may serve the claim form on a defendant outside the United Kingdom where, for each claim made against the defendant to be served and included in the claim form— .................................... (b) a contract contains a term to the effect that the court shall have jurisdiction to determine that claim;"
"(i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the Court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it."
Mr Tappin observed that the Court of Appeal had added at para [9 of his judgment that:
"(a) a "plausible evidential basis" is an evidential basis showing that the claimant has the better argument and the burden of proof is on the claimant, (b) the court should seek to overcome evidential difficulties and arrive at a conclusion if it 'reliably' can using judicial common sense and pragmatism, (c) part (iii) of the test applies where the court is simply unable to form a conclusion on the evidence before it as to who has the better argument; to an extent it moves away from a relative test and introduces a test combining good arguable case and plausibility of evidence."
Whether there was a Contract
Seraphine relied on a set of standard terms and conditions some of which had been struck out. It was headed "Seraphine Limited Terms and conditions of sale" and had been signed by both parties. Clause 25 of those terms provided:
"(a) The Contract and any dispute or claim arising out of or in connection with it or its subject matter or formation (whether or not such dispute or claim is contractual) shall be governed by, and construed in accordance with, the laws of England and Wales.
(b) The Company and the Buyer irrevocably agree that, subject to the following sentence, the courts of England and Wales shall have exclusive jurisdiction over any claim or matter arising under or in connection with the Contract (whether or not such dispute or claim is contractual) and that accordingly any proceedings in respect of any such claim or matter shall be brought in such courts. Nothing in the proceedings [sic] sentence shall limit the Company's right to take proceedings against the Buyer in any other court of competent jurisdiction."
Seraphine contended that the alleged infringement of its unregistered Community designs was a breach of contract because clause 15 (a) of those terms and conditions stated that:
"The Buyer shall ensure that each reference to and use of any of the Company's IPR by the Buyer is in a manner from time to time approved by the Company and is accompanied by an acknowledgement, in a form approved in writing by the Company, that the same is IPR of the Company."
Mamarella contended that the terms only applied to "Contracts" that had been made upon the acceptance of "Orders" as defined by clause 2 of the terms. It conceded that it had placed orders but these fell outside that definition. It followed that the contracts formed upon the acceptance of the orders were not "Contracts" and that clause 25 did not apply to them.
Mr Tappin was not persuaded by Mamarella's argument. It was inconsistent with a provision that the terms override any terms or conditions submitted proposed or stipulated by the buyer in whatever form and at whatever time, whether written or oral, which are expressly waived and excluded. Mamarella had ordered goods from Seraphine Mamaerlla had also relied on the terms in a separate dispute over the performance of an order. He held at para [24] of his judgment that Seraphine had a good arguable case that the orders that it had accepted fell within the agreed terms including the exclusive jurisdiction clause. He concluded at [28] that Seraphine was entitled to serve the proceedings out of the jurisdiction without the court's permission.
Other Directions
The deputy judge gave permission to Seraphine to amend its particulars of claim to state how it had acquired unregistered Community design rights in the designs that were already the subject of a claim. However, he refused to allow Seraphone to claim infringement of unregistered Community designs in earlier designs as there was no evidence that Mamarella had accepted terms containing an exclusive jurisdiction clause in respect of disputes over those earlier designs.
As Mamarella had consented to an exclusive jurisdiction clause Mr Tappin refused a stay pending proceedings in Germany either on forum non conveniens or case management grounds. It followed that there was no longer a need to consider either side's application for expert evidence on German law relating to a stay.
Finally, the deputy judge recorded at para [40] of his judgment that neither party had pressed him to determine whether Seraphine's purported service under the 1928 Convention was valid.
Further Information
Anyone wishing to discuss this article further may call me on +44 (0)20 7404 5252 during normal UK business hours or send me a message through my contact page.
As I said in How Brexit has Changed IP Lawon 17 Jan 2022, the European Union (Withdrawal) Act 1988 incorporated Council regulations and general principles of European law into the laws of England and Wales, Scotland and Northern Ireland at 23|:00 from 31 Dec 2020 when EU law ceased to apply directly to the UK. The incorporated principles entrenched EU legislation and judgments of the Court of Justice of the European Union into domestic law necessitating special procedures to depart from them. REUL abolishes the entrenched status of retained EU Law and much of the implementing legislation.
Clause 1 (1) of the Bill, as introduced, would have revoked all "EU-derived subordinate legislation" and "retained direct EU legislation" on 31 Dec 2023. "EU-derived subordinate legislation" was essentially secondary legislation made under s.2 (2) of, the
European Communities Act 1972. S.1 (1) of the Act limits the revocation to the legislation listed in Sched 1 of the Acr. Part 1 of that schedule lists subordinate legislation and Part 2 retained direct EU legislation.
Yesterday a "Creative Economic Conference" took place at the University of Bradford as part of the Bradford Literature Festival. One of the events was an interview of the Rt Hon Rachel Reeves MP by the economist, Mr Andy Haldane. I attended the interview because Ms Reeves is likely to be the next Chancellor of the Exchequer should the Labour Party win the next general election. Sadly, it took place at the same time as two other events I would gladly have attended, a Roundtable Discussion on Artificial Intelligence and a Trade Relations Roundtable on Business with India.
In her interview, Ms Reeves described the UK's Trade and Cooperation Agreement as a "botched deal" so I asked her how the Labour Party proposed to improve the deal were it to win the next general election in the short Q&A that followed. To her credit, the Shadow Chancellor gave me a very straight answer. She did not promise negotiations to rejoin either the European Union or even the Single Market or Customs Arrangement but she did seek improvements to the Agreement in such areas as veterinary controls, the mutual recognition of professional qualifications and participating in Horizon Europe again.
That was not enough to persuade me to support the Labour Party but it is probably as much as any of the unionist parties in the UK can offer. Scottish, Northern Irish and probably Welsh nationalists can go further because the Conservative Party is weak in those nations and the prospect of rejoining the EU is part of the case for secession or annexation by the Republic of Ireland. Until there is a consensus for rejoining the EU in England the remaining member EU member states will not take an application from the UK to rejoin the EU seriously. Such a consensus would require a change of attitude towards the EU on the part of the Conservative Party. Similar changes of attitude on similarly important issues have occurred in the past but a volte-face on EU membership on less favourable terms than before is not on the cards yet.
Anyone wishing to discuss this article may call me on 020 7404 5252 during office hours or send me a message through my contact form.
During the 2016 referendum campaign, I wrote that the United Kingdom's withdrawal from the European Union would profoundly affect the laws that protect investment in branding, design, technology and creativity (see Were we to go - what would Brexit mean for IP26 Feb 2016 NIPC Law). I noted that the nature and extent of that change would "depend on the sort of relationship with the rest of the EU that we could negotiate in the two years allowed by art 50 (2) of the Treaty on European Union." After a plurality of voters had voted for withdrawal, I followed those negotiations in this blog in order in order to make an educated guess as to how this country's IP law would develop.
Although there may still be further negotiations between the UK and the European Commission over the Northern Ireland Protocol for the reasons I discussed in British Proposals for Renegotiating the Northern Ireland Protocolon 29 July 2021, they are unlikely to result in major changes to this country's IP laws. The legal framework following Brexit is set out in my article How Brexit has changed IP Lawof 17 Jan 2021 and presentation of 26 Jan 2021 (slides and notes).
HMG has embarked on a great experiment of decoupling from neighbours and allies with shared interests in the world's richest trading bloc and forming new relationships with fast growing economies on the other side of the world. It is by no means certain that that experiment will succeed and my change of focus should not be seen as an endorsement of the experiment. But it is more relevant to the startups and other SME and their professional advisors that form the bulk of my clientele and require practical advice on IP prosecution, licensing and enforcement in the UK and any new markets that may open up as a result of the government's activities.
To reflect the change of focus I shall change the name of this publication from "NIPC Brexit" to "NIPC Internatiomal" and replace the monthly "Brexit Briefings" with targeted updates. Anyone wishing to discuss this article may call me on +44 (0)20 7404 5252 during normal business hours or send me a message through my contact form.
.To understand the agreement it is necessary to refer to art 50 (2) of the Treaty of European Union:
"A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union."
Some of the provisions of the Withdrawal Agreement such as those governing the transitional or implementation period in which EU law continues to apply to the UK will lapse at 23:00 on 31 Dec 2020. Other provisions such as those governing intellectual property or Northern Ireland will continue indefinitely. The framework for the UK's future relationship with the EU was the Political Declaration setting out the framework for the future relationship between the European Union and theUnited Kingdom("the Political Declaration"). The EU-UK Trade and Cooperation Agreement is intended to govern the UK's relationship with the EU from the end of the implementation period at 23:00 on 31 Dec 2020 in accordance with the Political Declaration.
The draft trade and cooperation agreement is 1,246 pages long and consists of the body and a very large number of annexes. The body is just under 400 pages long and is divided into 7 Parts subdivided into Titles and in some cases further divided into chapters. The remaining pages are the annexes.
The structure of the body is as follows:
Part One: common and institutional provisions in the Agreement;
Part Two: trade and other economic aspects of the relationship, such as aviation, energy, road transport, and social security;
Part Three: cooperation on law enforcement and criminal justice;
Part Four: thematic issues, notably health collaboration;
Part Five: participation in EU Programmes,
Part Six: dispute settlement;
Part Seven: final provisions.
The most important economic provisions appear to be in Part Two. Title 1 of Part 2 covers trade in goods and Title II trade in services. Services that are covered in this title include telecoms, financial services and legal services. Provision is also made in Part Two for digital trade, capital m movements and intellectual property.
Because of the sheer length of the document, it will take me some time to read and digest it. Anyone wishing to discuss this article or brexit generally may call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact page. I take this opportunity of wishing all my readers a happy New Year.
The questions that I hoped might be addressed in this webinar were "What is to become of the Unified Patent Court?" and "What is to happen to cross-border litigation after Regulation (EU) No 1215/2012 ceases to apply to the UK?" The first question was addressed because I asked it as did Fidelma Macken. Sadly, nobody raised the second.
Mr Saunders noted that a vast volume of EU legislation has been absorbed into the laws of the United Kingdom. From 1 Jan 2021 judges in this country will no longer refer points of law relating to that legislation to the Court of Justice of the European Union under art 267 of the Treaty on the Functioning of the European Union. As British judges will have to do that for themselves he did not think it would be long before noticeable divergencies in the interpretation of the same instrument emerged.
Mr Newman agreed and opined that Irish courts would become less and less likely to follow English decisions as a consequence. However. most of his presentation focused on the Commercial Court of the Republic of Ireland. and a proposal to create an intellectual property list within that Court. Sir Robin said that Ireland had a great opportunity as the main common law jurisdiction to take much of the work that will no longer go to London but it was an opportunity that Ireland was in danger of losing. Ireland had yet to ratify the Unified Patent Court Agreement and failed to send judges to judicial forums. The Netherlands was also a small country but the Dutch courts and lawyers had made a big contribution to the development of European IP law.
On the question of what will happen to the Unified Patent Court, Sir Robin thought that the agreement will have to be renegotiated. Annex II of the Agreement allocated chemistry and pharmaceutical work to London. Sir Robin doubted whether businesses in those industries would want to litigate their disputes in Milan. Judges and lawyers from the UK had contributed massively to the preparations of the Court including the procedural rules. He was saddened by his country's withdrawal from the project and believed that the UK would be missed.
Although I enjoyed the presentations I think the webinar would have been improved greatly by contributions from IP Bar Association, the IP Lawyers Associations and the Chartered Institutes of Patent and Trade Mark Attorneys. Sir Robin suggested that the Irish might send for Mr Justice Birss who would be an excellent speaker. Perhaps, Lord Justice Arnold might be even better as it was he who reformed the Patents County Court and created the Small Claims Track.
Anyone wishing to discuss this article or any of the topics mentioned in it should call my clerk on 07986 948267 or send me a message through my contact page.
The British proposals are structured very differently from the draft agreement of 18 March 2020 but they are a substantial set of documents and contain many provisions upon which the Commission ought to be able to agree. It is said that Mr Frost's letter irritated many on the continent but they will be aware that Mr Frost and his political masters have an audience of Conservative backbenchers and a Eurosceptic press. Another round of negotiations begins today on an agreed agenda. For the first time since negotiations began, both sides' proposals have been exchanged.
If there is to be an extension to the 11th-month transition or implementation period it has to be agreed in June. A bill to extend that period has been introduced into the House of Commons by Sir Edward Davey, acting leader of the Liberal Democrats. It is supported by the Scottish National Party, Plaid Cymru, the Green Party, the Alliance Party and the Social Democratic and Labour Party in Northern Ireland but not the Labour Party and it has been welcomed by Monsieur Barnier in a letter dated 25 May 2020 (a copy of which can be downloaded from this blog's EU negotiations page. Labour's reticence has surprised some but it can probably be explained by the fact that he party under its new leader is doing rather well in the polls and sees no advantage in picking fights that it can't win,
Many commentators are gloomy about the outcome of the new relationship negotiations but I am not so sure. A lot of work has been done on the British draft agreements which would have been pointless had they been intended to fail. The UK needs continued access to the single market more than its negotiators concede because there is no obvious alternative. With the highest number of coronavirus deaths in the world and record unemployment, the US economy is in an even worse mess than ours. It now has race riots in its major cities with which to contend. Relations with the other economic superpower have deteriorated still further with the Chinese government's clampdown on Hong Kong.
Anyone wishing to discuss this article or the new relationship negotiations, in general, should call 020 3819 8725 while lockdown continues or message me through my contact form
While that is not the outcome for which many businesses, politicians and individuals had hoped and campaigned since the 2016 referendum, it does at least bring certainty. The UK's departure from the EU on 31 Jan 2020 will be followed by an 11 month implementation period during which EU law will remain in force at the end of which there will be a new relationship with the 27 remaining EU member states. The precise nature of that relationship is not yet clear but the parties have agreed a Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom.
Clause 33 of the Bill will insert a new s.15A into the European Union (Withdrawal) Act 2018 which will prevent ministers from agreeing to any extension of the implementation period. Previous free trade agreements between the EU and third countries have taken years to negotiate. While there is nothing to prevent negotiations on a new relationship between the UK and EU from continuing after the 31 Dec 2020 the legal framework between the parties that is to be preserved by the withdrawal agreement will fall away at the end of this year unless something is agreed to continue or replace it. That could be just as disruptive for businesses and individuals in the UK and the remaining member states as British withdrawal from the EU without a withdrawal agreement would have been.
Over the coming months, this publication will monitor negotiations between the UK and EU on the future relationship. It will report changes in the law, particularly those relating to intellectual property. It will look out for any opportunities that may arise from the UK's departure from the EU such as new trade agreements with the USA and other countries.
Anyone wishing to discuss this article may call me on +44 (0)20 7404 5252 or send me a message through my contact form.
The UK did not leave the European Union at 23:00 last night for the reasons I explained in Johnson accepts art 50 (3) Extension of 28 Oct 2019 and it is unlikely to do so until after 13 Dec 2019 at the earliest. Instead, there is to be a general election on 12 Dec 2019. Brexit is undoubtedly an issue in that election and at present, it is probably the most important one but that may change as the campaign develops.
Negotiating yet another withdrawal agreement and putting any renegotiated terms with an option to remain to the public in a second confirmatory vote which appears to be the policy of the Labour Party; and
Breaking off negotiations for a withdrawal agreement and just leaving which appear to be policies of the Brexit Party and the United Kingdom Independence Party.
Business owners and members of the public at large will have to decide for themselves which works best for them when casting their vote. Regardless of their personal preferences, they will have to watch the campaign and follow the polls closely so that they can take investment decisions that will take advantage of, or protect their business from, the consequences of a particular outcome. For instance, if they envisage that the election will result in an environment that will make it harder or more expensive to conduct business with the 27 remaining member states from the UK they may wish to accelerate the transfer of part of their undertaking to one of those remaining member states.
As this is a legal and not a political blog I do not expect to say much on the campaign. Indeed, there is unlikely to be a November Brexit Briefing or anything else until after 13 December 2019. Anyone wishing to discuss this article or brexit generally may call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact page.
Operation Yellowhammer is the code name for the UK government's contingency planning in the event of a no-deal brexit. It is also the title of a short document headed "Operation Yellowhammer" setting out the British government's worse case planning assumptions as of 2 Aug 2019. It was published pursuant to a Humble Address to the executive made on 9 Sept 2019.
The paper addresses the following risk areas:
Transport systems
People crossing borders
Key goods crossing borders
Healthcare services
UK energy and other critical systems
UK food and water supplies
UK Nationals in the EU
Law enforcement implications
Banking and finance industry services
Brexit and the Irish border
Specific risks to overseas territories and Crown dependencies (including the effect of Brexit on Gibraltar), and
National Security.
The basic assumption is that the EU will be "as a whole unsympathetic" and that public and business preparedness will be at a low level owing (among other things to "brexit fatigue" following two previous extensions to the art 50 (2) notice period.
It is important to stress that this blog is not a campaign document. Its purpose is to alert clients and others to the factors that need to be taken into account when planning their investments and expenditure over the next few months. Should anyone wish to discuss this article or brexit generally, call 020 7404 5352 during office hours or send me a message through my contact form.
At the beginning of August 2019, the UK seemed to be on course to leave the European Union without a withdrawal agreement. The government's official policy was to continue to negotiate (or at least to offer to negotiate) right up to 31 Oct 2019 but on terms that the European Commission and the remaining EU member states could never accept (see "Dear Donald" - Johnson's Letter to Tusk and Tusk's Response19 Aug 2019 and Kitty Donaldson and others EU Says U.K. Has Failed to Deliver New Proposals: Brexit Update4 Sept 2019 Bloomburg). The thinking seemed to be that the EU would blink first and make concessions at the end of the day as is said to have happened. If not, the blame for any economic dislocation arising from no deal could be pinned on the obduracy of the EU. The election of a new leader had given the Conservative Party a boost in the polls which was reinforced by proposals for popular domestic measures and the support of four of Britain's biggest-selling newspapers.
Now the outlook is much less sure. A bill requiring the Prime Minister to apply for yet another extension to the notice period provided by art 50 (3) of the Treaty on European Union has already passed through the House of Commons and is unlikely to be stopped in the Lords (see European Union (Withdrawal) (No. 6) Bill (HL Bill 202) Parliament website). The government lost its slender majority in the House of Commons when Dr Philip Lee MP ostentatiously crossed the floor while the Prime Minister was on his feet:
Standard YouTube Licence
It withdrew the whip from several of its leading MPs including senior ministers in Theresa May's administration and suffered resignations from several others including the Prime Minister's own brother as well as the leader of the Conservative Party in Scotland. The Prime Minister's speech to cadets at the West Yorkshire Police training centre was unconfident and incoherent.
Why this reverse in political fortunes? The wheels seemed to fall off the government's juggernaut on 28 Aug 2019 when the government advised the Queen to prorogue Parliament from the middle of September to the middle of October (see the Order in Council of 28 Aug 2019). Parliament is often prorogued at this time of the year for party conferences and the length of this year's prorogation is onlya few days longer than normal but its timing was perceived rightly or wrongly as a coup. The result was demonstrations in support of Parliament from Lerwick in the North to Bodmin in the Southwest.
Those demonstrations were not large but they seem to have been significant. Not only do they appear to have precipitated the Parliamentary defeats mentioned above but appeals to the public to side with the executive in implementing the referendum result appear so far to have landed on deaf ears. The sight of the Leader of the House lolling about on the benches during an important debate did not go down well. Neither did the delivery of a big girl's blouse to the leader of the opposition after he refused to vote for a general election before 31 Oct 2019.
Three of the items on the checklist apply to intellectual property, contracts and data protection and are worth repeating here:
"Trademarks and designs, geographical indications, plant variety rights A unitary trademark and design35, as well as an EU system of geographical indications36 and EU-rules on plant
variety rights37 ensure the protection of these intellectual property rights throughout the EU.
Post-Brexit, the protection granted by these rights no longer applies to the UK territory.
Have I taken the necessary steps to ensure continued protection of my intellectual property rights in the UK?"
"Contracts – jurisdiction clauses
The recognition and enforcement by one Member State of judgements in civil and commercial matters handed
down in another Member State is greatly facilitated by EU law38.
Post-Brexit, the recognition and enforcement of UK judgements will be governed by the (national) rules for third
country judgements.
Have I re-assessed a choice of UK jurisdiction in my commercial contracts"
"Personal data
EU law provides for the transmission of personal data across EU Member States without additional requirements39.
Post-Brexit, the transmission of personal data from the EU to the UK is subject to the rules for data transfers
to third countries. This is relevant for many business sectors, particularly if EU businesses continue to work with
data-centres located in the UK.
Have I taken the necessary steps to ensure compliance with EU rules if I transfer personal data to the UK?"
Anyone wishing to discuss this article or the preparations that need to be made for and after 31 Oct 2019 may call me on 020 7404 5252 during office hours or send me a message through my contact form.
Earlier this evening, the UK prime minister wrote to His Excellency, Donald Tusk the President of the European Council. A copy of his letter can be read here,
In the first paragraph, Johnson notes that the date of brexit is fast approaching and that he hopes that the UK will leave with a deal. He affirms the government's commitment to the peace process, the common travel area and to maintaining good relations with the Republic of Ireland but the backstop has to go. He gives three reasons one of which is new:
"Third, it has become increasingly clear that the backstop risks weakening the delicate balance embodied in the Belfast (Good Friday) Agreement,"
His argument appears to be that the Belfast Agreement is based on a balance between the rights and interests of both communities in Northern Ireland and that balance would be upset if control of large areas of the province's social and commercial life were removed. Johnson argues that the objectives of the Agreement can best be served if the UK and EU look for solutions other than the backstop. He offers to put those solutions in place as far as possible before the end of 2020 and to look constructively at any other commitments that may be required to establish confidence if a permanent solution has not been found by that date.
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Tusk's Response
The backstop is an insurance to avoid a hard border on the island of Ireland unless and until an alternative is found. Those against the backstop and not proposing realistic alternatives in fact support reestablishing a border. Even if they do not admit it.
As the purpose of this website is to advise rather than to exhort, I will leave it to others to decide whether a Conservative leadership election is the best use of the time that the remaining 27 member states of the European Union allowed this country under art 50 (3) of the Treaty of European Union. Having said that, the leadership contest cannot be ignored because both candidates seek to renegotiate the draft withdrawal agreement before that extension runs out. Their respective plans for Bexit have been analysed succinctly by the YouTube channel TLDR (see Boris Johnson's Brexit Plan - Brexit Explainedand Jeremy Hunt's Brexit Plan - Brexit Explained).
Even though both candidates stress that they hope to conclude a withdrawal agreement with the EU, preparations for the UK's departure without such as agreement are continuing in both the UK and the remaining member states. On the whole, the EU appears to be more relaxed than the UK about the prospect probably because it believes that the UK will be hurt by a no-deal departure much more than the remaining member states (see my article EU Preparations for a "No-Deal" Brexit 2 July 2019). According to the Bank of England's Financial Stability Report and Record for July 2019, British financial institutions could probably survive the economic disruption and market volatility that is likely to result from a disorderly brexit. Indications of the preparedness of the rest of British industry are a lot less encouraging (see George Parker UK not ready for a no-deal Brexit, confidential cabinet note warns12 June 2019 Financial Times).
One of the principal economic arguments for brexit has been that the UK could greatly increase its trade with the rest of the world if it were not obliged to impose the common external tariff (see Martin Howe QC Leaving the EU on WTO terms will pull down the barriers to world trade and cut prices for consumers20 Aug 2019 Brexit Central). Since the UK government served notice of its intention to leave the EU the Department for International Trade has concluded the following trade agreements:
Note that those agreements make provision for intellectual property and geographical indications the latter of which I discussed in Geographical Indications after Brexiton 22 June 2019. The UK has also signed mutual recognition agreements with the United States,Australia and New Zealand.
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withdrawal of the UK from the EU without an agreement.
The government chose the third of those options. It applied to the European Council for an extension of the notification period. The Council granted its application by a decision dated 22 March 2019.
The decision is a very short document. It consists of 2 articles and 12 paragraphs of recitals. The effective provision is art 1 which is divided into 2 paragraphs. The first paragraph of art 1 extends the notification period to 22 May 2019 provided that the House of Commons approves the draft withdrawal agreement by 29 March 2019. If the Commons does not do so, the second paragraph extends the notification period until 12 April 2019 in which case "the United Kingdom will indicate a way forward before 12 April 2019, for consideration by the European Council."
The reason for the time limits is explained in para (10) of the recitals:
"This extension will have the consequence that the United Kingdom will remain a
Member State with all the rights and obligations set out in the Treaties and under Union
law. If the United Kingdom is still a Member State on 23-26 May 2019, it will be under the
obligation to hold the elections to the European Parliament in accordance with Union law.
It is to be noted that the United Kingdom would have to give notice of the poll by
12 April 2019 in order to hold such elections."
If the Commons fails to ratify the withdrawal agreement by 29 March 2018, the choices for the government are to leave the EU without a deal on 12 April 2019, seek a longer extension to the notification period which would require this country to participate in the European Parliament elections or revoke its notification of 29 March 2017.
A head of steam is building up for revocation of that notification as evidenced by the massive numbers who took place in the march on Saturday and the even larger numbers of signatories to the Revoke Article 50 and remain in the EU. The government's response has been shrill. In an email to all signatories it wrote:
"This Government will not revoke Article 50. We will honour the result of the 2016 referendum and work with Parliament to deliver a deal that ensures we leave the European Union.
It remains the Government’s firm policy not to revoke Article 50. We will honour the outcome of the 2016 referendum and work to deliver an exit which benefits everyone, whether they voted to Leave or to Remain.
Revoking Article 50, and thereby remaining in the European Union, would undermine both our democracy and the trust that millions of voters have placed in Government.
The Government acknowledges the considerable number of people who have signed this petition. However, close to three quarters of the electorate took part in the 2016 referendum, trusting that the result would be respected. This Government wrote to every household prior to the referendum, promising that the outcome of the referendum would be implemented. 17.4 million people then voted to leave the European Union, providing the biggest democratic mandate for any course of action ever directed at UK Government.
British people cast their votes once again in the 2017 General Election where over 80% of those who voted, voted for parties, including the Opposition, who committed in their manifestos to upholding the result of the referendum.
This Government stands by this commitment.
Revoking Article 50 would break the promises made by Government to the British people, disrespect the clear instruction from a democratic vote, and in turn, reduce confidence in our democracy. As the Prime Minister has said, failing to deliver Brexit would cause “potentially irreparable damage to public trust”, and it is imperative that people can trust their Government to respect their votes and deliver the best outcome for them.
Department for Exiting the European Union."
Be that as it may, the march and petition appear to have spooked at least some MPs into reconsidering their opposition to the draft withdrawal agreement.
Anyone wishing to discuss this article or brexit, in general, should call me on 020 7404 5252 during office hours or send me a message through my contact form.
