Future Relationship Agreements with the EFTA States

Jane Lambert

On 20 Dec 2018, the Department for Exiting the European Union announced that the government had reached agreement with the governments of the EFTA member states on the UK's relationship with those states after 29 March 2019.  As Switzerland is a full member of EFTA but not of the European Economic Area (EEA") separate agreements have been made with the EFTA states that are party to the  EEA Agreement - namely Iceland, Liechtenstein and Norway - and also with Switzerland.

EFTA
The European Free Trade Association was established on 3 May 1960 by countries that were unable or unwilling to join the European Economic Community ("EEC"). Its founding members were Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdon. Iceland joined them in 1970. Denmark and the United Kingdom left EFTA to join the EEC in 1973. They were followed by Portugal in 1986 and Austria, and Sweden in 1995. Iceland and Liechtenstein joined EFTA after the UK left. The current members are Iceland, Liechtenstein, Norway and Switzerland. They have a combined land area of 204,500 square miles which is slightly smaller than France and a population of just over 14 million which is about the same as the Istanbul metropolitan area.

The EEA
The EEA consists of the states that are party to the Agreement on the European Economic Area. They include all the states of the European Union plus Iceland, Liechtenstein and Norway.  It enables the contracting states to participate in the EU's single market and in some but no all other programs. Switzerland has not yet ratified that Agreement but it has a number of bilateral agreements with the EU that enable it to participate in the single market.

The Brexit Referendum
The EEA Agreement guaranteed free movement of people with the result that there are many British citizens in each of the EFTA states and citizens from each and every one of the EFTA states in the UK. The current British government interprets the results of the Brtish referendum on membership of the EU as a rejection of the right of free movement. It believes that the UK must leave the EEA as well as the EU. Agreement is therefore required as to what should happen to all those expatriates as well as rights that have been acquired under the EU legislation that extends to the EGTA member states after 29 March 2919.

The Agreement with Iceland, Liechtenstein and Norway
Those matters are addressed in the Agreement on arrangements between Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the United Kingdom of Great Britain and Northern Ireland following the withdrawal of the United Kingdom from the European Union, the EEA agreement and other agreements applicable between the UnitedKingdom and the EEA EFTA States by virtue of the UnitedKingdom’s membership of the European Union. The agreement is very much shorter than the draft withdrawal agreement from the EU. It is 69 pages long in contrast to the 585 of the withdrawal agreement and consists of 71 articles divided into 4 parts with 2 annexes.

Part 1 (arts 1 to 7) contains the objective of the agreement, definitions and similar provisions. Part 2 (arts 8 to 37) deals with citizens' rights.  Part 3 (arts 38 to 63) covers the treatment of goods on the single market during the implementation period in the withdrawal agreement which runs between the 29 March 2019 and 31 Dec 2020. Also covered are intellectual property, judicial cooperation in criminal and civil matters, data protection and public [rocurement. The last part (arts 64 to 69) sets up a joint committee which will deal with the interpretation and implementation of the treaty and dispute resolution.  The Department for Exiting the EU has published an explainer for that agreement.

The Agreement with Switzerland
The agreement with Switzerland is even shorter and deals with citizens' rights. There is also an explainer to that agreement.

Further Information
Both agreements will have to be ratified by the national legislatures of the contracting parties.  The European Union (Withdrawal Agreement) Bill proposed in the white paper Legislating for the withdrawal Agreement between the United Kingdom and the European Union (Cm 9674) is intended to be the instrument that ratifies the agreement in the UK.

Anyone wishing to discuss this article or Brexit generally should call me on 020 7404 5252 during office hours or send me a message through my contact form.

No Deal Preparations on Each Side of the Channel

Jane Lambert

Yesterday I was snowed under with a blizzard of emails from our own government setting out its preparations for "no deal".  Though they arrived the day after the cabinet had announced an intensification of preparations for a departure without a withdrawal agreement it was obvious that they had been planned if not written a good deal earlier.

Although I ploughed through all those emails I selected three that are likely to be of interest to my readers:

• Producing food products protected by a ‘geographical indication’ if there’s no Brexit deal;
• Existing free trade agreements if there’s no Brexit deal; and 
• Trade remedies if there's no Brexit deal.

The first of those emails updates guidance which was first published on 24 Sept 2018 which I mentioned in Geographical Indications over Brexit 6 Oct 2918 NIPC Branding.  The email gives more details of the new British scheme for protecting geographical indications which will be published shortly including the new logo and the protection that UK producers can expect in the remaining states and EU producers in the UK after 29 March 2019.  I shall offer seminars on the new British system at our chambers in London and Birmingham during the New Year,

The second states that HM government will try to negotiate bilateral agreements with third countries that replicate those countries' arrangements with the EU as soon as possible after Brexit.  Until these are agreed the United Kingdom will rely on "most favoured nation" terms.

Finally, a new quango is to be set up by the name of the Trade Remedies Authority which will investigate complaints of dumping and unfair practices. The guidance does not say what will be done if the quango finds an unfair trading practice but Annex 2 to the WTO Agreement provides for consultations. references to dispute settlement panels and corrective measures.

I also received a succinct Communication from the Commission to the European institutions preparing for the withdrawal of the UK from the EU on 30 March 2019 and implementing the Commission’s Contingency Action Plan.  The Communication discusses the Action Plan and sets out the following principles for contingency measures:

• "Contingency measures should not replicate the benefits of membership of the Union, nor the terms of any transition period, as provided for in the draft Withdrawal Agreement; 
• They should be temporary in nature. For the measures adopted today, the Commission has, where relevant, proposed time limitations which are a function of the specific situation in the sector concerned;
• They should be adopted unilaterally by the European Union in pursuit of its interests and should be revocable at any time; 
• They should respect the division of competencies provided for by the Treaties; 
• National contingency measures should be compatible with EU law; 
• They should not remedy delays that could have been avoided by preparedness measures and timely action by the relevant stakeholders."

The Communications addresses citizens; rights, financial services, air traffic, road haulage, customs and climate change policy.

Anyone wishing to discuss this article or Brexit generally should call me on 020 7404 5252 or send me a message through my contact page. 

Sometimes it is a Good Thing to ignore Referendums

Jane Lambert

The Prime Minister's response to growing calls in her party and the nation for a "Peoples' Vote" or second referendum is that it would somehow "break faith with the British people" (see Brexit: May to urge MPs not to 'break faith' by demanding people's vote 17 Dec 2018 The Guardian).  In my article The Western Australian Secession Referendum - A Precedent for Dealing with Troublesome Referendums? (17 Dec 2018 NIPC Brexit) I wrote that a select committee of 3 peers and 3 MPs recommended that Parliament should not even consider the result of a referendum in which almost all eligible voters had participated and where the majority was 66% as opposed to a rather paltry a 51.9% plurality.

The issue that was the subject of the referendum was whether the state of Western Australia (with a land area of just over 1 million square miles or just over a third of the territory of Australia) should secede from the federation and become a separate nation.  The reason why that question came before the British Parliament is that the Australian constitution was a British statute that made no provision for secession.  The only way that the result of the referendum could be implemented was by an Act of the United Kingdom Parliament.  Parliament set up the select committee to consider arguments from both the state and federal governments.  The history of those events is discussed by Mr Tom Musgrave of the University of Wollongong in an excellent article entitled The Western Australian  Secessionist Movement which was published at page 95 of the Macquarie Law Journal (2003) Vol 3. Copies of Mr Musgrave's article may be downloaded from the Macquarie Law Journal website.

The parallels between the Western Australian secession referendum and the UK's Brexit referendum are striking.  Identity and sovereignty were important issues in both referendums.  Western Australia had enjoyed considerable autonomy under the Colonial Laws Validity Act 1865  (c. 63 28_and_29_Vict) and many of its inhabitants were reluctant to give up that autonomy to join states many hundreds of miles to the east in a continent-wide federation. Similarly, a large section of the British public had always been opposed to an ever closer union.  For a while, participation in the Australian federation brought many economic benefits just as British membership of the European Union did in the United Kingdom.  Those benefits came to an end for many in Western Australia with the Great Depression just as they did for many in the UK with the 2008 recession. A single-issue political movement known as the Dominion League campaigned for a secession referendum just as UKIP did in the UK.  In Western Australia as in the UK, much of the press was vociferous in its support for those referendums and the outcomes of those who campaigned for them.

In my earlier article, I noted that the arguments for and against independence were almost exactly the same as in the Brexit debate.  Essentially whether the will of the overwhelming majority of the Western Australian electorate trumped parliamentary sovereignty as expounded by Burke and Dicey.  In 1935 the doctrines of Burke and Dicey won and it was probably just as well that they did because Austraila found itself at war with Japan in 1941.  Enemy forces bombarded Darwin in February 1942 and were on the point of launching an invasion.  Happily, Australian forces supported by their American and other allies gallantly resisted that challenge but that may not have happened had Australia fragmented into separate nations.  The population of Western Australia was under a million in the early 1940s. There might well have been antagonism between the successor states which would have obstructed a military alliance.  Had Australia or just Western Australia fallen to the enemy the course of the Second World War might have been very different.

Returning to the present, neither Mrs May nor anyone else has explained persuasively why Parliament should not exercise its independent judgment on whether Brexit is or is not a good thing rather than give effect to the will of a narrow plurality.  Losing faith in democracy is one argument and even civil disorder along the lines of the vestes jaunes protest in France has been forecast.  Exactly the same was said in 1935 but nothing like that happened in the end.  Economic conditions improved and calls for independence abated.

There is no reason to suppose the same would not happen if Parliament called a second referendum or simply repeated the European Referendum Act 2015.  As this is a legal blog and not a political one I do not argue that Parliament should do either of those things.  At the same time, nothing has happened since 1935 that leads me to doubt that, if Parliament wished to do so, it could.

Anyone wishing to discuss this or my previous article is welcome to call me on 020 7404 5252 or send me a message through my contact page.

The Western Australian Secession Referendum - A Precedent for Dealing with Troublesome Referendums?

A Crocodile in Lake Argyle, Western Australia

Author: Guyskillen
Licence: Creative Commons Attribution-Share Alike 4.0 International
Source: Wikipedia, Western Australia

Jane Lambert

On 30 Dec 1932 the Parliament of Western Australia passed the Secession Referendum Act 1932 (23 Geo V No XLVII).  S.5 (1) of the Act required the Governor of Western Australia to issue a writ for a vote by ballot on the following question:

"Are you in favour of the State of Western Australia withdrawing from the Federal Commonwealth established under the Commonwealth of Australia Constitution Act (Imperial)?"

The Governor carried out his duty and a referendum was held on 8 April 1933.

Voting in that referendum was compulsory.  S.5 (2) declared:

"It shall be the duty of every elector to record his vote at the taking of the said ballot."

Failure to do so was an offence under s.5 (3) and anybody convicted of such offence was liable to a £2 fine under s.5 (4).  Consequently, 91% of the electorate turned out to vote.  Of the 209,359 who voted, 138,653 favoured secession and 70,706 voted against.  Following this plebiscite, the state legislature passed The Secession Act 1934 (25 Geo V No 1) which appointed a delegation to present the case for secession to the United Kingdom Parliament.

The reason why the delegation needed to petition the British Parliament is that the Australian constitution was a British statue that provided for an indissoluble union of the Australian states.  The Parliament of the United Kingdom was the only legislature that could amend the Australian constitution and thus grant independence to a state that wished to secede from the Australian federation.

Upon receiving the petition, Parliament appointed a select committee to consider it.  The committee consisted of 3 peers (including Lord Wright the law lord) and 3 MPs.  They met on 27 March 1935 to hear argument from the state delegation and the Australian federal government.  The state relied on the overwhelming majority in favour of secession arguing that Parliament had a duty to accede to the voters' demand.  The federal government relied on s.4 of the Statute of Westminster 1931 which provided:

"No Act of Parliament of the United Kingdom passed after the commencement of this Act shall extend, or be deemed to extend, to a Dominion as part of the law of that Dominion, unless it is expressly declared in that Act that that Dominion has requested, and consented to, the enactment thereof."

Both sides relied on the doctrine of Parliamentary sovereignty as expounded by Dicey whereby Parliament reserves "the right to make or unmake any law whatever; and further, that no person or body is recognised by the law of England as having a right to override or set aside the legislature of Parliament."  The secessionists argued that it enabled Parliament to override the Statute of Westminister and the federalists that it transcended any mandate founded on the results of a plebiscite.

In a brief report, the select committee rejected the secessionist case.  It concluded that although Parliament retained the right in law to legislate on any matter in any part of the King's dominions it was bound by convention not to interfere in the affairs of a country that had achieved independence without the consent of the legislature of that country.  As the consent of the Australian federal legislature was not forthcoming, the United Kingdom Parliament could not give effect to the results of the plebiscite.

As might be expected, the decision of the select committee was met with great disappointment in Western Australia.   As in the debate over the desirability of a second referendum on Brexit, there were complaints of an affront to democracy and threats of civil unrest but nothing came of them.  The Labor Party that had campaigned against secession was returned to office. The social and economic conditions that had fuelled calls for recession improved.

In the debate over whether Parliament should respect the results of the 1933 referendum, exactly the same arguments were made then as are being made now.   The idea that Parliament somehow has a duty to effect the will of the people as expressed in a referendum was rejected in terms and rightly so,  A referendum is, after all, nothing more than a creature of statute.  As no parliament may bind its successor it should be possible for Parliament to repeal a statute that provides for a referendum as easily as it can repeal any other legislation.  I can think of nothing that has happened since 1935 to have ousted or limited the doctrine of parliamentary sovereignty.

Anyone wishing to discuss this article should call 020 7404 5252 during office hours or send me a message through my contact form.

Wightman and Others v Secretary of State for Exiting the European Union

Court of Justice of the European Union

Author Cédric Puisney 

Licence Creative Commons Attribution 2.0 Generic

Case C‑621/18,  Wightman and Others v Secretary of State for Exiting the European Union  [2018] EUECJ C-621/18, ECLI:EU:C:2018:999, EU:C:2018:999

Jane Lambert

On 19 Dec 2017. Andy Wightmqn MSP and a number of other Scottish, Westminster and European parliamentarians applied to the  Outer House of the Court of Session for permission to seek a judicial review of the Advocate General for Scotland's refusal to confirm that the Prime Minister's notice of intention to withdraw from the European Union dated 29 March 2017 could be withdrawn unilaterally. The petition came on before Lord Doherty who refused permission for a full hearing on the ground that the application had no real prospect of success (see Re Wightman and Others' application for Judicial review on the issue of the unilateral revocability of Article 50 of the Treaty on European Union [2018] ScotCS CSOH_8).

The parliamentarians appealed to the Inner House of the Court of Session which allowed the appeal (see Wightman and Others v Advocate General [2018] CSIH 18).  Delivering judgment on behalf of the Court, Lord Carloway, the Lord President, said at paragraph [30]:

"The issue of whether it is legally possible to revoke the notice of withdrawal is, as already stated, one of great importance. On one view, authoritative guidance on whether it is legally possible to do so may have the capacity to influence Members of Parliament in deciding what steps to take in advance of, and at the time of, a debate and vote on the European Union (Withdrawal) Bill. After all, if Parliament is to be regarded as sovereign, the Government’s position on the legality of revoking the notice may not be decisive. Whether such guidance falls within the proper scope of judicial review raises yet another issue. However, that scope is wide and, returning to the cautionary words in EY (supra), the law is always developing and, in certain areas, it can do so quickly and dramatically. The scope of judicial review of Government policy may be one such area, at least where no issue of questioning what is said in Parliament arises."

Their Lordships concluded at [32] that "having regard to all the circumstances, the court is of the view that the Lord Ordinary erred in holding that there is no 'real prospect of success' in this petition, as that phrase has been explained above."

Following their successful appeal, the parliamentarians applied for the following relief:

"a. A preliminary reference to the Court of Justice of the European Union (CJEU) under article 267 of the Treaty on the Functioning of the European Union (TFEU); and for that reference to be sought by way of expedited procedure;
b. On return of that reference from the CJEU, and in the light of the guidance given by that court, for a declarator from this court specifying whether, when and how the notification which was made by letter dated 29 March 2017 from the United Kingdom Prime Minister, the Right Honourable Theresa May MP, to the President of the European Council, Donald Tusk under article 50(2) TEU can unilaterally be revoked by the United Kingdom."

Their application was heard by Lord Boyd of Duncansby in Wightman and others v Secretary of State for Exiting the European Union  [2018] ScotCS CSOH_61. The learned judge dismissed the application on the grounds that the question was hypothetical.

The parliamentarians appealed again to the Inner House which once again allowed their appeal (see Wightman and Others v Secretary of State for Exiting the European Union [2018] ScotCS CSIH_62).  Their Lordships referred the following question to the Court of Justice of the European Union under art 267 of the Treaty on the Functioning of the European Union:

“Where, in accordance with Article 50 of the TEU, a Member State has notified the European Council of its intention to withdraw from the European Union, does EU law permit that notice to be revoked unilaterally by the notifying Member State; and, if so, subject to what conditions and with what effect relative to the Member State remaining within the EU”.

In view of the expected Parliamentary proceedings including a "meaningful vote" on any withdrawal agreement that might be negotiated, the Court of Session invited the CJEU to expedite the proceedings before it pursuant to art 105 of the Rules of Procedure of the Court of Justice.

The Department for Exiting the European Union applied unsuccessfully to the Inner House for permission to appeal against the reference to the Supreme Court.  When its application to the Inner House failed on 8 Nov 2018 the Department applied for permission to appeal to the Supreme Court.  The application was heard by Lady Hale, Lord Reed and Lord Hodge on 20 Nov 2018 and was dismissed with costs (see the Supreme Court's order in Wightman and Others v Secretary of State for Exiting the European Union 20 Nov 2018).

The Court of Justice granted the parliamentarians' request for expedition on 19 Oct 2018 in C‑621/18, Wightman and Others v Secretary for State for Exiting the European Union EU:C:2018:851, ECLI:EU:C:2018:851, [2018] EUECJ C-621/18_CO.  The parliamentarians were opposed not only by Her Majesty's government but also by the Commission and the Council.  HMG argued that the question was inadmissible because it was hypothetical as the government had no intention of revoking its notice. The Commission argued that it was hypothetical for another reason, namely that it would have no binding effect on the parties to the main litigation. On the substantive issue, the Commission and Council argued that the right to revoke notice under art 50 could not be unilateral lest it be used to leverage concessions from the other member states.  In their submission, notice could be withdrawn only with the unanimous consent of the remaining member states.

In his opinion of 4 Dec 2018, Mr Manuel Campos Sánchez-Bordona. Advocate General advised at paragraph [34]:

"According to settled case-law, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation or the validity of a rule of EU law, the Court is in principle bound to give a ruling. It follows that questions concerning EU law enjoy a presumption of relevance."

The CJEU has a right to refuse to hear a case in certain circumstances but, in the Advocate General's view, none of those circumstances applied.  After analysing the Vienna Convention on the Law of Treaties, Art 50 of the Treaty of European Union and British legislation he proposed that the Court of Justice should answer the Inner House's question as follows:

"When a Member State has notified the European Council of its intention to withdraw from the European Union, Article 50 of the Treaty on European Union allows the unilateral revocation of that notification, until such time as the withdrawal agreement is formally concluded, provided that the revocation has been decided upon in accordance with the Member State’s constitutional requirements, is formally notified to the European Council and does not involve an abusive practice."

In its judgment yesterday, the full Court agreed with the Advocate General on admissibility:

"It is not for the Court to call into question the referring court’s assessment of the admissibility of the action in the main proceedings, which falls, in the context of the preliminary ruling proceedings, within the jurisdiction of the national court; nor is it for the Court to determine whether the order for reference was made in accordance with the rules of national law governing the organisation of the courts and legal proceedings (see, to that effect, judgments of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 26, and of 7 February 2018, American Express, C‑304/16, EU:C:2018:66, paragraph 34). In the present case, the referring court rejected the pleas of inadmissibility raised before it by the United Kingdom Government concerning the hypothetical or academic nature of the action in the main proceedings. It follows that, in so far as the arguments of the United Kingdom Government and of the Commission are intended to call into question the admissibility of that action, they are irrelevant for the purposes of determining whether the request for a preliminary ruling is admissible (see, to that effect, judgment of 13 March 2007, Unibet, C‑432/05, EU:C:2007:163, paragraph 33)."

It also followed his reasoning on the substantive law: "as the Advocate General pointed out in points 99 to 102 of his Opinion, it follows from the wording of Article 50(2) TEU that a Member State which decides to withdraw is to notify the European Council of its ‘intention’. An intention is, by its nature, neither definitive nor irrevocable."  In its ruling it actually went firther than the Advocate General:

"Article 50 TEU must be interpreted as meaning that, where a Member State has notified the European Council, in accordance with that article, of its intention to withdraw from the European Union, that article allows that Member State — for as long as a withdrawal agreement concluded between that Member State and the European Union has not entered into force or, if no such agreement has been concluded, for as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that paragraph, has not expired — to revoke that notification unilaterally, in an unequivocal and unconditional manner, by a notice addressed to the European Council in writing, after the Member State concerned has taken the revocation decision in accordance with its constitutional requirements. The purpose of that revocation is to confirm the EU membership of the Member State concerned under terms that are unchanged as regards its status as a Member State, and that revocation brings the withdrawal procedure to an end."

The significant part of that ruling lies in the last sentence that a revocation of notice under art 50 will leave unchanged the United Kingdon's status in the European Union,   In other words, it can remain out of the euro, out of Schengen if it revoked its notice before 29 March 2019.  After that date, art 49 would apply and the terms of our reentry are unlikely to be anything like as generous as the terms of our present membership.

The timing of the judgment has been criticized by some as an interference in our affairs.  It is nothing of the sort.  It delivered an expedited judgment at the specific request of Scotland's highest court which request was upheld by the Supreme Court of the United Kingdom.   Some may see it as inconvenient but it may also provide us with a way out of our constitutional crisis.

Anyone wishing to discuss this article can call me on 020 7404 5252 during office hours or send me a message through my contact form.

Writing the EU out of our Copyright Law: The Draft Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations

Jane Lambert

In Copyright and Related Rights after Brexit 19 Oct 2018, I discussed some of the changes to our copyright law and related rights as a result of our departure from the European Union. The Department for Business, Energy and Industrial Strategy has prepared in draft The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2018 to provide for some of those changes and the Intellectual Property Office an Explanatory Memorandum to the draft Regulations.

The draft Regulations are divided into five Parts:

• Part 1 (Reg 1) provides the name by which the Regulations may be cited and that they will come into effect on "exit day";
• Part 2 (Regs 2 - 25) makes changes to the Copyright Designs and Patents Act 1988 most of which consist of substituting "the United Kingdom" for references to EEA states;
• Part 3 amends subordinate legislation as follows: 
• Reg 26 makes amendments to The Duration of Copyright and Rights in Performances Regulations 1995;
• Reg 27 to The Copyright and Related Rights Regulations 1996;
• Reg 28 to The Copyright and Rights in Databases Regulations 1997;
• Reg 29 to The Artist’s Resale Right Regulations 2006;
• Reg 30 to the Copyright and Rights in Performances (Extended Collective Licensing) Regulations 2014;
• Reg 31 to the Copyright and Rights in Performances (Licensing of Orphan Works) Regulations 2014;
• Reg 32 to The Collective Management of Copyright (EU Directive) Regulations 2016;
• Reg 33 to the Copyright and Performances (Application to Other Countries) Order 2016; and
• Reg 35 to the Copyright and Related Rights (Marrakesh Treaty etc.) (Amendment) Regulations 2018; while
• Reg 34 revokes. The Portability of Online Content Services Regulations 2018.
• Part 4  makes changes to EU regulations that are incorporated into the laws of England and Wales, Scotland and Northern Ireland by s.3 of the European Union (Withdrawal) Act 2018:
• Reg 36 amends Council Regulation (EU) 2017/1563 on the cross-border exchange between the Union and third countries of accessible format copies of certain works and other subject matter protected by copyright and related rights for the benefit of persons who are blind, visually impaired or otherwise print disabled; and
• Reg 37 revokes Council Regulation (EU) 2017/1563 on the cross-border exchange between the Union and third countries of accessible format copies of certain works and other subject matter protected by copyright and related rights for the benefit of persons who are blind, visually impaired or otherwise print disabled; and 
• Part 5 (Reg 38) provides that amendments made by the draft Regulations do not apply to any database in which a database right exists under the Copyright and Rights in Databases Regulations 1997 prior to exit day.

The power under which these draft Regulations would be made is s.8 of the European Union (Withdrawal) Act 2018.

The IPO has stated in paragraph 9 of its Explanatory Memorandum that it will incorporate them into its unofficial consolidation of Parts 1 and II of the Copyright, Designs and Patents Act 1988 as soon as possible after they come into effect.

Anybody wishing to discuss this article or the consequences of Brexit for intellectual property owners may call me on 020 7404 5252 during office hours or send me a message through my contact form.

Brexit Briefing - November 2018

Author O Flammger
Source Wikipedia Palace of Westminster

Jane Lambert

Negotiators from the United Kingdom and the European Union have agreed the text of a withdrawal agreement in accordance with art 50 (2) of the Treaty on European Union and a political declaration setting out the framework for the future relationship between the EU and the UK. That agreement has been approved by the governments of the member states at a special meeting of the European Council on 25 Nov 2018.

The draft withdrawal agreement provides for an implementation or transition period starting on 29 March 2019 and continuing until at least 31 Dec 2020 during which time the British government will try to negotiate a long-term agreement with the European Union on the lines of the political declaration. During that period, EU law will continue to apply to the UK although it will cease to be a member on 29 March 2019 and will have no representation in the Council or in any of the EU institutions after that date.

The draft agreement will avoid disruption of trade but it will leave the UK as a rule-taker rather a rule-maker during the implementation period. More importantly, it may require the UK to remain in regulatory alignment with the EU even after the end of that period until both sides agree otherwise to ensure an open border with the Republic of Ireland.

This draft is being debated by both Houses of Parliament as I write this briefing and it has already prompted several ministerial resignations.  It is opposed by almost all the opposition parties and by many Conservative MPs on both sides of the Brexit debate.  Though nothing is impossible in present circumstances, most commentators think it unlikely that it will be approved by either House.

The Prime Minister has warned that the alternatives to the draft agreement are an exit from the EU without any implementation period which could be very disruptive to business and the general public or maybe no Brexit at all. In that regard, the Court of Justice of the European Union is hearing a case that has been referred to it by the Court of Session under art 267 of the Treaty on the Functioning of the European Union,  The case has been brought by Andy Wightman and others against the Secretary State for Exiting the European Union on whether the British government can unilaterally withdraw its notice of intention to leave the EU. The Advocate-General has opined that it can on certain specified conditions (see Case 621/18 Wightman and others v Secretary of State for Exiting the European Union EU:C:2018:978, ECLI:EU:C:2018:978, [2018] EUECJ C-621/18_O). The full Court is expected to deliver its decision on Monday 10 Dec 2018.

Whether we leave the EU with an agreement or not, it is clear that Community designs and plant varieties and EU trade marks will be converted into British ones, that we shall have a British system of geographical indications very much like the EU system and a supplemental unregistered design right that will be similar to unregistered Community designs,  Of course, none of that will be necessary if we remain in the EU. If we stay in the EU or even exit on the terms of the draft withdrawal agreement there is an outside chance that the Unified Patent Court and unitary patent will come into being and that we will participate in them.  It is highly unlikely that will happen if we leave without agreement.

The British government ratified the United Patent Cout agreement on 26 April 2018 and the Minister with responsibility for Intellectual Property who deposited the instrument of ratification was Sam Gyimh MP. Mr Gyimak is one of the ministers who was felt obliged to resign over the terms of the draft agreement as did his predecessor in the role Mr Jo Johnson MP.  Both were good ministers and it is sad to see them go.

Even though there are just a few weeks to go before the 29 March 2019 the best advice I can offer my clients is prepare for the worse and hope for the best.  Anyone wishing to discuss this article or Brexit generally should call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact page,  I wish all my readers a Merry Christmas and a happy New Year.

The Intellectual Property Provisions of the Draft Withdrawal Agreement

Author Furfur
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

Original uploader Jonto
Licence: Creative Commons Attribution-Share Alike 3.0 unported
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.