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Impact of BREXIT on IPR

July 1, 2021

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This article is written by Aparna Jayakumar, a law student at Guru Gobind Singh Indraprastha University. This article gives out the basics of Britain’s exit from the EU market and its effect on Intellectual Property Rights.

Table of Contents

Introduction

Brexit refers to Britain’s official departure from the EU’s single market and customs union on the 1st day of January after the two parties mutually settled to a post-Brexit settlement on December 24, seven days before the deadline. And for the service industry, the agreement has reached almost every sector—financial and commercial services, international policy, defence and security, telephone roaming, reciprocal recognition of technical skills, access to legal services, internet commerce and public procurement, and even fishing quotas between the UK and the EU.

What is Brexit?

Former lawyer Peter Wilding introduced the term Brexit, which is a combination of the terms “Britain” and “exit.” In May 2012, he wrote about “Brexit.” Brexit is the term assigned to the United Kingdom’s split from the European Union. Britain has had a turbulent history with the EU since its inception and has previously attempted to leave it. The UK has kept a strong distance from the EU. It has its currency, the pound sterling, and has opted out of the Schengen deal, which reduces internal border restrictions within the EU. People in the British political establishment have long been opposed to the concept of the EU, and this resistance has become stronger since the 2008 financial crisis. The influx of migrants from weaker EU member states, as well as the apprehension of refugees from Syria, Africa, and the Middle East, heightened scepticism among voters and politicians.

Brexit and India

Challenges for India

Trade-Related: Since the formation of the EU single market, the United Kingdom has served as a gateway for Indian firms to join the EU. Due to Brexit, Indian firms would have to compete in these two distinct markets.

For example, Brexit would likely raise overhead costs and necessitate the establishment of new headquarters in both the EU and the UK.
Another example: Jaguar, which is owned by TATA, has previously paid no customs duty in the EU market. However, after Brexit, they may face higher logistics costs, customs duty, and other restrictions making these vehicles uncompetitive.

Uncertainty over exchange rates: The depreciation of the British pound and the Euro affects the Indian rupee. As the dollar strengthens, this would harm the Great British Pound/Canadian Dollar. Canadian Dollar (GBP/CAD). Servicing costs for bonds issued by Indian companies will increase. Indian exports to the United Kingdom will suffer as a result of the Pound’s depreciation.
A decline in Foreign direct investment (FDI): With the United Kingdom being one of India’s major sources of foreign direct investment, the Brexit agreement would have a big impact on the nation.

Positive impacts on India

Robust Indian Economy: The third-largest economy is undergoing fast growth. India’s historically close relations with the United Kingdom. Younger English-speaking demographics have a large diaspora in the UK and EU, and the EU is on track to become the world’s largest country by population quite soon.
Agriculture: Since the UK is a net importer of food from the EU, Indian companies can see opportunities in the food and agro sector.
Service sectors: The restrictions on the free movement of professionals between the two markets are expected to benefit India’s services sector.

According to the Brexit trade and security agreement, UK nationals will no longer have unlimited freedom to work, research, start a business, or remain in the EU, although both sides will have tariff-free and quota-free access to each other’s markets.

4. Increased face value: Brexit will hinder economic growth and cause oil prices to fall significantly. This would only increase India’s relative and actual attractiveness.

5. Freedom of movement: Post-Brexit, trade between the EU and the UK will be limited, prompting the UK to search for human capital in other countries such as India.

(For example, consider the recent expansion of a two-year post-study VISA for international students). However, as the EU continues to deal with the migrant problem, the significant easing of visa rules for Indian professional workers is uncertain.

EU International Property (IP) Law

A stable intellectual property (IP) platform is the most effective way to unleash innovation and allow creative businesses to thrive. In periods of crisis, intellectual property is also a critical tool for bolstering EU stability and economic growth. Around the same time, rights to intellectual property can be made easier under equal terms.

The Trade and Cooperation Agreement has a negligible effect on intellectual property rights. It establishes basic IP security standards while allowing for the implementation of more stringent steps. Both the UK and the EU have now adopted the minimum steps. Changes in EU law may no longer be directly adopted into UK law, and changes to UK law can be made that result in deviation from EU law.

The UK has made some changes to intellectual property legislation to ensure as much consistency as possible during the transition phase. Even so, not all continuity processes will be automatic, and IP copyright holders will need to take additional steps.

Trade Marks

A trademark is a symbol that distinguishes one company’s products or services from those of other companies. Intellectual property rights safeguard trademarks. This means that the trademark will either be used only by the owner or granted to another entity in exchange for payment. Owners of existing registered European Union Trademarks (EUTMs) were given a new corresponding UK right after the Transition Period. It was an automatic procedure, but rights holders could opt-out if they didn’t want to be registered in the UK for whatever reason.

The subsequent UK registrations can be renewed in the UK, can be used in UK trials, can be contested for invalidity/non-use in the UK, and can be delegated and approved independently of the EUTM from which it originated.

Designs

Although registered and unregistered designs in the United Kingdom remain unchanged, Registered Community Designs (“RCD”) and Unregistered Community Designs (“UCD”) may not (“UCD”). RCD owners have been given a new equivalent UK right immediately and at no discount. In the remaining 27 EU Member States, the RCD continues to cover the holders.

The UK has made changes to intellectual property legislation to ensure as much consistency as possible during the transition phase. However, not all continuity processes will be automatic, and IP copyright holders will need to take extra steps.

Patents

An invention is protected by a patent, which is an exclusive privilege given to the inventor. In other words, patent rights forbid anyone from commercializing, using, exporting, importing, or selling the invention without the approval of the patent holders.

With respect to the impact of Brexit on patents, there is little that can be said about patent rights. The new National Patent Enforcement Scheme, which is accessed by the UK Intellectual Property Office (UKIPO) or the European Patent Office (which is not an EU institution), remains unchanged.

The Unified Patent Court is a proposed European patent regime that will allow inventors to apply for a new, pan-European Unitary Patent (UP) that would cover much of Europe, as well as a single Unified Patent Court (UPC) to hear and resolve patent disputes on a pan-European basis. The United Kingdom will not be included in the UPC scheme, and a UP will not cover the United Kingdom.

Supplementary Protection Certificates (“SPC’s”)

An SPC is a national right that must be applied for separately in each European territory. Current privileges and pending applications will be unchanged even after the transition phase ends. These rights allow patent protection in Europe to be extended for up to five and a half years in exchange for the time spent gaining marketing consent for medical and plant protection products.

An SPC application will be lodged based on any marketing authorisation that requires the patented product to be sold on the market in any part of the UK from January 1, 2021. For the United Kingdom, the application form, proofs, and deadlines are likely to remain unchanged.

In terms of UK legislation, the SPC security period will now be equal to the time between the patent filing date and the first commercial authorisation for the product to be sold on the market in the European Economic Area (EEA) or the UK, subject to a 5-year limit.

UK legislation has been revised with effect from January 1, 2021, to bring EU law on Supplementary Security Certificates (SPCs) into UK national law and to make various amendments. While the former frameworks and procedures remain essentially unchanged, there are a few key distinctions that consumers should be mindful of.

Before the UK’s exit from the EU, the SPC security period was described as the time between the patent filing date and the first marketing authorisation for the product to be marketed for the first time in the EEA, with a 5-year limit.

The SPC system in the United Kingdom will largely function as earlier, on January 1, 2021. The majority of the amendments to the EU legislation that has been maintained make it more compatible and compliant with UK law. New SPC applications may be submitted at the UKIPO before the same deadline as before.

The payments will remain the same for six months after the first marketing authorisation is granted in the UK or six months after the basic patent is granted.

Plant variety rights

On January 31, 2020, the United Kingdom left the European Union. There is an interim phase in force until December 3, 2020. This has several implications for EU Plant Variety Rights holders and claimants in the EU and the United Kingdom. Changes to trademarks would also affect certain plant breeders and farmers.

Plant variety rights granted by the EU remain in place in the UK until the conclusion of the transition phase.
After the transfer era, holders of EU Plant Variety Rights will obtain a new UK Plant Variety Right.
Following the transition phase, the EU and the UK will have two different Plant Variety Rights schemes.
In the EU, rights holders and applicants in the United Kingdom would require a procedural delegate.
In the EU, rights holders and claimants will need the services of a procedural agent in the United Kingdom.

Copyright

The United Kingdom is a signatory of a variety of international conventions and agreements, like the Berne Convention, that safeguards copyright. The bulk of UK copyright works are still protected around the world, even in the EU, and works originating in the EU (but not from the UK) are still protected in the UK, despite the UK’s withdrawal from the EU.

Where we’ve seen changes is in the application of some cross-border copyright processes, which no longer work the way they used to. For example, the EU Portability Regulation, which required customers to access online content providers while travelling, has expired, and UK citizens travelling to the EU could find that they are unable to do so. While copyright law is not harmonised in and of itself, the laws regulating how copyright-protected works can be used in specific ways are regulated by EU law and have also been incorporated into UK legislation. Future EU legislation will not be implemented in the United Kingdom.

Changes and enforcement

Owners of EU intellectual property rights (such as EU trade names, Registered Community Designs, and/or copyright) could attempt to assert their rights before Brexit by bringing lawsuits in one Member State but obtaining pan-EU relief. For instance, the owner of an EU trademark may file an infringement action in a UK court, demanding an injunction prohibiting the complainant from using the mark.

Following the United Kingdom’s withdrawal from the European Union, UK courts no longer have authority over infringements that exist outside of the United Kingdom, and hence are unable to grant redress in cases involving infringements that occur outside of the United Kingdom. If claimants of EU and UK intellectual property rights demand redress in both the EU and the UK, they must file independent lawsuits in both the UK and an EU Member State.

Conclusion

Brexit, as predicted, was not a simple divorce. Any UK law that was formerly reliant on EU legislation will now have to be unpicked. Separation allows the UK to have rules that differ from those of Europe, and this separation could be welcomed in certain ways. However, considering the interconnected nature of commerce and the widespread acceptance that harmonization is beneficial, this is impossible to occur in IP.

Going forward, the UK will no longer be able to control EU policy, which may weaken the role of UK-based IP and IT companies both within Europe and on the global stage (especially vis-à-vis the United States, as the UK may be seen as a second-class citizen without a voice in Europe) and make it more difficult to compete. With the continuing uncertainty regarding the long-term future, IP owners should determine which of their rights are now likely to be compromised and could need further application/registration to ensure full security for that right.