Brexit - What Are The Implications For Intellectual Property?

'Brexit' poses considerable challenges for intellectual property law and presents uncertainty as to the involvement of the UK, following its exit from the EU, in existing and proposed international regimes involving EU law.

1. INTRODUCTION

   'Brexit' poses considerable challenges for intellectual property law and presents uncertainty as to the involvement of the UK, following its exit from the EU, in existing and proposed international regimes involving EU law.

   The United Kingdom's Government has indicated intent to repeal the European Communities Act of 1972, which incorporates European Union law into the law of the UK, but nevertheless to preserve the existing body of EU law - the acquis - in the national law of the UK.

   In many areas of the law, the preservation of the acquis will prevent a substantive change to the applicable law from occurring upon the UK's exit from the EU. The UK's involvement in pan-EU regimes - for example in respect of customs, jurisdiction and enforcement of judgments, and unitary intellectual property rights - cannot be preserved unilaterally by the UK. It may be possible for the UK to remain within such systems upon Brexit, or for a transition term following its exit, but only if appropriate agreement is reached with the EU. However, to the extent this does not happen, national legislation would be expected to safeguard, in practical terms, many of the key rights presently enjoyed by EU-wide intellectual property rightholders in the UK pursuant to EU legislation.

   This article therefore seeks to indicate, for intellectual property law, the areas in which reaching agreement should be a priority for both the EU and the UK, as well as areas in which both parties would benefit from a collaborative and constructive approach to the negotiations.

   In addition, and in the meantime, with a view to ensuring as smooth a transition as possible upon exit from the EU, this article seeks to identify which areas of intellectual property law need legislative enactment, both to preserve the acquis and, where this is not possible, to provide replacement legislation creating equivalent national regimes (and, as appropriate, providing for the transitioning of existing rights into such regimes).

2. BREXIT MEANS BREXIT

   On 29 March 2017, the UK delivered to the European Council notice, in accordance with Article 50(2) of the Treaty on European Union (TEU), of its intention to withdraw from the European Union.

   Article 50 states as follows:

   Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements. 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. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it. A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union. If a State which has withdrawn from the Union asks to re-join, its request shall be subject to the procedure referred to in Article 49. There is uncertainty as to whether a notice under Article 50 may be withdrawn. Some commentators, including Lord Kerr, who is credited with having drafted the text of Article 50, have opined that the UK could unilaterally revoke its notice. Other commentators, not least the European Parliamentary Research Service1, have opined that this is at least doubtful from a legal point of view. In any event, it is the Court of Justice of the European Union (CJEU) that would have the final stay in the event of a dispute as the legality of any attempt by the UK to revoke its Article 50 notice.

   What is clear is that the event triggering the withdrawal of the UK from the EU is the UK's 29 March 2017 notice, unless an agreement to the contrary is reached between the withdrawing state and the EU. If no agreement is reached, Brexit will occur on 29 March 2019 without arrangements being in place for the UK's orderly withdrawal or the ongoing relationship between the UK and the EU.

   Comment at this time as to the shape of any agreement that may be reached in the course of Article 50 negotiations would be highly speculative.

3. THE STATUS OF EU LAW IN THE UK

   It is perhaps worth noting that EU law is incorporated into the law of the UK by statute.

   The framework statute is the European Communities Act 1972, which was enacted in the course of the UK's ratification of the 1972 Accession Treaty, according to which the UK became a member of the (then named) European Economic Community.

   The European Communities Act 1972 (as amended) establishes EU law into the law of the UK by the following general provisions:

   Section 1, which defines the treaties which govern UK membership of the EU (the "EU Treaties"); Section 2, which provides that EU law in EU Treaties and EU legislation passes into law in the UK either directly through the medium of section 2(1) or pursuant to the implementing mechanism of section 2(2); and Section 3, which provides that any question as to the meaning or effect of the EU Treaties or any EU legislation shall be treated as a question of law (and, if not referred to the CJEU) for determination as such in accordance with the principles laid down by and any relevant decision of the CJEU; and that judicial notice shall be taken of the EU Treaties and of any decision of, or expression of opinion by, the CJEU on any such question. Independent of statute, EU law has no status in UK law2 . Accordingly, repeal of the European Communities Act 1972, as proposed by the UK Government in its 2 February 2017 White Paper ("The United Kingdom's Exit from, and new partnership with, the European Union"), by the passing of a "Great Repeal Bill" - subsequently laid before Parliament as the "European Union (Withdrawal) Bill 2017-19", would remove from the body of UK law all EU treaties, all directly effective EU legislation, and the requirement that the national courts interpret any legislation (including provisions of national law derived from EU Directives) in accordance with the jurisprudence of the CJEU.

   National legislation passed in order to implement EU legislation pursuant to the implementing mechanism of section 2(2) of the European Communities Act (in practice, national legislation implementing EU Directives) would remain in force in the UK, unless specifically repealed.

   In order to prevent gaps arising in the UK's legislative framework by a blanket repeal of directly effective legislation, replacement legislation would be needed and/or legislative provision would be necessary to convert the acquis into domestic law. The Government has stated its intent to convert the acquis in this way3.

   However, to the extent that the acquis establishes reciprocity of rights and obligations as between the law in the UK and the law in other EU Member States, it will not be possible for the UK unilaterally to preserve this. Arrangements would need to be negotiated with the EU enabling the UK to remain within the relevant system, and in all likelihood maintaining the role of the CJEU's jurisprudence, and potentially the jurisdiction of the CJEU also, in respect of the UK's involvement in each relevant system.

   This is the position, for example, with respect to the provision in EU treaties for free movement of goods and services, the EU Customs regime, the 'Recast Brussels' Regulation (no. 1215/2012 as amended) and the unitary EU regimes for registered trade marks, Community designs, Community plant variety rights, geographical indications, and protected designations of origin. Without such arrangements, each relevant regime would cease to cover the UK; in such a scenario it is for the UK to legislate to minimise the disruption caused by the UK's exit from the EU.

   A stated intention of the UK Government is to bring to an end the jurisdiction in the UK of the CJEU4. However the EU (Withdrawal) Bill envisages UK courts continuing to respect the supremacy of the CJEU's interpretation in respect of legislation derived from EU law existing at the date of Brexit . Aside from this, the case law of the CJEU is likely to remain persuasive.

   Interesting questions also arise in respect of legislative provisions and common law principles predating EU harmonisation, where the CJEU's jurisprudence has subsequently altered the interpretation of the UK legislation or the approach of the common law. Where appellate court guidance binds lower courts to the harmonised approach, it may take some time for the correct post-Brexit approach to be settled.

4. THE LEGISLATIVE CONTEXT OF INTELLECTUAL PROPERTY LAW

   Intellectual property is not an isolated subset of UK law; it forms an important part of the complex mesh of interrelating legislative and common law regimes which together provide the legal structure enabling business and commerce to thrive in the UK.

   The regimes considered in this section are established by EU treaties and directly effective legislation. They provide for unitary...