The latest tranche of “no deal” technical notices was released yesterday afternoon by the UK Government. Amongst them are several notices that highlight the Brexit issues faced by intellectual property right owners and, in some cases, confirm the Government’s approach to resolving them. The Government also released this news story today which comments on the guidance given in the technical notices and comments on the Government’s longer term aims for IP protection.
Key announcements, in the context of no deal, are:
- Provision of a new right to replace unregistered Community design rights, to be known as “the supplementary unregistered design right“.
- Existing EUTMs and Community registered designs will be replaced with new, equivalent rights in the UK at the end of the implementation/transition period, “with minimal administrative burden“.
- The SPC, compulsory licensing, pharmaceutical product testing exception and patenting of biotechnological inventions regimes will remain unchanged at least initially.
- If the UPC comes into force the UK will replace unitary patent rights with equivalent rights if the UK needs to withdraw from the new system, although the UK “will explore whether it is possible to remain within it“. The Government’s news story states that “The UK intends to stay in the Unified Patent Court and unitary patent system after we leave the EU.”
- UK originating sui generis database rights will no longer be enforceable in the EEA; “UK owners may want to consider relying on other forms of protection (e.g. restrictive licensing agreements or copyright where applicable) for their databases“
- The UK will set up its own GI scheme “which will be WTO TRIPS compliant“. The new rights “will broadly mirror the EU regime and be no more burdensome to producers“. Since the UK would no longer be required to recognise EU GI status, EU producers would be able to apply for UK GI status. Those wishing to protect UK GIs in the EU will need to submit applications on a third country basis.
- The UK will continue to accept the exhaustion of IP rights in products put on the market in the EEA by, or with the consent of, the rights holder. However, the EU will likely not consider that goods placed on the UK market are exhausted in the EEA, and thus permission may need to be sought from the rights holder to transfer goods to the EEA that have legitimately been put on the market in the UK. The Government news story says that “The UK looks forward to exploring arrangements on IP cooperation that will provide mutual benefits to UK and EU rights holders and we are ready to discuss issues the EU wishes to raise in the negotiations on our future relationship, including exhaustion of IP rights”.
Links to the notices:
- Trade marks and designs
- Geographical Indications
- Exhaustion of IP rights
More detail on each of these is provided below. For those with an interest in Life Sciences please also see our blog post on the notices related to that sector that were released last month.
In a blow for rights-holders, the UK Supreme Court (UKSC) has today decided that ISPs should not bear the implementation costs for website blocking orders in Cartier International AG and others v British Telecommunications Plc and another  UKSC 28. Whilst the UKSC has endorsed the availability of blocking orders for rights-holders, it has reversed the costs position, finding that rights-holders should indemnify the ISPs for the reasonable costs of implementing the orders.
This is a very important case in relation to the ability of brand owners and others to obtain blocking injunctions against intermediaries, such as ISPs to prevent third party website operators offering infringing or counterfeit branded products. The UKSC decided the pivotal question of who should bear the cost of implementing blocking orders, in terms of deploying monitoring, filtering and web blocking technology – the ISP or the brand owner?
In our latest publication in our Future of Consumer series on issues facing the Consumer sector, we look at some of the online risks threatening businesses today.
We examine the options available to tackle IP infringements online, such as the sale of counterfeit goods, with a focus on the most powerful weapon for rights holders – blocking junctions from the courts. We also provide some practical tips to help tackle and combat online infringements.
In the latest draft of the Withdrawal Agreement (19 March 2018) the UK Government and European Commission negotiators appear to have agreed text providing for the replacement of EU-wide IP rights having effect in the UK with equivalent UK rights at the end of the transition period post-Brexit (until 31 December 2020). Further, during the transition period, EU-wide rights will still apply to the UK due to the effect of Article 122 which provides that EU law will be applicable to the UK during the transition period and that it will produce the same legal effects in respect of and in the UK as those which is produces within the EU and its Member States and shall be interpreted and applied in accordance with the same methods and general principles, and that during the transition period, any reference to Member States in EU law shall be understood as including the UK.
Other IP related measures include provision for dealing with: exhaustion of rights, pending applications, international registrations designating the EU and the effect of invalidity proceedings that are “on foot” at the end of the transition period, (see Articles 50-57). Certain provisions (highlighted in green) are now listed as agreed between negotiators, whilst others are still just proposals from the Commission (those un-highlighted) including those on GIs, SPCs and who pays the administration costs involved.
There are still unresolved issues for those who hold IP rights in the EU and those who license (in or out) EU-wide IP rights or have agreements linked to the “EU” as territory, which we discuss below.
Despite the areas of current agreement, there remains the possibility of a “no deal” scenario in relation to the whole agreement, in which case none of the areas agreed would stand (although the UK Government could make separate arrangements to create equivalent rights at the moment of Brexit). Anything agreed between the Commission and the UK under the Withdrawal Agreement needs European Council approval and then European Parliament approval. Thus, although a good start has been made on agreeing the post-Brexit fate of EU-wide IP rights currently having effect in the UK, the final arrangements are still far from certain. Indeed, if the Withdrawal Agreement is not accepted then there will be no transition period at all and a “hard” Brexit will come into effect on 30 March 2019, with all that implies for IP rights (see our comments from January 2017 here).
In summary, the proposals in the revised Withdrawal Agreement, and problems associated with them, are:
Drawing on our practitioners’ experience and understanding of the intellectual property and technology issues facing our clients in the fast changing world in which we all now do business, we made innovation and disruptive technology the key themes at our 2018 IP Update Conference.
Described by one attendee as “The perfect mixture of commercial and legal content”, the event was held in our London offices in February 2018. We were joined by over 140 clients from the Technology, Banking, Consumer, Energy, Manufacturing, Media, Pharmaceutical & Healthcare, and Telecommunications sectors.
Click here for a briefing summarising the legal and commercial issues raised by the Herbert Smith Freehills presenters and our keynote speaker Kevin Mathers, Country Director at Google UK.
Our keynote speaker, Kevin Mathers, set the scene by discussing the current technological landscape for innovation and how Google looks at the future. Taking examples of how artificial intelligence, augmented reality and virtual reality are already being used by Google and looking at the major trends which will dictate our digital future. Kevin’s presentation was a great success, with attendees describing it as “really insightful and inspirational”; “engaging and interesting” and “stimulating and thought-provoking”.
The conference continued with sessions on
- tackling the impact of AI on your business,
- on-line risk,
- open innovation,
- interoperability and product standards, and
- targeted advertising and the GDPR.
There was also a panel session at the end of the conference to discuss the issues facing businesses in relation to disruptive technology with contributions from partners and of counsel across the IP and IT practice areas and from several of our European offices.
Clients were impressed by the range of issues presented by the speakers and the practical approaches offered.
A number of EU trade mark reforms came into force on 1 October 2017. The key changes are:
- The graphical representation requirement has been abolished. In theory, it should now be easier to file non-traditional forms of marks at EU level. Sound marks may be represented by digital sound files. Motion, multimedia and hologram marks may also be accepted. The graphic representation requirement has been replaced with a requirement that signs be represented in any appropriate form of generally available technology, as long as the representation is clear, precise, self-contained, easily accessible, intelligible, durable and objective. The change in the law will also apply for all national marks filed in EU Member States once this provision is implemented into national laws. Brand owners should consider whether new filings for EUTMs should be made. In some industry sectors, the potential to more easily register sound, motion, multimedia and hologram marks could offer significant opportunity to add further layers of protection to brand portfolios on an EU level.
- EU Certification Marks have been introduced which are a new type of trade mark at EU level which will guarantee specific characteristics of certain goods/services. The introduction of this form of marks aims to harmonise the position across the EU as some Member States did not allow for certification systems under their national systems. EU certification marks will be owned by the appropriate organisation or certifying institution responsible for certifying and monitoring the qualities or characteristics of the products. These marks may not be owned by suppliers of the goods and services in question. An applicant for an EU certification mark must submit regulations governing its use to the EUIPO within two months of the filing of the application.
- A number of procedural changes have also been introduced, the full details of which are contained in the updated EUIPO guidelines. These include a change on acquired distinctiveness as applicants may now pursue a subsidiary claim of acquired distinctiveness after they have exhausted the right of appeal on the inherent registrability of a trade mark. Translation requirements have also been simplified and assignment of an EU trade mark can be sought as an alternative remedy to invalidation. Priority claims must be filed at the same time as filing of an application and not afterwards. Applicants may rely on online sources recognised by the EUIPO for substantiation of earlier rights in oppositions and cancellation actions.
These recent changes form part of a package of EU trade mark reforms, many of which came into force on 23 March 2016. For further detail on all changes under the EU trade mark reform package, please see our previous e-bulletin here.
Threatening proceedings for intellectual property right infringement can sometimes backfire. In relation to patents, trade marks and designs, there is a right for any person aggrieved by the threat to bring an action against the threatener. The “aggrieved” person may not necessarily be the person directly threatened with proceedings, it could be anyone whose commercial interests are damaged by the threat – such as a manufacturer whose suppliers or distributors are threatened. Not only does the threats action expose the IP rights-holder to the risk of damages, it also turns the potential claimant into a defendant. This in turn creates a tension with the requirements of the Civil Procedure Rules to communicate a litigant’s case early before issuing proceedings, with rights holders more likely to sue first than to threaten first.
The new Intellectual Property (Unjustified Threats) Act 2017, which comes into force on 1 October, attempts to encourage more pre-action communication by detailing what an actionable threat is, whilst providing for “permitted communications” or communications for “permitted purposes” which cannot amount to an actionable threat. It harmonises the position across patent, trade mark and design rights (including providing for unitary patents and European patents under the proposed Unified Patent Court jurisdiction) and allows pursuit of information on primary infringers from secondary parties where reasonable efforts have been made to find the primary infringer already.
To watch a video on the new unjustified threats regime click here.
Summary and Business Impact
The European Commission has published a “Position paper transmitted to EU27 on Intellectual property rights (including geographical indications)” (7 September 2017) which proposes that the (Brexit) Withdrawal Agreement should ensure that:
- The protection enjoyed in the United Kingdom on the basis of Union law by both UK and EU27 (the remaining EU states) holders of intellectual property rights having unitary character within the Union before the withdrawal date is not undermined by the withdrawal of the United Kingdom from the European Union. The paper suggests there should be automatic recognition of an IP right in the UK on the basis of the existing, unitary character IP right i.e. that, for example, any EU trade mark rights applying in the UK prior to Brexit should be automatically replaced by UK rights post-Brexit. Further, the fact that use may not be in the UK should not be able to form a basis for revocation of the rights. The implementation should be not result in any financial cost for the IPR holders and any administrative burden should be kept to a minimum. The paper also requires that the UK Government put in place a system to continue the protection of Geographical Indications (GIs) and protected designations of origin (PDOs) which are currently legislated for under EU law and for which there is no current domestic legislation in the UK. However there is no suggestion of a reciprocal recognition of UK-based PDOs or GIs post-Brexit.
- Procedure-related rights (e.g. right of priority) in relation to an application for an intellectual property right having unitary character within the Union still pending on the withdrawal date are not lost when applying for an equivalent intellectual property right in the United Kingdom ie. that where an application is in progress at the point of the UK’s withdrawal from the EU, the applicant should be entitled to keep the benefit of any priority date when applying after the withdrawal date for an equivalent IPR in the UK.
- Applications for supplementary protection certificates or for the extension of their duration in the United Kingdom on-going before the withdrawal date are completed in accordance with the conditions set out in Union law (and any certificate so granted or extended should provide for protection equivalent to that provided for by Union law.
- Databases protected in the EU27 and the UK before the withdrawal date continue to enjoy protection after that date. This involves waiving the requirements of Article 11(1) and (2) in the EU27 Member States in respect of UK nationals and UK companies and firms; and the UK should not exclude EU27 nationals and EU27 companies and firms from legal protection of databases in the UK on nationality or establishment grounds. No provision for any continuing mutual recognition of database rights is referred to however.
- Exhaustion before the withdrawal date within the Union of the rights conferred by intellectual property rights is not affected by the withdrawal of the United Kingdom from the European Union. The conditions for exhaustion of each IPR should be those defined by Union law.
These points highlight the key areas that have concerned IP stakeholders since the Brexit referendum and serve as a timely reminder to the UK Government that these issues need to be dealt with prior to Brexit, in one way or another.
Joel Smith, Head of IP at Herbert Smith Freehills, commented, “Whilst it is reassuring that the Commission recognises that there are important issues for continuity of IP protection to be addressed upon Brexit, this paper only begins to scratch the surface for the number of issues that need examining by UK Government”.