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.
IP rights which are designated as applying across the EU (EU trade marks, Community plant variety rights, Community registered designs and Community unregistered designs) and those, qualification for which involves activity within the EU (such as database rights), are all at risk of termination in relation to the territory of the UK once the definition ‘EU’ no longer includes the UK. However, the Commission and the UK Government have agreed at negotiator level (as published on 19 March 2018 and subsequently, 19 June 2018) certain sections in the withdrawal agreement including provision of replacement rights for those registered rights thus affected and for the UK Government to provide replacement rights for UK registered rights.
The UK Government’s White Paper detailing its proposal for the future relationship between the UK and the EU (published on 12 July 2018) includes a limited number of proposals relating to intellectual property as follows:
• The UK intends to explore staying in the Unified Patent Court (UPC) and Unitary Patent system post-Brexit. The UK will work with the member states that have signed up to the UPC Agreement to ensure that the UPC Agreement can continue on a firm legal basis;
• Arrangements on future co-operation on intellectual property are recognised as important to provide confidence and security to rights holders operating in and between the UK and the EU;
• The UK will establish its own Geographical Indications (GIs) scheme to provide continuous protection for UK GIs in the UK and protection for new GIs applied for by UK and non-UK applicants
In our detailed briefing, we review the proposals for the treatment and protection of intellectual property rights in the UK at Brexit: see Intellectual Property and Brexit (part of the HSF Brexit Legal Guide 2018).
See also the Herbert Smith Freehills Brexit Hub and Brexit Blog.
The UK Government’s White Paper detailing its proposal for the future relationship between the UK and the EU (published on 12 July 2018) includes a limited number of proposals relating to intellectual property and cyber security as follows:
- The UK intends to explore staying in the Unified Patent Court (UPC) and Unitary Patent system post-Brexit. The UK will work with the member states that have signed up to the UPC Agreement to ensure that the UPC Agreement can continue on a firm legal basis;
- Arrangements on future co-operation on intellectual property are recognised as important to provide confidence and security to rights holders operating in and between the UK and the EU;
- The UK and EU will need to continue to co-operate on cyber security to counter cyber threats;
- The UK will establish its own Geographical Indications (GIs) scheme to provide continuous protection for UK GIs in the UK and protection for new GIs applied for by UK and non-UK applicants
UPC and Unitary Patent
Opinions vary on the likelihood of whether the UK could continue as part of the UPC and Unitary patent system post-Brexit. The Foreword to the White Paper by the Prime Minister states that the proposals in the White Paper would end the jurisdiction of the European Court of Justice in the UK. It is not clear whether the UK would nevertheless accept the role of the European Court of Justice in respect of references from the UPC on matters of European law.
Future Co-operation on intellectual property
The draft withdrawal agreement of 19 March 2018 (as supplemented by the joint statement on 19 June 2018) sets out the text (highlighted in green in the draft) agreed between the Commission and UK at negotiator level, in relation to the replacement of EU-wide rights with equivalent UK rights, which may indicate that there will be substantive future co-operation.
It is proposed that here will be close collaboration between the UK and the Network and Information Security (NIS) Cooperation Group, Computer Security Incident Response Team (CSIRT) Network (created under the NIS directive) and the European Union Agency for Network and Information Security (ENISA). While the UK’s desire to remain involved in the EU cyber security apparatus is welcome, no details of the legal mechanisms by which this will be achieved are provided at this stage.
The provisions in the draft withdrawal agreement relating to GIs have not yet been agreed at negotiator level. However, the White Paper states that the UK wants equivalence arrangements on a broad range of food policy rules, including GIs, noting that GIs provide legal protection against imitation and misrepresentations about quality or geographical origin for agri-food products that have a strong traditional or cultural connection to a particular geographical area. The UK will establish its own GI scheme consistent with (and going beyond) the provisions of the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPS). The new scheme is to provide a clear and simple set of rules on GIs and continuous protection in the UK for UK GIs notwithstanding exit from the EU. The scheme will be open to new applications from both UK and non-UK applicants.
For further analysis of the impact of Brexit on IP rights and how to moderate this, see the IP section of the HSF Brexit Legal Guide in the Brexit hub of our website (https://www.herbertsmithfreehills.com/latest-thinking/hubs/brexit).
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.
The similarity between a two stripe design for shoes and adidas’ earlier trade mark for its renowned three stripe shoe, combined with adidas’ significant reputation in that mark, means that adidas can oppose the two stripe application for use on shoes, as there is a substantial risk that the use of the two stripe mark being applied for is taking unfair advantage of the reputation of adidas’ mark.
This decision by the EU General Court on 1 March 2018 (cases T-85/16 and T-629/16) is a reminder that the courts will take a strict view on trade mark applications that sail too close to famous marks. In this case, the General Court was particularly scathing of a 2007 advertising campaign used once by a licensee of Shoe Branding Europe, which featured the slogan “Two stripes are enough”. The General Court considered this as evidence of the risk of unfair advantage being taken of the repute of the adidas mark by Shoe Branding Europe. Care must be taken by brand owners not to engage in, and to ensure that any licensees do not engage in, marketing campaigns that could be misconstrued as taking advantage of, or seeking to trade on, the repute of a similar earlier mark.
The decision also suggests that any use of the two stripes by Shoe Branding will likely be infringing, given the findings of the General Court in relation to registration and the similarity of the tests for trade mark infringement. Last year, adidas sued Puma in relation to the latter’s use of four stripes on sports footwear.
Missed any of the big trade mark developments from 2017? Key developments include the Supreme Court finding that there is potential criminal liability for dealing in parallel imports under section 92(1) the Trade Marks Act 1994 and the Court of Appeal making it ever more difficult for brand owners to obtain shape mark protection in light of its judgments on acquired distinctiveness. We also review the impact of two particularly important areas of new legislation: the EUTM reforms and a new unjustified threats regime which both came into force on 1 October 2017.
Read our Trade mark update for the start of 2018, on the key trade mark cases and legislation from 2017 here.
The exact mechanics of how Brexit will materialise and what it would mean for intellectual property rights in the UK is still unclear. However, time is now running short and the main representative bodies for IP practitioners have become concerned that IP rights (which are some of the assets most likely to be adversely impacted by Brexit – indeed in some cases at risk of being lost without specific provision being made by the UK Government prior to Brexit) have not been receiving the attention they require.
On 22 December, a note was sent to the UK Government by the Law Society which had been contributed to and signed by representatives of the IP Committee of the Law Society of England and Wales, and of the IP Bar Association, the Chartered Institute of Patent Attorneys (CIPA), the Chartered Institute of Trade Mark Attorneys (ITMA) and the IP Federation (whose website also carries a copy of the note).
The note makes the case for the UK as a key IP forum and identifies “a short list of the biggest areas where Government action is necessary to ensure continuity and certainty of IP law and to prevent disruption both to undertakings which use IP services and IP service providers“.
The following are some of the key recommendations made by the note:
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.