The Trade and Cooperation Agreement and its impact on IP, Pharma and Medical Devices

The final Brexit agreement, the Trade and Cooperation Agreement (the “TCA”) was agreed between the UK and the EU on 24 December 2020. Within this agreement are provisions that set out the standards expected to be recognised (mutually) between the EU and the UK in relation to intellectual property (including SPCs and trade secrets). There are some provisions concerning pharmaceutical regulation and product standards, but overall there is a lack of mutual recognition, with the consequence that, for both pharmaceuticals and medical devices, there are now effectively two separate regimes for the EU and the UK.

Intellectual Property

The provisions on IP match or exceed those for IP set out in the various treaties to which the UK and EU have acceded (such as WIPO, WTO and TRIPS agreements).  These IP standards are to be maintained as a minimum. The cited objectives and scope in relation to intellectual property (see Title V) indicate the aims behind these provisions which are to:

(a) facilitate the production, provision and commercialisation of innovative and creative products and services between [the UK and the EU] by reducing distortions and impediments to such trade, thereby contributing to a more sustainable and inclusive economy; and

(b) ensure an adequate and effective level of protection and enforcement of intellectual property rights.

The provisions are intended to “complement and further specify the rights and obligations of each [of the UK and the EU] under the TRIPS Agreement and other international treaties in the field of intellectual property to which they are parties” and do not “preclude either [the UK or the EU] from introducing more extensive protection and enforcement of intellectual property rights than required under [this section of the TCA] provided that such protection and enforcement does not contravene [those provisions]”. However, there are aspects of current UK and EU IP law, such as the dilution provisions in trade mark law, to which the agreement does not refer, instead referring to the Paris Convention provisions on the protection of well known marks. Whether this will be a point of future divergence remains to be seen.

Both the UK and the EU also have the ability to develop their own exhaustion regimes. The provisions on geographical indications (“GIs”) indicate that a mutual future scheme has not be agreed although a review clause on GIs has, which provides that the UK and EU may (if both parties agree it is in their interests) use reasonable endeavours to agree rules for the protection and domestic enforcement of their GIs.

The UK Government’s Summary document that accompanies the TCA (see here) states that the agreement “includes mechanisms for cooperation and exchange of information on IP issues of mutual interest” and “retains regulatory flexibility for each [of the UK and the EU], enabling the UK to develop an IP system in line with [its] domestic priorities“, thus enabling the UK to diverge where it so requires.

We have already commented on the changes to the UK IP regime in the firm’s guide to Brexit here (see the IP section).

The Regulation of Medical Devices and Medicinal Products

Medical devices: The TCA has a chapter (4) (under Trade – Title I) on eliminating unnecessary technical barriers to trade which deals with conformity of standards. However, this only provides for an approach under which each party can agree that its standards bodies (including those relating to medical devices) will conform with international standards and will work together to influence those and to “foster bilateral cooperation with the standardising bodies of the other Party“.

For medical devices, it had been hoped that there would be at least mutual recognition of conformity assessment under which each of the EU and the UK would recognise the other’s certification bodies. However, as things stand, although Great Britain will continue to accept CE marked medical devices until 30 June 2023 those devices certified by the UK and marked as UKCA (standing for UK Conformity Assessed, as discussed in more detail in our post here), will not mutually recognised by the EU.

Medicinal Products: For medicinal products there is a dedicated annex in the TCA, Annex TBT-2 – Medicinal Products (the “Medicinal Products Annex”), which applies to all medicinal products listed in its Annex C, namely:

  • marketed medicinal products for human or veterinary use, including marketed biological and immunological products for human and veterinary use,
  • advanced therapy medicinal products,
  • active pharmaceutical ingredients for human or veterinary use,
  • investigational medicinal products,

with this list being subject to amended by the UK-EU Partnership Council (the main governing body for the agreement and supplementing agreements).

The aim of the Medicinal Product Annex is to “facilitate availability of medicines, promote public health and protect high levels of consumer and environmental protection in respect of medicinal products”.  To help achieve this aim, the Annex provides for:

  • the mutual recognition of Good Manufacturing Practice (“GMP”) inspections and certificates, meaning that manufacturing facilities do not need to undergo separate UK and EU inspections;
  • the individual inspection, on notice, by the EU or UK of each other’s facilities); and
  • for the suspension of the mutual recognition arrangements.

Further, the TCA also states that the EU and the UK should work together to implement agreed international guidelines and that any changes to either the UK or the EU’s regulation regime should be on 60 days’ notice and be subject to discussion by a Working Group on Medicinal Products, which will be established to enable mutual consultation. This Working Group on Medicinal Products will be under supervision of the Trade Specialised Committee on Technical Barriers to Trade, and will monitor and review implementation and ensure the proper functioning of the Medicinal Products Annex. It is noteworthy that the Medicinal Products Annex is specifically excluded from the TCA’s disputes mechanism, however, through its role in facilitating discussions and functioning as an appropriate forum for issues relating to Medicinal Products, it is hoped that it will be a sufficient mechanism to deal with any concerns.

When considering the confidentiality of information supporting applications for marketing authorisations (“MAs”), regulatory protection of pharmaceutical products, and Supplementary Protection Certificates (“SPC”) it is noteworthy that this is not included in the Medicinal Products Annex, but is included in the IP section (Title V) of the TCA.

  • In relation to regulatory data protection generally, the TCA requires that both the UK and the EU ensure that commercially confidential information submitted to obtain an MA is protected against disclosure to third parties, unless there is an overriding public interest or steps are taken to ensure the data is protected from unfair commercial use.
  • For the regulatory protections of data and market exclusivity, the TCA provides that, subject to any international agreement to which both the EU and the UK are party, and without prejudice to any additional periods of protection which either party may wish to provide for in its domestic law, these regulatory protections will be “for a limited period of time to be determined by domestic law”. This allows each of the UK and the EU to determine the length of such regulatory exclusivities under their own regulatory regimes.
  • For SPCs, the TCA records the agreement of both the UK and the EU to provide for further patent protection to compensate for the impact of regulatory administrative procedures but, again, the length of time is not stipulated.

The effect of these provisions is that they provide some comfort that these valuable forms of protection for medicinal products will be maintained by both the UK and the EU.

For detailed commentary on the new regulatory position for Pharma in the UK, and the impact on IP rights generally, see our series of posts on the HSF Intellectual Property Notes blog here.

Other provisions relevant to the pharmaceutical and medical device industry

The TCA also has provisions relating to the UK’s continued participation in EU programmes and on UK / EU cooperation on “serious cross-border threat[s] to health that are relevant for the pharmaceutical industry.

  • Subject to the UK making financial contributions, Part 5 of the TCA includes agreement on the UK’s continued participation in EU programmes, including the EU’s research and innovation funding programme, Horizon Europe.
  • UK / EU cooperation on serious cross-border threat[s] to health is covered by the TCA including agreement between the UK and the EU on emergency relief in relation to importation requirements, tax and road transport exemptions, and agreement to cooperate in relation to international health security systems.

Future developments

Although tariff free and quota-free trade has been agreed, there is little mutual recognition of regulatory provisions. This may not be the end of negotiations, with automatic reviews every 5 years written into the TCA and termination possible on 12 months’ notice.  See the HSF Brexit blog for further information, and our initial comments here.

Key contacts and authors

Jonathan Turnbull

Jonathan Turnbull
Partner, London
+44 20 7466 2174

Rachel Montagnon

Rachel Montagnon
Professional Support Consultant, London
+44 20 7466 2217

George McCubbin

George McCubbin
Senior Associate, London
+44 20 7466 2764

Priyanka Madan

Priyanka Madan
Associate - London
+44 20 7466 2986

UKIPO launches ‘AI and IP Call for Views’

The UK Intellectual Property Office has published its call for views on artificial intelligence (‘AI’) and intellectual property (‘IP’). The IPO is interested in understanding the implications that AI might have for IP policy, and vice versa, in the near to medium future.

To respond, email AIcallforviews@ipo.gov.uk before 11:45 pm on 30 November 2020.

Overview

In this call for views, the IPO recognises that “AI and machine learning are enabling. They are transforming the global economy and already an integral part of our lives. They impact our workplace, our homes, our transportation, and our healthcare”, and wants to understand “the commercial, economic, legal and social implications of AI and how the IP framework can incentivise the development and adoption of AI technologies”.

The call for views asks a number of questions in relation to how the IP framework currently relates to AI and the future of AI and IP policy.

It contains five sections covering the below IP rights and themes:

  • Patents (including in relation to AI inventorship, patentability of AI inventions, and infringement of patents by AI systems);
  • Copyright and related rights (including in relation to use of copyright works by AI systems and copyright protection of AI-generated works);
  • Designs (including in relation to AI ownership and authorship, and infringement by AI systems);
  • Trade marks (including how current trade mark law would apply to AI technology and infringement by AI systems); and
  • Trade secrets (including the advantages and disadvantages of using trade secrets in the AI sector).

A full list of the questions asked across all of the IP rights above can be accessed here.

 

Priyanka Madan

Priyanka Madan
Associate - London
+44 20 7466 2986

Laura Adde

Laura Adde
Associate - London
+44 20 7466 7491

Tech Disputes webinar series (Session 4: The importance of trade secrets enforcement to industry)

Webinar: The importance of trade secrets enforcement to industry

Wednesday 17 June, 10am – 10:45am

In the digital economy, it is not enough for businesses to merely give a nod towards trade secrets. Nearly everything is expressed in data. This data has substantial value and businesses face disruption and potentially significant impact, if the data is vulnerable to loss, employee theft or cyber attack. It is therefore crucial for a business to implement practical steps to protect and monitor its valuable information, as well as ensuring that such information can be recognised as a ‘trade secret’ under law, and therefore garner the law’s protection. There are numerous well-documented instances of misappropriation of trade secrets in key industries, from Formula One to emerging and developing technologies, such as around connected autonomous vehicles.

In this webinar, we will focus on strategies for identifying and protecting trade secrets, as well as the tools and technologies that can be deployed to detect and contain unauthorised use, or theft, of trade secrets. Key for a business which has suffered unauthorised trade secret disclosure is the taking of swift and effective enforcement action to minimise its wider disclosure and mitigate the disclosure consequences. We will cover civil enforcement options available under the law as well as the proactive practical steps which the aggrieved business should take to safeguard trade secrets.

This webinar will focus on the position under UK/ EU law.

Register here to access a recording of this webinar on-demand. 

Speakers

Joel Smith

Joel Smith
Partner, Head of Intellectual Property, London
+44 20 7466 2331

Jessica Welborn

Jessica Welborn
Senior Associate
+44 20 7466 2243

Rachel Montagnon

Rachel Montagnon
Professional Support Consultant, IP, London
+44 20 7466 2217

New German Trade Secrets Act Enacted

Summary

With the release of Federal Law Gazette dated 25 April 2019, the new Trade Secrets Protection Act (Gesetz zum Schutz von Geschäftsgeheimnissen – GeschGehG) (Act) came into force in Germany. The Act implements the EU Trade Secrets Directive (EU 2016/943) (Directive) with a delay of nearly one year after the expiry of the time-limit for transposition the Directive into national law. The reasons for this delay were, inter alia, significant political controversy between the German political parties upon the scope of protection with regard to whistleblowers, employees and journalists.

The necessity for the transposition of this European law into domestic law was a good opportunity for the German legislator to comprehensively reorganise the German system of trade secret protection. Previously, the protection of trade and business secrets had been provided for in several areas of law: tort, criminal and unfair competition law, without a comprehensive and coherent approach. Now, following implementation of the Directive, there is only one code to protect trade secrets, containing civil, as well as criminal law provisions.

Key changes

The most significant material amendment in comparison to the former provisions is that from now on trade secrets will only be protected if appropriate measures of protection have been taken. Previously, it was enough for information to qualify as a trade secret if a fact was not generally known and the owner of this secret had a legitimate economic interest to keep the fact secret – notwithstanding whether he took steps to keep it secret or not. Whether measures are “appropriate” is to be assessed with regard to the significance of the respective trade secret.  Companies, in particular, whose businesses are based mainly on information (IT, technology companies etc.,) need to take note of this requirement. In a dispute, the owner of a trade secret now has to assert and, if applicable to prove, whether they applied appropriate measures to keep the facts secret.

There is also an express concept of permitted activities for obtaining or using a trade secret. Under the previous German law, it was unclear whether “reverse engineering” would be legal, through the dismantling or testing of products or objects which are publicly available or in the possession of the examiner. Now, “reverse engineering” is expressly legalized. The intention of the law is to promote technical progress, limited only by other intellectual property rights (patents or designs, respectively). If the owner of a trade secret wants to exclude “reverse engineering”, he may impose respective prohibitions upon the purchasers by contract.

As a result of political discussions, the Act contains exemptions for the protection of whistleblowers, journalists and employees. There are some exceptions: legal measures provided by Act do not apply, for example, if the acquisition or disclosure of a trade secret aims to detect or expose illegal activities or misconduct or it is justified as a matter of public interest.

As to means of redress, the Act provides remedies equivalent to those which are applicable to infringements of  intellectual property rights: injunctions prohibiting use or disclosure of the trade secrets, the recall of infringing goods from the market and destruction of such goods, provision of information, damages and other pecuniary compensation.

A significant improvement are provisions about the confidentiality of trade secrets with civil proceedings. In particular, the court may classify proceedings as confidential upon application of one party and may admit only a limited number of persons to attend hearings.

Altogether, the new Act seems to be provide an improvement for trade secret protection in Germany.

For more on the implementation of the Trade Secrets Directive across Europe see our earlier posts in relation to the UK here (and here a video on the IP and employment impact of the Directive in the UK), Italy here and France here.

Author 

Wolfgang Bomba

Wolfgang Bomba
Senior associate, Disputes, Germany
+49 30221510451

Data Assets – Protecting and Driving Value in a Digital Age

Faced with the exponential rise of data as an asset class in its own right, organisations are now taking a fresh look at the data that are available or accessible to them and the ways in which the value of those data can be safeguarded, unlocked and maximised. Data have become a strategic and valuable asset for many organisations but protecting and exploiting that asset is not always simple.

Our feature article, published in May’s edition of PLC Magazine and linked in this post, considers data as an asset, how intellectual property rights can be employed to protect data, how data can be used effectively and how to minimise associated legal risks.

The article explores key legal considerations for organisations looking to develop or refine a data commercialisation strategy, including in respect of:

  • the concept of so-called data “ownership”;
  • intellectual property rights;
  • contractual rights;
  • information governance;
  • competition law; and
  • corporate transactions.

For the full article please click below:

 

This article was first published in PLC Magazine, May 2019

Edward Du Boulay

Edward Du Boulay
Senior Associate, Digital TMT & Data, London
+44 20 7466 2384

Miriam Everett

Miriam Everett
Partner, Head of Data Protection & Privacy, London
+44 20 7466 2378

Kyriakos Fountoukakos

Kyriakos Fountoukakos
Partner, Competition and Trade, Brussels
+32 2 518 1840

Andrew Moir

Andrew Moir
Partner, Head of Cybersecurity, London
+44 20 7466 2773

Rachel Montagnon

Rachel Montagnon
Professional Support Consultant, Intellectual Property, London
+44 20 7466 2217

Joel Smith

Joel Smith
Partner, Head of Intellectual Property, London
+44 20 7466 2331

Manish Soni

Manish Soni
Senior Associate, London
+44 20 7466 2016

France adopts a confidentiality regime for the trade secrets relied upon in (patent) litigation

As part of the French Law on the Protection of Trade Secrets dated 31 July 2018, French lawmakers have finally adopted a long-awaited array of confidentiality rules covering the trade secrets that are being relied upon in cases that come before civil and commercial courts. Such provision was a requirement of the EU Trade Secrets Directive of 8 June 2016. These confidentiality rules have already been applied in patent litigation in a decision of the Paris Court of Appeal of 9 October 2018.

Until now, parties to patent litigation in France might have been reluctant and even precluded from providing confidential data, such as (i) their own financial data in the interests of calculating damages, or (ii) confidential contractual documents, as confidentiality could not be adequately preserved once these were relied upon as evidence in open court. This vulnerability has historically had a deterrent effect on efficient patent litigation in France compared to what was possible in other jurisdictions.

The following provisions went into force on 1 August 2018, marking a great improvement and quickly proving their worth in French patent litigation.

Article L. 153-1 of the French Commercial Code now provides that “Where, in the course of civil or commercial proceedings aimed at obtaining a pre-trial order of investigative measures before any proceedings on the merits, or in the course of proceedings on the merits, and the exhibit has been deemed to infringe or alleged by a party to the proceedings or a third party to be capable of infringing a trade secret, the court may take any of the following steps sua sponte or at the request of a participating or third party if the trade secret cannot be otherwise protected, without prejudice to the rights of defence: 1° Have the court alone review the exhibit, and if deemed necessary, order an expert opinion and request an opinion from each of the parties via a person authorized to assist or represent the party so as to decide whether to apply the protective measures set out in this Article; 2° Decide to limit the disclosure or production of the exhibit to certain parts thereof, order disclosure or production of a summary of the exhibit only, or restrict all parties’ access to a single individual person and a person authorized to assist or represent that party; 3° Decide that hearings will be held and the decision issued in chambers; 4° Adapt the grounds of the decision and the mode of publication thereof to the need to protect the trade secret.

In addition, Article L. 153-2 of the French Commercial Code provides that “Any person with access to an exhibit (or content thereof) that the court has deemed to be covered or likely to be covered by trade secret is bound by a duty of confidentiality and prohibited from any use or disclosure of the information in the exhibit. For a legal entity, this obligation […] applies to its representatives by law or pursuant to the articles of association and to any persons acting for the entity in court. Persons with access to the exhibit or its content are not bound by this duty either in their interactions with one another or with the aforementioned representatives of the entity that is party to the proceedings. Persons authorized to assist or represent the parties are not bound by this duty of confidentiality vis-à-vis said parties, except as provided in Article L. 153-1(1°). The duty of confidentiality does not expire at the end of the proceedings. It does expire, however, if a court issues a non-appealable decision that trade secrecy does not apply or where the information in question has since ceased to qualify as a trade secret or has become easily available.

The ability to rely on confidential data could be a game changer in future patent litigation in France, and the Paris Court of Appeal has already enforced these provisions to allow confidential license agreements to be disclosed while ensuring their confidentiality. The decision, dated 9 October 2018, was issued in a SEP/FRAND case, but its solution could apply across an extremely broad range of patent litigation cases in France. The operative part of the decision reads as follows:

Rule that the communication of these non-redacted documents, along with their possible schedules, will first be made between attorney’s only, that the attorneys will then revert to us – by 7 December 2018 at the latest – with their written observations on the excerpts or elements of those documents likely, on their opinion, to infringe or not a trade secret, such that we can decide, if relevant, to order one or several measures provided in paragraphs 2°, 3°, or 4° of Article L. 153-1 of the French Commercial Code.

Our London and Milan offices have also commented on the implementation of the Trade Secrets Directive in their respective jurisdictions on the Herbert Smith Freehills Intellectual Property Notes blog: see here for the UK and here for Italy.

Contact

Frédéric Chevallier

Frédéric Chevallier
Partner
+33153571360

TRADE SECRETS – SHORT VIDEO ON THE IMPACT OF THE NEW UK REGULATIONS IN IP AND EMPLOYMENT CONTEXTS

Here’s a short video made for Practical Law, in which Herbert Smith Freehills IP and Employment Professional Support Consultants, Rachel Montagnon and Anna Henderson, discuss the impact of the UK’s recent Trade Secrets (Enforcement etc) Regulations 2018 and practical approaches to protecting confidential information and trade secrets.

Key issues discussed are:

  • The new, common definition of a trade secret
  • What constitutes lawful and unlawful acquisition, use and disclosure of a trade secret
  • Practical steps businesses can take to protect confidential information
  • Considerations in relation to whistleblowing
  • Guidance around reverse engineering
  • Bringing a claim under the regulations
  • Remedies and provision for damages.
These new UK trade secrets regulations have implemented the Trade Secrets Directive ((EU) 2016/943) and came into force on 9 June 2018.  Also on our IP Notes blog, see our Milan office’s post on the Italian implementation of this Directive and our previous posting on implementation of the Directive in the UK.

TRADE SECRETS: NEW EU RULES IN FORCE IN ITALY

Italian Legislative Decree 63 – 11 May 2018, implementing Directive (EU) 2016/943 on trade secrets, entered into force on 22 June 2018.

The Italian legal system was already at the forefront of trade secret protection, affording twenty years’ protection to both commercial and manufacturing and industrial-technical trade secrets, in full compliance with the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). This meant that the Italian legislator did not need to make major changes to the existing legislative framework. There are however some interesting changes to report.

New Definition of “Trade Secrets” 

The Italian Industrial Property Code (IPC) already provided for the protection of business information and technical-industrial experience as long as:

a) they were secret, meaning they were not generally known or not easily accessible to experts or sector operators;
b) they had commercial value because they were secret;
c) they had been subject to reasonable steps to keep them secret.

Although the Directive has not impacted scope of protection, such know-how is however now captured by the term “trade secrets”.

Continue reading

Trade Secrets – added protection in force

The Trade Secrets (Enforcement, etc.) Regulations 2018 (the “Regulations”) came into force on 9 June 2018 and transpose Directive (EU) 2016/943 (the “Directive”) into UK law.

Summary:

  • The aim of the Directive is to create a level playing field by harmonising this area of law across the EU.
  • The UK already has well-developed legal protection for trade secrets governed by common law breach of confidence and by contract law.
  • A trade secret holder may now apply for remedies under breach of confidence in addition to or as an alternative to remedies under the Regulations.
  • Changes mainly concern limitation periods, procedural issues for the courts when hearing cases in relation to trade secrets and certain remedies.

Business Impact:

Businesses should continue to take steps to ensure that trade secrets are kept confidential and with limited access. This should be reflected in company policies, procedures and contractual provisions.

Continue reading

CONSULTATION ON THE DRAFT TRADE SECRETS (ENFORCEMENT, ETC) REGULATIONS 2018

The Trade Secrets (Enforcement, etc.) Regulations 2018 (the “Regulations”) are intended to be in force by 9 June 2018 to transpose Directive (EU) 2016/943 (the “Directive”) into UK law. The UK IPO is in the process of consulting on the proposed Regulations.

Summary:

  • The UK already has well-developed legal protection for trade secrets (either in common law, statute or by means of court rules), therefore the Directive does not require substantial changes to be made to UK law.
  • Changes mainly concern limitation periods, procedural issues for the courts when hearing cases on breach of confidence in relation to trade secrets and certain remedies.
  • Although the EU has largely adopted UK law concepts the changes will be more radical in some other EU jurisdictions. The aim of the Directive is to create a level playing field for enforcement by harmonising this area of law.
  • Certain provisions of the language proposed for the Regulations differ from that used in the Directive.  In addition, it is proposed that some parts of the Directive will not be transposed and it is not clear why this is the case.  If this approach is adopted, it may lead to a lack of clarity in the UK law on trade secrets.

Business Impact:

  • Greater protection for a business trade secrets and a common approach to enforcement is to be welcomed across the EU.  Trade secrets are increasingly important in protecting valuable information and technology, especially where the other forms of IP protection like patents may not be available or appropriate.

Read more on the proposed regulations on trade secrets.

 

Authors

Joel Smith

Joel Smith
Head of IP - UK
+44 20 7466 2331

Clare Blendis

Clare Blendis
Senior Associate, London
+44 20 7466 2165