What is Brexit?
“Brexit” (which stands for British Exit) refers to the possibility that the UK may soon withdraw from (and thereby cease to be a member of) the European Union (EU).
There will be an “in or out” referendum held in the UK on 23 June 2016. The actual question that UK voters will be asked to vote on is: “Should the UK remain a member of the EU or leave the EU?”
So, basically, the option open to British voters is to either “Bremain” (i.e. stay in the EU) or “Brexit” (i.e. leave the EU).
Why is this happening?
A lot of British people resent Britain’s EU membership, and the perceived “raw deal” they get out of it. Of course, that’s only one side of the debate. There is also strong support within Britain for remaining a member of the EU.
Nevertheless, some of the reasons why those in the “anti-EU” camp feel they get a raw deal from EU membership include:
- Immigration: Under EU law, the UK can’t prevent people from other EU countries from coming to live and work in the UK. The result has been a significant net increase in immigration into Britain, particularly from eastern and southern Europe.
- Jobs and employment: The significant increase in immigration into Britain has (or at least it is perceived to have) resulted in a significant take-up by EU immigrants of jobs that might otherwise have been performed by British people.
- Legislative freedom: As a member of the EU, Britain has necessarily relinquished considerable power and autonomy to the EU, making Britain less able to govern its own affairs independent of the EU.
- Cost of EU membership: Leaving the EU would give Britain an immediate monetary saving because they would no longer be required to contribute (billions of pounds per year) to the EU budget.
Political background
Okay, but why is all this happening now?
Before the last British government election (in early 2016), David Cameron (the British Prime Minister) made an election pledge to hold an EU membership referendum if his government was re-elected.
Why?
This seems to have been a largely political move. David Cameron’s governing party, the Conservatives (Tories), were apparently losing at least some of their conservative supporters to the (and vocally anti-EU) UK Independence Party (Ukip). The Tories basically needed to hold on to those voters to win the election.
Anyway, the Tories did win the election, so now the promised referendum has to go ahead.
The strange thing is that David Cameron, who is the leader of the Conservative party and who was re-elected as British Prime Minister, is himself a vocal supporter of remaining in the EU. Consequently, it seems that if he hadn’t needed to promise a referendum in order to hold onto conservative voter support, he probably would have preferred not to have a referendum at all.
What happens if the UK votes to leave?
The reality is that, even if the British public votes to leave the EU in June 2016, it is unlikely that anything much will change, at least not immediately. Actually, it is unlikely that much will change until the UK government actually triggers withdrawal from the EU.
Under Art. 50 of the Treaty on European Union, the UK must provide notice of its intention to withdraw. This will trigger the commencement of a two year period during which the UK and the EU can negotiate the terms of Britain’s withdrawal.
If no agreement on the arrangements for the UK’s withdrawal is reached, Brexit will still occur once the two year period is over, even if there are no terms in place.
Having said this, the two year period could (possibly) be extended if negotiations are incomplete, but only with unanimous consent from all other EU countries. Securing such consent would likely come at significant cost or detriment to the UK, as it would likely involve the UK making concessions to any other EU country threatening to withhold consent.
What would be the implications of a Brexit for intellectual property?
IP law in the UK is heavily intertwined with EU law. For example, there are:
- EU wide Design rights
- EU wide Trade Mark rights,
- Directives harmonizing EU and UK national laws on a range of other areas.
Some EU Directives are given affect to in the UK by statute, but others are implemented by subordinate legislation (i.e. Regulations, etc) under the European Communities Act (ECA).
There will be no need to change existing statutes (i.e. Acts passed by the British Parliament) which harmonize EU and UK national laws; however subordinate legislation (Regulations) that gives affect to EU Directives under UK national law will need to be preserved (i.e. re-enacted or reintroduced) if Brexit occurs and the ECA is repealed.
The new Unitary Patent and Unified Patent Court (UPC) are supposed to commence in 2017. If there is a Brexit, the fate of the UPC will be affected because the planned UPC commencement may coincide with the period when Brexit is being negotiated or implemented. (See more on this below)
If there is a Brexit, there will also be short term effects. For example, Community (EU) IP rights will need to be replaced by national rights. (This is also discussed further below.)
In the longer term, IP rights owners will need to adapt to the situation where IP rights in the UK are “stand-alone” national rights only, and where UK law is likely to diverge over time from EU law.
Brexit: implications for trade marks and designs
If a Brexit occurs, Community (EU) Trade Marks and Community (EU) Designs will all cease to have effect in the UK.
This will mean that, in future, if an applicant is considering seeking any of these kinds of protection in Europe, they will need to consider applying for protection in the UK separately from the rest of the EU.
In relation existing rights (e.g. EU trade mark registrations, EU designs registrations, etc, that are already in existence) the UK will need to create substitute rights (to replace these current EU rights that will cease to have effect in the UK). The same will also apply to EU designations of origin, geographical indications and Plant Varieties.
For trade marks, Brexit will also affect the geographical scope of trade mark use. Owners of Community (EU) Trade Marks who rely wholly or substantially on use in the UK to establish genuine use in the EU (e.g. in the event of a revocation claim), may find their Community registrations more vulnerable to revocation for non-use after a Brexit. Also, when (or if) the UK portion of a Community (EU) trade mark registration, which is used only outside the UK, is converted to (or replaced in the UK by) a UK national registration, the national registration will also be vulnerable.
Brexit: implications for (existing) European patents
The European Patent Convention (EPC), which sets up the European Patent Office (EPO) and the current European patent system, is not an EU instrument.
Therefore the EPC and the current European patent system will not be affected by a Brexit. European patents will continue to be granted by the European Patent Office and they can continue to take effect in the UK.
Brexit: implications for Unitary Patents and the UPC
It is now very unlikely the UK will ratify the Unified Patent Court (UPC) Agreement before the Brexit referendum on 23 June 2016.
Ratification by the UK is a requirement for the UPC Agreement and the Unitary Patent Regulation to come into effect. Therefore, failure by the UK to ratify will prevent the implementation of the UPC entirely, at least until the UPC Agreement can be renegotiated to remove the requirement for UK ratification.
Also, the location (in London) of one of the UPC’s three main division branches will need to be renegotiated. Other EU countries are unlikely to be happy to let London continuing to host this branch of the UPC if the UK is not part of the Unitary Patent system (or even an EU member).
Overall, the outcome of the Brexit referendum will be followed closely by those with an interest in the IP field, as well as by anyone with interests in the UK or Europe generally.