Impact of Brexit on US IP owners

The outcome of the Brexit referendum has caused substantial uncertainty among US businesses and IP owners. While the short-term issues should be minimal, as the Brexit vote will not take immediate effect, there is concern for the longer term as owners and counsel consider filing and enforcement strategies in both the United Kingdom and the European Union. More particularly, over the coming months US IP owners and counsel alike will be examining closely the implications for current UK brand extensions and future expansions, as well as for existing EU registrations that may be affected. 

Brexit vote
On June 23 2016 voters in a UK referendum elected to leave the European Union. A new prime minister, Theresa May, is already in place following David Cameron's resignation on losing the vote, but more consequences of the vote will be manifest during the lengthy process of exiting the European Union. May has indicated that the new government will not invoke Article 50 of the Lisbon Treaty in order to exit the European Union this year, as negotiations over the terms of the exit continue.

Clearly the United Kingdom's departure from the European Union will alter the UK and EU IP landscapes, but exactly what this will mean is uncertain. What is certain at this stage is that despite the referendum decision, the United Kingdom will remain a member of the European Union for several years while negotiations for the terms of its withdrawal take place and are completed. 

With regard to patents, the European Patent Office (EPO) is unaffected. The European Patent Convention is not an EU agreement and the EPO is not an EU body. A number of countries outside the European Union – for example, Norway, Switzerland and Turkey – are EPO contracting states. Even after it leaves the European Union, the United Kingdom will remain an EPO contracting state. 

However, UK participation in the EU Unified Patent Court (UPC) and the unitary patent is now in doubt. The UPC was due to come into effect in 2017, allowing, on grant of a European patent by the EPO, designation of a unitary patent covering up to 26 UPC countries from among the EU member states that join the UPC system, thus affording tremendous efficiency and cost savings to patent owners. The UPC would have jurisdiction over both unitary patents and properly validated European patents. As a result of the United Kingdom's decision to leave the European Union, the entry into force of the arrangements for the unitary patent and the UPC will undoubtedly be delayed.

Open questions are whether the United Kingdom will ratify the unitary patent and UPC system before leaving the European Union in order to allow the system to come into operation, or whether it will try to negotiate staying in the system as part of its exit from the European Union. For now, many US applicants considering filing a patent application for Europe are likely to stay with the tried-and-true EPO process with validation in the United Kingdom.

Trademarks and designs
With regard to trademarks, despite the decision in the referendum, the United Kingdom will remain an EU member state for several years while negotiations for the terms of its withdrawal take place and are completed. During this period, it will continue to be possible to obtain EU registered trademarks and registered designs through the EU Intellectual Property Office (EUIPO, formerly the Office for Harmonisation in the Internal Market), and these will continue to cover the United Kingdom. Stakeholders have asked the UK government to make arrangements for EU trademarks, design registrations and other Community-wide rights to continue to have effect in the United Kingdom after the date of withdrawal from the European Union. 

However, there is uncertainly as to what the newly process for re-designating EU trademark registrations and Community designs to UK national marks and designs will be. For example, it is unknown whether this process will be automatic or will require action by the registrant. While filing trademark applications with the EUIPO still is the main route for US businesses, many are considering filing a parallel trademark application in the United Kingdom as a prophylactic measure.

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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